India has completed four years of Ayushman Bharat Pradhan Mantri-Jan Arogya Yojana (AB-PMJAY), the world’s largest public health insurance programme.

What is Ayushman Bharat?

• Ayushman Bharat is National Health Protection Scheme, which will cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries) providing coverage upto 5 lakh rupees per family per year for secondary and tertiary care hospitalization.
• It was launched in September 2018 by the Ministry of Health and Family Welfare.
• It is a centrally sponsored scheme and is jointly funded by both the union government and the states.
• It has subsumed the on-going centrally sponsored schemes – Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS).

Features of the scheme

• It will have a defined benefit cover of Rs. 5 lakh per family per year.
• Benefits of the scheme are portable across the country and a beneficiary covered under the scheme will be allowed to take cashless benefits from any public/private empanelled hospitals across the country.
• It will be an entitlement based scheme with entitlement decided on the basis of deprivation criteria in the SECC database.
• The beneficiaries can avail benefits in both public and empanelled private facilities.
• To control costs, the payments for treatment will be done on package rate (to be defined by the Government in advance) basis.

India’s health expenditure post Ayushman Bharat

Ans. India’s public healthcare spending is still among the lowest in the world.

• Total health expenditure declined to 3.2% of GDP in 2018-19 from 3.3% in 2017-18, while the government’s health expenditure (centre and state) as a percentage of GDP fell from 1.35% to 1.28% in the same period.
• National health estimates showed the Centre’s share decreasing to 34.3% in 2018-19 from 40.8% in the previous year, while that of states rose from 59.2% to 65.7%.
• Out-of-pocket spending as a percentage of total health expenditure declined to 48.2% in 2018-19, though it is significantly higher than the world average of 18.1% in 2019

What about health insurance penetration?

Ans. Retail health insurance covers a meagre 3.2% of the country’s population.

• With a population of 1.36 billion, India is the world’s second most populous country, and is expected to surpass China soon.
• Launched in 2018 to provide universal health coverage, AB-PMJAY, takes care of the bottom 50% of the population of approximately 700 million individuals.
• The top 20% of the population is covered through social and private health insurance.
• Therefore, about 30% of the population, or about 400 million, is “the missing middle”— they don’t have any financial protection for health emergencies.

Why is sound healthcare important for the economy?

• Covid-19 exposed the economic consequences of poor healthcare. Higher out-of-pocket healthcare spending hits savings and consumption.
• In the work space, poor health impacts physical and mental abilities, increase turnover and lead to lower productivity.
• Data shows that 7% of India’s population is pushed into poverty every year due to healthcare costs.

Way forward

• Healthcare management and disease prevention should be the focus, along with an all-encompassing healthcare system, including OPD.
• The government also needs to pay attention on healthcare cover for “the missing middle” population.
• As a pilot, states may allow the authority already implementing the AB-PMJAY scheme in the state to cover the missing middle.

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