Health cover: Capacity for Ayushman Bharat PM-JAY needs to be expanded

The expansion of the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) health insurance scheme to senior citizens above 70 years of age irrespective of income reflects an understanding of India’s evolving demographics. By 2050, according to the United Nations Population Fund, the percentage of elderly people in India’s population is expected to double to over 20 per cent. Given that the medical expenses of this cohort of the population tend to be higher, greater state support is to be welcomed. It is a pity that Delhi and West Bengal, with elderly populations of 8 and 11 per cent, have chosen to opt out of the scheme, as they did when the PM-JAY was announced in 2018. The contention of the chief ministers of these two states that their administrations provide better health care schemes for their citizens is neither here nor there. Kerala and Tamil Nadu, run by parties opposed to the Bharatiya Janata Party, have arguably some of the most efficient schemes but opted to allow the PM-JAY to operate. Doing so gives their citizens a wider choice, and competition inevitably generates its own efficiency. Indeed, it would be no coincidence that these two states have the highest rate of utilisation of the PM-JAY among states.

 

That said, the expansion of the scheme is likely to exert greater pressure on medical infrastructure. The scheme aims to provide annual cashless and paperless health cover of up to Rs 5 lakh per family per year, irrespective of age, for secondary and tertiary care hospitals for families comprising the bottom 40 per cent of the population economically. So far, the scheme has reached over 56 per cent of targeted beneficiaries. Under the new scheme, those in the 70+ age group for families covered by the PM-JAY will get the benefit of a Rs 5 lakh topup for themselves. This expansion is likely to cover around 60 million senior citizens from 45 million families. To make it work optimally, however, the government needs to address some of the key challenges in the current scheme that may worsen with the expansion.

 

One critical problem is a shortage of hospital facilities. According to the National Health Authority (NHA), which administers the scheme, more than 30,000 hospitals and health centres are empanelled under the Ayushman Bharat. Of those, 13,582 are private facilities. This number is too small to accommodate the mass of people eligible for the scheme. Nor are facilities evenly distributed across states. According to a Comptroller and Auditor General report, many states had between two and 10 empanelled hospitals per 100,000 people. Health care analysts have also pointed out that the added patient numbers would be particularly tough on small and medium hospitals, which operate on tight margins.

 

Also, the financial mechanics of the scheme need streamlining. Though the PM-JAY has seen some reduction in out-of-pocket (OOP) medical expenditure, studies show it has not brought down the financial risks significantly. This is principally because the PM-JAY does not pay for out-patient consultations. This apart, several hospital associations have complained of lower rates and delays in reimbursement. The Punjab chapter of the Indian Medical Association, for instance, has announced the suspension of treatment under the scheme for empanelled private hospitals in the state until dues worth Rs 600 crore are cleared. Addressing such basic administrative problems is critical to the scheme in improving the average Indian’s access to health care.