The web version of this article corrects a few errors that appeared in the print edition.
The experiment in restructuring the healthcare sector through the Aarogyasri community health insurance scheme in Andhra Pradesh has received wide attention across the country, prompting several states governments to replicate this "innovative" model, especially because it supposedly generates rich electoral dividends . However, after a critical scrutiny of this neo-liberal model of healthcare delivery, this paper concludes that the scheme is only the construction of a new system that supplants the severely underfunded state healthcare system. It is also a classic example of promoting the interests of the corporate health industry through tertiary hospitals in the public and private sectors.