The Centre will likely cap annual premium outgo for the ambitious Pradhan Mantri Jan Arogya Yojana (PM-JAY) at Rs 1,110/family, to provide Rs 5-lakh-a-year health cover to 10.74 crore households. The Niti Aayog had earlier estimated the premium at Rs 1,000-1,200. Between them, the Centre and states will share the scheme’s estimated annual cost of around Rs 12,000 crore in a 6:4 ratio.
According to sources, the cap on premium will be applicable for both the trust and insurance models for the scheme. A notification in this regard is expected shortly.
Since two-thirds of 30 states on board have opted for the trust model, the ultimate burden on the exchequer could be higher, a state government official said.
If the claims paid out to hospitals under the trust model are greater than the Centre/state government contributions, the losses will have to be shared between them; in the insurance model, any extra payouts are borne by the insurer.
Officials reckon that annual PM-JAY burden on the Centre would be Rs 7,153 crore, much lower than anticipated by many analysts. Since the scheme will be implemented in the second half of this year, the cost in 2018-19 could be about Rs 4,000 crore. So, with an additional allocation of Rs 2,000 crore (in the first supplementary demand for grants in July this year) over the Rs 2,000 crore allocated in the Budget under the head of Rashtriya Swasthya Bima Yojana, the Centre has technically made the provisions to fully fund the scheme in 2018-19.
However, the premium costs have already crossed the proposed cap in the small number of states where a limited insurance model is being used. Some states like Chhattisgarh are offering a “hybrid” model where insurance companies will pay for claims made below Rs 50,000/annum per family; claims above this and below Rs 5 lakh will be dealt with by the “trust”. The bid for Chhattisgarh’s “hybrid” model was won by Religare Health which put a bid of Rs 1,100 per family. The winning bid of Rs 1,100, though, means insurance costs have risen quite a lot since Rajasthan’s existing Bhamashah scheme offers a cover of Rs 5 lakh for a premium of Rs 1,263 while Chhattisgarh’s scheme offers just a Rs 50,000 cover.
In India, the citizens’ out-of-pocket (OOP) expenditure on health constitutes 62% of the total expenditure on health. For PM-JAY, over 8,000 hospitals have offered to join the network of empanelled facilities that would provide inpatient care to the identified beneficiaries. As many as 1,350 medical packages, covering surgery, medical and daycare treatments, have been identified so that the coverage includes most of the common medical conditions.
While the pilot of the PM-JAY was launched on August 15, Prime Minister Narendra Modi will formally launch the scheme from Ranchi on September 23. The scheme aims to provide free secondary and tertiary treatment to about 50 crore deprived people or 40% of the total population of the country and is seen as a big pro-poor initiative ahead of general elections next year.