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Government-Sponsored Health Insurance in India
exclude diagnostics and surgical consumables. Follow-up, postsurgical care, including medicines, is also not covered. Finally, package rates have not been revised since the founding of the scheme in 2003 and are currently reported to be between 40 percent and 50 percent of market prices, particularly in Tier 1 cities. It can be hypothesized that hospitals are probably increasing their revenues by charging for tests and consumables. They have an incentive to oversupply these uncovered services, which can result in higher profits. The fact that additional spending by lower-income households is not significant suggests that this group may not access uncovered services, may seek only surgical procedures that do not require significant copayments, or not demand postsurgical care. Fan, Karan, and Mahal (2011) examined the impact of Rajiv Aarogyasri on out-of-pocket health spending during a 12-month period subsequent to the rollout of Phase 1 of the program, launched in April 2007.66 The authors found that Phase 1 households significantly reduced inpatient spending (in absolute terms and as a share of household consumption and catastrophic spending).67 Households participating in Phase 1 also significantly reduced the probability of having any out-of-pocket health spending. The results demonstrate that Aarogyasri provided financial protection for inpatient care, which is the main focus of the scheme. The reduction in total spending suggests that beneficiaries, who previously may have substituted outpatient care for inpatient care, were probably not accessing the latter (at that time) due to its high cost. Alternatively, beneficiaries (in collaboration with providers) may be substituting inpatient care, which is covered, for outpatient care, which is not. Fan, Karan, and Mahal also reported that the above-described effects of Aarogyasri on inpatient expenditure were not as robust for households from scheduled castes and scheduled tribes (SC/ST). In contrast, the effects for non-SC/ST households were significant. This suggests that the scheme may not be as effective in reaching SC/STs, one of the more impoverished and marginalized segments of Indian society. This finding is consistent with the results reported by Rao and Kadam (2009) on [lower] levels of coverage of SC/STs. Except for the SHI (CGHS and ESIS) schemes, limitations remain for most GSHISs in terms of geographical access, coverage gaps, after-care spending, and charges resulting from balance billing by providers that can lead to significant, and sometimes, unexpected out-of-pocket (OOP) spending. Costs for room and board of an accompanying family member and any transportation costs beyond those covered under the scheme are