Why It's Easier to Succeed With About Pradhan Mantri Jan Arogya Yojana (PM-JAY) Than You Might Think

Ayushman Bharat

Ayushman Bharat, a flagship scheme of the Government of India, was launched as recommended by the National Health Policy 2017, to achieve the vision of Universal Health Coverage (UHC). This initiative has been designed to meet Sustainable Development Goals (SDGs) and its underlining commitment, which is to "leave no one behind." Ayushman Bharat is an attempt to move from a sectoral and segmented approach of health service delivery to a comprehensive need-based health care service.

This scheme aims to undertake path-breaking interventions to holistically address the healthcare system (covering prevention, promotion and ambulatory care) at the primary, secondary and tertiary level. Ayushman Bharat adopts a continuum of care approach, comprising of two inter-related components, which are -

  1. Health and Wellness Centres (HWCs)
  2. Pradhan Mantri Jan Arogya Yojana (PM-JAY)
  3. Key Features of PM-JAY
  4. Benefit Cover Under PM-JAY
  5. Why PM-JAY: A Background.

1. Health and Wellness Centers (HWCs)

In February 2018, the Government of India announced the creation of 1,50,000 Health and Wellness Centres (HWCs) by transforming the existing Sub Centres and Primary Health Centres. These centres are to deliver Comprehensive Primary Health Care (CPHC) bringing healthcare closer to the homes of people. They cover both, maternal and child health services and non-communicable diseases, including free essential drugs and diagnostic services.

Health and Wellness Centers are envisaged to deliver an expanded range of services to address the primary health care needs of the entire population in their area, expanding access, universality and equity close to the community. The emphasis of health promotion and prevention is designed to bring focus on keeping people healthy by engaging and empowering individuals and communities to choose healthy behaviours and make changes that reduce the risk of developing chronic diseases and morbidities.

2. Pradhan Mantri Jan Arogya Yojana (PM-JAY)

The second component under Ayushman Bharat is the Pradhan Mantri Jan Arogya Yojna or PM-JAY as it is popularly known. This scheme was launched on 23rd September 2018 in Ranchi, Jharkhand by the Hon’ble Prime Minister of India, Shri Narendra Modi. Ayushman Bharat PM-JAY is the largest health assurance scheme in the world which aims at providing a health cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalization to over 10.74 crores poor and vulnerable families (approximately 50 crore beneficiaries) that form the bottom 40% of the Indian population.

The households included are based on the deprivation and occupational criteria of Socio-Economic Caste Census 2011 (SECC 2011) for rural and urban areas respectively. PM-JAY was earlier known as the National Health Protection Scheme (NHPS) before being rechristened. It subsumed the then-existing Rashtriya Swasthya Bima Yojana (RSBY) which had been launched in 2008. The coverage mentioned under PM-JAY, therefore, also includes families that were covered in RSBY but are not present in the SECC 2011 database. PM-JAY is fully funded by the Government and the cost of implementation is shared between the Central and State Governments.

Key Features of PM-JAY

PM-JAY is the world’s largest health insurance/ assurance scheme fully financed by the government. It provides a cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalization across public and private empanelled hospitals in India. Over 10.74 crore poor and vulnerable entitled families (approximately 50 crore beneficiaries) are eligible for these benefits. PM-JAY provides cashless access to health care services for the beneficiary at the point of service, that is, the hospital. PM-JAY envisions to help mitigate catastrophic expenditure on medical treatment which pushes nearly 6 crore Indians into poverty each year. It covers up to 3 days of pre-hospitalization and 15 days of post-hospitalization expenses such as diagnostics and medicines. There is no restriction on the family size, age or gender. All pre-existing conditions are covered from day one. Benefits of the scheme are portable across the country i.e. a beneficiary can visit any empanelled public or private hospital in India to avail cashless treatment. Services include approximately 1,393 procedures covering all the costs related to treatment, including but not limited to drugs, supplies, diagnostic services, physician's fees, room charges, surgeon charges, OT and ICU charges etc. Public hospitals are reimbursed for the healthcare services at par with the private hospitals.

Benefit Cover Under PM-JAY

Benefit cover under various Government-funded health insurance schemes in India has always been structured on an upper ceiling limit ranging from an annual cover of INR30,000 to INR3,00,000 per family across various States which created a fragmented system. PM-JAY provides cashless cover of up to INR5,00,000 to each eligible family per annum for listed secondary and tertiary care conditions. The cover under the scheme includes all expenses incurred on the following components of the treatment.

  • Medical examination, treatment and consultation
  • Pre-hospitalization
  • Medicine and medical consumables
  • Non-intensive and intensive care services
  • Diagnostic and laboratory investigations
  • Medical implantation services (where necessary)
  • Accommodation benefits
  • Food services
  • Complications arising during treatment
  • Post-hospitalization follow-up care up to 15 days

The benefits of INR 5,00,000 are on a family floater basis which means that it can be used by one or all members of the family. The RSBY had a family cap of five members. However, based on learnings from those schemes, PM-JAY has been designed in such a way that there is no cap on family size or age of members. In addition, pre-existing diseases are covered from the very first day. This means that any eligible person suffering from any medical condition before being covered by PM-JAY will now be able to get treatment for all those medical conditions as well under this scheme right from the day they are enrolled.

