Independent Research and Policy Advocacy

Pradhan Mantri Jan Arogya Yojana (PM-JAY): The Scheme and it’s Potential to Reform India’s Healthcare System

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Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY) is a health insurance/ assurance scheme which was launched by the Government of India (GoI) in September 2018. It is the second component under Ayushman Bharat; a scheme envisioned to achieve Universal Health Coverage (UHC) in India. Together with the first component, Health and Wellness Centres (HWC), Ayushman Bharat envisages to address healthcare needs at the primary, secondary, and tertiary levels in a holistic manner (National Health Authority, n.d.).

PM-JAY is fully funded by the government and the costs are shared between the central and the state governments. It provides a health cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalisation through public and private empanelled hospitals in the country. It is specifically targeted at 10.74 crore poor and vulnerable families (approximately 50 crore beneficiaries). Through its insurance cover and cashless access to healthcare services, it aims to help mitigate catastrophic expenditure on medical treatment. The empanelled hospitals are paid based on pre-agreed health benefits package (HBP) rates. HBP covers costs of a specified treatment and includes 3 days pre- and 15 days post-hospitalisation expenses. The revised Health Benefits Package 2.0 now covers 867 packages split across 1573 procedures2 . The responsibility of implementing the scheme has been entrusted with the National Health Authority (NHA) at the centre and the State Health Authorities (SHA) at the state level (National Health Authority, n.d.).

In this note, we briefly review the above described design of PM-JAY and explore three key questions – 1) Is PM-JAY designed to meet its stated objectives? 2) How can we tweak the scheme in a manner that allows it to punch above its fiscal weight? 3) What role can PM-JAY play in reforming India’s healthcare system? Before attempting to answer these questions, we first look at some of the key performance measures of PM-JAY as it heads towards completing three years in September 2021.

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