When the need to get medical treatment arises for poor families they often ignore it because of lack of resources, fearing wage loss due to which they wait till the last moment, when it is too late. Ignoring the treatment may lead to unnecessary suffering and death while selling property or taking debts may end a family’s hope of ever escaping poverty. These tragic outcomes can be avoided through a health insurance which shares the risk of a major health shock across many households by pooling them together. A well designed and implemented health insurance may both increase access to healthcare and may even improve its quality over time. Further, they have to take on huge debts. In order to save them from this vicious debt cycle, Rashtriya Swasthya Bima Yojna (RSBY) has been launched in 2008 by Ministry of Labor welfare, Government of India to provide health insurance coverage for Below Poverty Line (BPL) families, MGNREGA workers (Mahatma Gandhi National Rural Guarantee Act) B&OCW (Building and other construction worker), Beedi Workers, Handloom Weavers, Railway Porter (western region) with the objective to provide protection to these households from financial liabilities arising out of health shocks that involve hospitalization. Beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000/- per year and a top up of Rs. 30000/- per senior citizen per year for most of the diseases that require hospitalization. Government has even fixed the package rates for the hospitals for a large number of medical interventions. Pre-existing conditions are covered from day one and there is no age limit for the family members. Coverage extends to five members of the family which includes the head of household, spouse and up to three dependents and newborn during the course of the policy is covered as a sixth member of the family. Beneficiaries need to pay Rs. 30/- as registration fee while Central and State Government pays the premium to the insurer selected by the State Government on the basis of a competitive bidding . In Gujarat, RSBY scheme is running since 2008 by the ministry of Labour welfare. The scheme was implemented in a phased manner. During the 1st phase (in the policy year 2008-09) 5 districts namely; Bharuch, Dahod, Jamnagar, Kutch and Patan were covered. After its successful implementation, in the 2nd phase (in the policy year 2009-10) the scheme was further extended to another 5 districts namely; Narmada, Tapi, Dang, Sabarkantha and Banaskantha (prominently tribal districts).In the policy year 2011-12 RSBY scheme was extended to all districts of Gujarat state . All government Medical colleges, District hospitals, Sub district hospitals ,CHC and PHC has been empanelled under the scheme which provides a choice to beneficiary while choosing a hospital for his/her treatment. On 1st April 2015, the scheme has been shifted from Ministry of Labour and employment to Ministry of Health and family welfare, New Delhi.