India’s health care is predominantly financed by households through out-of-pocket payments at the point of care. Recognising this, successive governments have introduced various measures including health insurance schemes to protect the poor from high hospitalisation costs. One such scheme introduced in 2008, was the Rashtriya Swasthya Bima Yojana (RSBY). Meant for the poorest of the poor, the government subsidised the premiums so that patients from this population are able to get free hospitalisation care at select hospitals in their neighbourhood. Despite a 100% subsidy of premiums and the promise of free health care even in private hospitals, in 2011-2012 the enrolment rate in RSBY was 51.4%. The aim of our study was to identify the reasons for the poor enrolment.