Hospitalisation under the recently-launched Pradhan Mantri Jan Arogya Yojana (PM-JAY) will be 1 lakh/day as the scheme stabilises and the annual cost will double to over Rs 20,000 crore, Ayushman Bharat CEO Indu Bhushan said on Friday.
After the PM-JAY launch on September 23, about 20,000 people have taken free-of-cost hospitalisation benefit, most of whom are from Chhattisgarh.
The average hospitalisation is about 4,000 per day after the scheme was rolled out on September 23. Bhushan said about 25 lakh could benefit from free hospitalisation by the end of March 2019.
Hospitalisation rate would further rise to 1 lakh/day when beneficiaries from under-served states Uttar Pradesh, Bihar and Madhya Pradesh, which account for one-third of India’s population, fully access the scheme.
Speaking at Indian Express Group’s Idea Exchange programme, Bhushan said: “I am very sure that there will be explosion of demand (for the scheme)”. He noted that the NSSO data indicated an inverse correlation between health and the proportion of people who are ailing. “For instance, the healthy states where infant mortality rate is very low and all the health indicators are good, proportion of people who claim to be sick are high. This is obviously because people are more aware and are indeed reporting sickness. Conversely, in states where infant mortality is high you will find report of sickness low,” he said. The official expects PM-JAY would trigger the latent demand for sickness reporting and hospitalisation.
According to sources, the Centre and states will likely cap their combined annual premium outgo for the ambitious scheme at around Rs 1,110/family. Under the scheme, Rs 5-lakh-a-year free health cover is proposed to be given to10.7 crore households, or about 50 crore people. The annual premium cost, now seen at around Rs 11,000 crore, will be shared in a 6:4 ratio between the Centre and states. The cost of the scheme would be much lower in FY19, as half of the year is over and some populous northern states implementing such a scheme for the first time would take time to fully it roll out.
Development economist and activist Jean Dreze recently said that Modicare will cost Rs 50,000 crore annually if the beneficiaries utilise an average 1% of their `5 lakh cover in a year. He said the cost could be double if the scheme makes it reasonably easy for people to claim the insurance money.
“The bottom 20% of India’s population has a hospitalisation ratio of 2% now, which is 1 crore (of the 50 crore covered under PM-JAY) need hospitalisation in a year. With hospitalisation expenses at Rs 8,000-10,000 per person, the cost will be a little over Rs10,000 crore/annum,” Bhushan said responding to Dreze’s estimate. He said his estimates are in line with the outcome of the study of the healthcare-seeking behaviour and what has been the average premium discovered through bidding by some states. “Of course, as the scheme becomes more mainstream and deeper, we expect that hospitalisation will increase from 2% to 3% or 4%. With 4%, the cost will go to Rs20,000 crore annually,” the official said. Of 31 states which are on board for the scheme, 18 are under trust model with costs covered by the Centre and states from the corpus created from the contribution by the Centre and states. Only seven are under the insurance mode, while six are under a hybrid model where part of the cover is under the insurance model and the rest under the trust model. “Most states were impressed by the trust models of Andhra Pradesh and Telangana and chose the trust model as it is more flexible than the insurance model,” Bhushan said.
However, the bid for Chhattisgarh’s “hybrid” model was won by Religare Health, which put in a bid of Rs 1,100 per family for just a Rs 50,000 cover. Bhushan said this was due to a high hospitalisation ratio as people in the state were used to a similar scheme earlier. This ratio, however, would be one-third of Chhattisgarh’s in populous UP, MP and Bihar.