In 2007, Andhra Pradesh launched a pioneering new state-wide fully state funded health insurance scheme, the Rajiv Aarogyasri Community Health Insurance Scheme (Aarogyasri) to reduce out of pocket health expenditure and improve access of poor families to treatment for serious and life threatening illnesses. We compared changes in health related expenditures and behaviours in Andhra Pradesh and neighboring Maharashtra before and after the rollout of the Aarogyasri program in Andhra Pradesh and the Rashtriya Swasthya Bima Yojana (RSBY) program in Maharashtra to uncover the differential impacts of the programs and the net effect of Aarogyasri if any, over and above RSBY.