Why PM-JAY: A Background.

Over the last few decades, the world’s eyes have been on India as its economy has been one of the top three fastest-growing economies of the world. However, despite making remarkable strides in several sectors, India is still classified as a Lower Middle-Income Country (LMIC) according to the World Bank classification of countries based on per capita GDP, mostly due to its inconsistent socio-economic and health indicators. Statistics show that more than 20 per cent of India’s population still lives under $1.9 per day (2011 PPP). According to a World Bank projection, by 2021 more than 34% of India’s population will be in the age group of 15-35 years. This rich demographic dividend enables India to be highly optimistic about sustained economic growth for few more decades before a higher dependency ratio sets in.

However, the perceived benefits of the higher demographic dividend are threatened by the epidemiological transition in India which is currently facing the unique situation of a “triple burden of disease.” As the mission of eradication of major communicable diseases remains unfinished, the population is also bearing the high burden of non-communicable diseases (NCDs) and injuries. This leads to an overall rise in the demand for health care over a prolonged period of time. However, with a total population of more than 1.3 billion people, the supply side of adequate and affordable healthcare in India is found wanting.

Figures show an overwhelming tilt towards health care services in the private sector which cater to nearly 70% of all visits for health care needs in India and have 50% of total hospital beds. But, individually most providers in the private sector are very small (with less than 25 beds). They are also unregulated, with varying standards of quality of care and are mostly situated in large metros or urban neighbourhoods leaving a great deficit of health services for the underprivileged population of India. But being the second most populous nation in the world, the public sector hospitals in India are understandably overburdened.

Their utilisation varies widely and they often have to work under challenging circumstancing arising from the lack of sufficient funds, a shortage of trained health workers and the erratic and often deficient supply of drugs and equipment which adversely impacts their functioning. One of the major causes of this situation is the persistent underfunding of the country’s public health care system. Over the last two decades, the Government of India’s overall expenditure on health has remained stagnant at about 1.2% of its GDP (Source: National Health Accounts, 2015). Of its total expenditure on health, India spends only 21% of the Government revenue and as high as 62% from out-of-pocket expenses (Source: National Health Accounts, 2015).

Thus, it has been deduced that increasing health care needs, coupled with high out-of-pocket expenditure, is a leading cause of poverty in India. Not only does it keep people poor, but it also pushes nearly 6 crore Indians back into poverty each year. The following graph depicts this situation clearly by comparing the OOP to total expenditure on health in two decades. India health spending patterns image In the past, there have been several efforts by the Central and various State Governments to strengthen demand-side financing by launching various Government-funded health insurance schemes.

The Rashtriya Swasthya Bima Yojana (RSBY) was launched with an annual cover of INR30,000 per family at the central level which catered mostly to secondary care hospitalisation while many State schemes catered to tertiary care conditions. However, these schemes worked independently of the larger health care system in the country and resulted in further increasing the fragmentation of risk pools. Additionally, none of these schemes had any linkage with primary health care. To address these challenges, the Government of India took a two-pronged approach under the umbrella of Ayushman Bharat.

The first component of this strategy was disease prevention and health promotion to curb the increasing epidemic of non-communicable diseases. This was to be ensured through the up-gradation of the existing network of Sub-centres and Primary Health Centres to Health and Wellness Centres (HWC). Nearly 150,000 HWCs are to be set up in the country over the next few years which will work towards reducing the overall disease burden and hospitalisation needs of the population.

The second component was the launch of the Pradhan Mantri-Jan Arogya Yojana (PM-JAY) which aims to create a system of demand-led health care reforms that meet the immediate hospitalisation needs of the eligible beneficiary family in a cashless manner thus insulating the family from catastrophic financial shock. In the long run, the PM-JAY, through its system of incentives, aims to expand the availability of its services.

With greater demand, the private sector is likely to expand in the unserved areas of Tier-2 and Tier-3 cities. For public hospitals, PM-JAY will provide an incentive to prioritise poor patients and shall provide means to generate additional revenue for strengthening their infrastructure and fill their service gaps.

PM-JAY has subsumed the existing RSBY and also works in convergence with various State Government-funded health insurance/ assurance schemes. Because of its scope, PM-JAY is the world’s largest health insurance/assurance scheme that offers a health cover to nearly 10.74 crore poor families which comes to a staggering 50 crore Indians that form 40% of its bottom population. It is fully funded by the Government and provides financial protection for a wide variety of secondary and tertiary care hospitalisations. The prime objective of PM-JAY is to reduce catastrophic out-of-pocket health expenditure by improving access to quality health care for its underprivileged population. More details on its evolution, planning, eligibility and state-wise implementation are discussed ahead.