Ayushman Bharat PM-JAY: Universal Health Coverage in India

4.1 Design and Architecture

PM-JAY is a government-funded insurance (or assurance) scheme — not a premium-based insurance in the traditional sense. The government pays the premium on behalf of beneficiaries. Two implementation models exist:

• Insurance Model: State ties up with insurance companies who manage claims

• Trust Model: State sets up a dedicated health trust that directly manages claims (e.g., Andhra Pradesh, Telangana)

Beneficiary identification uses SECC 2011 data for rural areas (based on deprivation and occupation criteria) and NSSO categories for urban areas. Beneficiaries are identified via Aadhaar or ration card; a 'golden card' is issued.

4.2 Health Benefit Packages (HBPs)

PM-JAY covers 1,949 medical and surgical procedures across:

• Oncology (cancer treatment)

• Cardiology and cardiac surgery

• Orthopaedic surgery

• Neurosurgery

• Neonatology and paediatrics

• Dialysis for chronic kidney disease

• Mental health (included in 2019 revision)

All procedures are pre-defined with package rates negotiated by NHA, covering surgeon fees, room charges, medicines, and diagnostics.

4.3 Ayushman Bharat – Health and Wellness Centres (HWCs)

PM-JAY is the hospitalisation arm; the complementary pillar is 1.5 lakh Health and Wellness Centres (HWCs) for comprehensive primary healthcare. Together, they form the Ayushman Bharat model:

• HWCs: Prevent and manage chronic diseases at primary level, reducing hospitalisation need

• PM-JAY: Covers catastrophic hospitalisation costs when primary care is insufficient

This two-pillar architecture is designed to address both routine and catastrophic health needs within a continuum of care.

4.4 Challenges and Gaps

• Exclusion of the 'missing middle': PM-JAY covers only the poorest 40%; the informal sector workers between BPL and formal employees (40% of population) are excluded from both PM-JAY and employer health insurance

• Out-of-Pocket Expenditure (OOPE): Despite PM-JAY, India's OOPE remains high at ~48% of total health expenditure — among the highest globally; PM-JAY covers only hospitalisation, not outpatient/medicines/diagnostics

• Fraud and Moral Hazard: Multiple instances of inflated claims, ghost patients, and unnecessary procedures by empanelled private hospitals — CAG audit (2021) documented fraudulent payments

• Primary Care Neglect: Insurance model skews towards hospitalisation; preventive care and primary care investment may decline as political focus shifts to PM-JAY

• Quality of Care: Private hospitals empanelled under PM-JAY may provide sub-optimal quality to 'PM-JAY patients' while maintaining higher standards for paying patients

• Geographic Inequity: Hospitalisation rates and PM-JAY utilisation are concentrated in states with better health infrastructure — poorer states (UP, Bihar, MP) show low utilisation

• State Reluctance: Some states (Tamil Nadu, Odisha, West Bengal) did not initially join PM-JAY or operated parallel schemes; coordination remains complex

4.5 Universal Health Coverage (UHC) Context

UHC, as defined by the WHO, means all people can access quality essential health services without suffering financial hardship. PM-JAY contributes to UHC's financial protection dimension but falls short of comprehensive UHC because:

• It covers hospitalisation (tertiary) but not outpatient/primary care (where 70% of health spending occurs)

• It does not cover medicines purchased outside hospital — a major OOPE driver

• Quality and availability of services varies widely across empanelled facilities

India's National Health Policy 2017 envisions UHC through a combination of strong public primary care (NHM/HWCs) + financial protection for hospitalisation (PM-JAY) — but implementation of both pillars simultaneously remains the challenge.

Important Concepts

SECC 2011 (Socio-Economic Caste Census):

The database used to identify PM-JAY beneficiaries. Rural beneficiaries identified by 5 deprivation criteria (e.g., kutcha housing, no adult earning member); urban beneficiaries by 11 occupational categories.

National Health Authority (NHA):

Apex body implementing PM-JAY, chaired by CEO. NHA negotiates package rates, empanels hospitals, and monitors claims through IT systems.

ABHA (Ayushman Bharat Health Account):

14-digit unique health ID that stores a citizen's health records digitally — part of the Ayushman Bharat Digital Mission (ABDM). Enables continuity of care across providers.

Moral Hazard in Health Insurance:

When insurance coverage leads to overconsumption of healthcare — unnecessary admissions, inflated procedures — creating fiscal burden. PM-JAY has documented this issue in CAG audits.

Out-of-Pocket Expenditure (OOPE):

Direct health payments by households at point of service (excluding insurance). India's OOPE at ~48% is catastrophically high — a major cause of poverty. SDG 3.8 targets 'financial risk protection'.

Current Relevance

• Ayushman Bharat for Senior Citizens (2024): Government extended PM-JAY to all citizens aged 70 and above regardless of income — a significant expansion

• PM-JAY has crossed 5 crore hospital admissions — a landmark in scale, though quality debates continue

• ABDM integration: All PM-JAY hospitalisation records being linked to ABHA digital health ID — enabling longitudinal health data

• CAG Report (2021): Flagged irregular payments, ghost beneficiaries, and empanelment issues — reform is ongoing

• 15th Finance Commission recommended increasing health expenditure to 2.5% of GDP; PM-JAY's expansion requires sustainable fiscal headroom

• International comparison: Thailand's Universal Coverage Scheme, Rwanda's Mutuelle de Santé often cited as models; India's scale is unique but so are its implementation challenges