Ayushman Bharat: gamechanger or another hoax?

The Pradhan Mantri Jan Arogya Yojana (PMJAY), one of two components of Ayushman Bharat and described by many as the largest social health insurance programme in the world, was launched on September 23. Already, some have suggested that the prime minister be nominated for the Nobel Prize for this! The high expectations sought to be roused are unwarranted, going both by our past experience with insurance schemes as well as the confusions that plague the new scheme. It was included in the last union budget, almost as an afterthought, with a paltry allocation of Rs 2,000 crore and hardly any explanation of the details. The scheme has been finally launched by a government now nearly at the end of its tenure, with little time left to prove or disprove the tall claims made.

There has been a drift among policymakers towards insurance-based health care systems, given our failure to provide universal health care through an effective network of public health institutions. This failure has forced more than 70% of our people to depend on private hospitals, where high costs have made proper healthcare unaffordable for most. The result is there for everyone to see -– India’s healthcare achievements continue to trail those of our Asian neighbours. The most important factor responsible for this dismal performance has been lack of adequate public investment. Total government health expenditure (including the Centre and the states) is only 1.1% of GDP, far below the World Health Organisation recommendation of 4%. Thus, an overwhelming proportion of healthcare expenses are paid for by the patients out of their pockets.

It was in this background that the Manmohan Singh government launched the ‘Rashtriya Swasthya Bima Yojana’ in 2008. It was targeted to cover the entire BPL population, guaranteeing in-patient medical care upto Rs 30,000. However, it had enrolled only 10% of the population by 2011. Not only was the coverage poor but the benefit received by the insured has also been scanty.

During the last decade, the insurance companies have settled 1.2 crore claims, of which 53 lakh claims have been from Kerala. Thus, Kerala, with a share of 3% of the population, accounts for 42% of the claims in the country. It would appear that the insurance companies were the main beneficiaries of the public-financed health insurance system. Kerala had carefully customised the RSBY scheme to ensure that the public health system in the state was not undermined by the insurance scheme. As a result, more than 80% of the claims settled were in the public health system.

The RSBY enrolment in Kerala was 21.6 lakhs. An additional enrolment of 19.4 lakhs of non-BPL families was also made from the state government’s funds. Besides, all these 41 lakh beneficiaries were also assured free additional treatment upto Rs 2 lakh in the public health system for select procedures. Thus, the RSBY that existed in the state was a hybrid model of basic insurance of Rs 30,000 and an add-on of Rs 2 lakh on the assurance model, the latter entirely based on the public health system. Some other states also modified RSBY in a similar manner.

Lesser Central share

Now, the central government has launched AB-PMJAY, displacing the existing RSBY programme. Just as in RSBY, in the new scheme too, the cost of the premium would be shared by the Centre and state in the ratio 60:40. In RSBY, the eligible premium ceiling was Rs 1,250 (including Rs 500 towards additional benefit of Rs 30,000 per senior citizen in the household).

There has been no official announcement of the eligible premium ceiling in AB-PMJAY, but from unofficial statements made to the media, it is Rs 1,100, to be shared between Centre and state 60:40. It means, the central share of AB-PMJAY is less than that in RSBY. According to NHA guidelines, the central support would be limited to the actual premium, discovered through open tendering process, subject to a maximum ceiling decided by the Government of India.

We do not have an actuarial database to arrive at the probability of expected health episodes and its implication for cost of different treatments. However, discussions with insurance companies indicate that the premium cost would be between Rs 5,000-7,000 in Kerala. The central share of this actual premium cost could be only Rs 660 (60% of Rs 1,100). The number of beneficiaries eligible for enrolment in AB-PMJAY in Kerala is only 18.5 lakh. At any rate, none of the 41 lakh beneficiaries of RSBY can be excluded. The premium burden of these additional beneficiaries would be entirely upon the state. Kerala does not mind spending an additional amount for healthcare. After all, with no prompting from the Centre, it has historically been allocating much higher resources to healthcare sector than any other state in the country. But, there are questions to be settled.

If 80-85% of the burden of the insurance scheme is to be borne by the state, in what sense is it a centrally-sponsored programme? Is it not fair that there must be transparent deliberations on financing of the scheme? Shouldn’t there be sufficient scope for customising the scheme for each state? The high cost of insurance, without a corresponding increase in the overall healthcare budget, will result in a squeeze on the already meagre budgetary provisions for public health systems. The promise of 1,50,000 health and wellness centres to provide free universal healthcare is empty without the backing of adequate budgetary support. Note that allocations for the health and social sectors have been squeezed in the recent central budgets.

In all likelihood, most states are going to opt for a hybrid variety of insurance-assurance system which, in the absence of adequate investment in the secondary and tertiary public health sector, will subsidise the super speciality hospitals in the private sector. In the long run, there are the dangers of rising premium costs and erosion of coverage. In short, what is being touted as the world’s largest social health insurance programme would, like its predecessor, have much smaller coverage than the target, benefit insurance companies and private hospitals rather than the patients, and would further undermine the public health system in the country.

One will have to wait a couple of years before a proper assessment can be made of the newly launched healthcare scheme. Meanwhile, Ayushman Bharat will provide sufficient fodder for delusional propaganda meant for the coming elections.

(The writer is the finance minister of Kerala)

(The Billion Press)