Enthused by the success of other Pradhan Mantri schemes such as Jan Dhan Yojana, the Modi government has rolled out a mammoth scheme, deemed the largest in the world, to provide free health insurance to India’s poor and marginalised families. Named Pradhan Mantri Jan Ayogya Yojana or Ayushman Bharat, the scheme was rolled out this week.
What is it?
Ayushman Bharat (thankfully not an acronym) is a health insurance scheme under which 10.74 crore poor households across India will be eligible for reimbursement of up to ₹5 lakh per year towards hospitalisation expenses of their family members. Apart from the expenses on in-patient treatment, the scheme also covers pre- and post-hospitalisation costs to some extent.
The government has drawn up a list of families to be covered based on the Socio-Economic Caste Census conducted in 2011. In rural areas, households living in one room kuccha homes, those with no adult members, those headed by women, those belonging to SC/ST, the homeless and landless are some of the beneficiaries. In the cities, beneficiaries include rag pickers, street vendors, domestic help, sanitation workers, shop workers and so on.
Under the scheme, patients are entitled to get cashless treatment from empanelled government and private hospitals. Insurance payouts will be based on the package rates prescribed by the government for 1,354 ailments. But for anyone to avail of the scheme, his or her name must feature in the SECC database and he/she must furnish proof of identity (not necessarily Aadhaar) to enrol.
Why is it important?
A 2015 survey by the NSSO presented some alarming statistics on the extent to which medical emergencies batter the finances of poor families at Bharat. The survey showed that hospitalisation expenses for critical ailments had shot up by 300 per cent over a decade. With over 80 per cent of the households not covered by any health scheme, most of the cost was met out-of-pocket. An estimated 6 million families sink into poverty each year due to hospitalisation. Ayushman Bharat, by targeting the 40 per cent of India’s households at the lower rungs of the socio-economic ladder, tries to pre-empt this battering to family finances from sudden healthcare costs, by ensuring cashless treatment.
The use of insurance to reimburse healthcare costs ensures more bang for the buck for the Centre, as more households can be covered with a limited budget outlay. Premium costs for the scheme are expected to be shared between the Centre and each State in a 60-40 ratio, with States expected to voluntarily opt into the scheme. The collaborative model ensures that State governments do their bit on last-mile delivery of healthcare services. As of now, 26 States had opted to join this scheme with over 8,700 public and private hospitals empanelled.
Why should I care?
As an overburdened taxpayer, if you’ve always ranted about the government splurging your money on all the wrong things, this is one scheme that can make you feel good about how your tax rupees are spent. If Ayushman Bharat manages to work as it should to provide immunity to Bharat against financial losses from sudden medical emergencies, it can play a big role in uplifting both the economic status and quality of life for the poor. At the same time, the fact that this is an insurance-based scheme targeted at verified households reduces leakage in expenditure. Estimates suggest that this scheme will require a fairly modest Central budget outlay of ₹12,000 crore when its rollout is complete. Given that the Centre raises tax revenues of over ₹13 lakh-crore and ends up spending ₹22 lakh-crore a year, that’s not a big sum to splurge.