Is Ayushman Bharat truly a pro-poor health scheme?

The Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) recently achieved a milestone of one crore beneficiaries since its launch in September 2018. The scheme provides an annual health cover of Rs 5 lakh per family for secondary and tertiary care hospitalisation, covering 1,400 procedures spread over 23 specialties. The eligible beneficiaries include over 10.74 crore households, accounting for around 50 crore persons, all from the bottom 40% of the economic scale of the population.

Recently when PM Modi mentioned the Ayushman Bharat scheme in his Mann Ki Baat radio programme on May 31, he said that he wanted to resolve the distress of millions of impoverished citizens who, for decades, “have been living their lives engulfed by the constant concern of what will happen if they fall ill: seek medical treatment, or worry about earning bread for the family?”

Good intentions apart, even after being covered by this mammoth micro-insurance scheme, the underprivileged find themselves confronted with the choice between seeking medical treatment or working to earn wages.

PMJAY has thus far overlooked the health insurance benefit that could remove this: compensation for lost wages during hospitalisation. In fact, in evaluating the success of this scheme, what matters, even more than the beneficiaries count, is understanding how well the scheme removes the need to choose between seeking care and seeking livelihood. This dilemma can be resolved when the scheme indemnifies the poor for the direct and indirect costs of hospitalisation.

The scheme has spent around Rs 13,412 crore on health treatments; 50% of beneficiaries are women; 80% are from rural pockets; 70% availed surgical interventions. Although the poor have some kind of social security now, an assessment of the true worth of this scheme must be made.

Ayushman Bharat fails to recognise and compensate the indirect costs associated with hospitalisation, and these are not negligible for the poor. These include expenses on travelling to the hospital and back. Additionally, staying in a hospital or at home, after hospitalisation, implies a loss of wages. Often, attending caregivers from the family also have to forgo wages for several days.

It is therefore indisputable that even insured beneficiaries would incur high indirect costs during hospitalisation which could exceed their ability to pay. They may be obliged to avoid or delay treatment as they cannot afford to lose their wages. For the same reason, those availing hospitalisation may join work before complete recovery. Evidence on such practices confirms that delaying treatment when hospitalisation is necessary has grave health consequences. Also, returning to work prematurely can hamper complete recovery.

Thus, it is necessary to enlarge the benefits to include loss of wages during hospitalisation. This is already the prevailing practice of specific comparable schemes. Such plans provide a “hospital cash” benefit or “wage loss” benefit, which is a fixed amount for transportation and wage loss for each day of hospitalisation.

Micro-insurance guru David Dror (who worked for over a decade in Indian villages) has explained that micro-insurance can succeed when it is needs-based and demand-driven, providing coverage for risks that the target community prioritises. He promotes the idea of involving community representatives in designing the benefits package.

In his recent book “Health Microinsurance: Implementing Universal Health Coverage in the Informal Sector,” Dror explains that wage loss benefit can be payable after a waiting period, which is defined by a minimum number of days’ stay in the hospital. Moreover, the benefit can be capped by a maximum amount per day, and a maximum number of days.

The Self-Employed Women’s Organisation (SEWA), which operates an insurance cooperative called VimoSEWA, has devised precisely such a benefit. SEWA members enjoy the PMJAY scheme for hospitalisation cover, plus a hospital cash benefit to compensate indirect costs and wage loss during hospitalisation. The members’ family is also covered, for more comprehensive protection of the household’s livelihood.

Women’s World Banking offers its members a hospital cash product called ‘Caregiver’, which provides a fixed amount to the beneficiary for each night of hospitalisation, irrespective of the actual expenses incurred. This top-up coverage can be used with any other social security scheme that members may enroll in.

Drawing from the experience of these micro-insurers, we can infer that PMJAY would appeal to the disadvantaged only when it adds a hospital cash benefit. Such enhancement of the coverage could make the scheme truly pro-poor, and more effective in protecting the nation’s underprivileged. And, considering that this added benefit would be conditional on prior hospitalisation, there is no risk of moral hazard or unwarranted claims.

The government also needs to address some implementation issues of the scheme. For one, there is a pressing need to improve its outreach, as millions of deserving citizens remain excluded because of the enrolment criteria, or they are not well-informed about this insurance, and sometimes due to limited administrative infrastructure.

Another drawback of PMJAY is the limited network of empanelled hospitals for treatment. Moreover, some private hospitals insist on an upfront payment, which they promise to reimburse only after the government pays for the treatment. This defeats the cashless feature of PMJAY.

If PMJAY can overcome these shortcomings, and also incorporate a hospital cash component, it could genuinely claim to be the world’s largest and most successful national health protection scheme.

While the nation braves the ongoing coronavirus pandemic with limited resources, the poor may have availed free testing and treatment, however, the wages lost due to hospitalisation remain uncompensated. At this juncture, the country needs a holistic health insurance package which can help the underprivileged tide over their health risks without compromising their financial assets.

(The writer is an independent researcher and writer based in New Delhi)