AYUSHMAN BHARAT (MODICARE / NHPM)

AYUSHMAN BHARAT (MODICARE / NHPM)

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The Background

Providing good quality healthcare always has been on the government's agenda and Union and State level in India, though it could never be truly fulfilled. Full video explanation is at the end of this page.

• A major scheme - the Rashtriya Swasthya Bima Yojana (RSBY) - was launched in the year 2008 by the Ministry of Labour and Employment and provided cashless health insurance scheme with benefit coverage of Rs. 30,000/- per annum on a family floater basis [for 5 members], for Below Poverty Line (BPL) families, and 11 other defined categories of unorganised workers. 
• To integrate RSBY into the health system and make it a part of the comprehensive health care vision of Government of India, RSBY was transferred to the Ministry of Health and Family Welfare (MoHFW) w.e.f 01.04.2015. 
• During 2016-2017, 3.63 crore families were covered under RSBY in 278 districts of the country and they could avail medical treatment across the network of 8,697 empanelled hospitals. 
• In 2018, the National Health Protection Scheme (NHPS) came in the backdrop of the fact that various Central Ministries and State/UT Governments having launched health insurance/ protection schemes for their own defined set of beneficiaries. The Union Government felt a critical need to converge these schemes, so as to achieve improved efficiency, reach and coverage.
• To that end, on 21-March 2018, the Union Cabinet chaired by the Prime Minister Modi approved the launch of a new Centrally Sponsored Ayushman Bharat -National Health Protection Mission (AB-NHPM) having central sector component under Ayushman Bharat Mission anchored in the MoHFW. This AB-NHPM will subsume the on-going centrally sponsored schemes - Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS).

Understanding Ayushman Bharat

Ayushman Bharat Yojana mean 'long live India' scheme!

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• Ayushman Bharat is a progression towards promotive, preventive, curative, palliative and rehabilitative aspects of Universal Healthcare through access of Health and Wellness Centers (HWCs) at the primary level and provision of financial protection for accessing curative care at the secondary and tertiary levels through engagement with both public and private sector.

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• Understanding the terms!

• Promotive = enabling people take more control over their health status
• Preventive = care received to prevent diseases from occurring
• Curative = to cure patients, not just reduce immediate pain or suffering
• Palliative = relieve suffering in any major illness that is chronic and life-threatening
• Rehabilitative = to help patients recover and get back to leading normal lives

It is a national initiative launched as the part of National Health Policy 2017, in order to achieve the vision of Universal Health Coverage (UHC). This initiative has been designed on the lines as to meet the relevant Sustainable Development Goal (SDG) and its underlining commitment, which is “leave no one behind”.

The scheme focuses on providing increased access to quality of healthcare, free medication and diagnostic services for people with low financial status. It mostly covers poor, deprived rural families and identified BPL (below poverty line) families from both urban and rural India defined as per the latest Socio-Economic Caste Census (SECC) data. The aim is to ensure that the poor and needy do not fall back into poverty when hit by a medical crisis.




Ayushman Bharat (NHPM) = HWCs + NHPS ( PMJAY)


The terminologies may sound a little confusing, so let us clarify.

Ayushman Bharat (Modicare / NHPM) = HWCs + NHPS ( = PMJAY) 

(NHPS will include both existing schemes RSBY and SCHIS)

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• Two components of Ayushman Bharat scheme

1. Establishment of Health and Wellness Centres : This is a means to deliver comprehensive primary care for all, especially for the underprivileged and vulnerable people, who cannot afford medical treatment due to the over-priced medicines and investigations. These centres will provide Comprehensive Primary Health Care (CPHC), covering both maternal and child health services and non-communicable diseases, including free essential drugs and diagnostic services. The first Health and Wellness Centre was launched by the Prime Minister at Jangla, Bijapur, Chhatisgarh on 14th April 2018.
2. National Health Protection Scheme (NHPS) : Under the scheme, every eligible family is entitled to an insurance benefit of up to INR 5 lakhs per year in any private (empanelled) or public hospital across the country. This enables beneficiary’s cashless treatment at any secondary and tertiary health care facility. This is based on the principle of co-operative federalism with states of India. For implementation of the scheme, states have to establish a State Health Agency (SHA).

The objective, as stated above, is to focus on the wellness of the poor families, who often do not get proper care and treatment due to financial constraints. It is expected that more than 10 crore families can be benefitted under the scheme. NHPS is going to be the world’s largest Government funded health insurance scheme. It will incorporate the pre-existing, ongoing centrally sponsored schemes; namely Rashtriya Swasthya Bima Yojana (RSBY) and the Senior Citizen Health Insurance Scheme (SCHIS).

Summary of benefits in PM-JAY

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• The list of various benefits in the PM - Jan Arogya Yojana is as follows :

• Rs.5 lakh cover : Ayushman Bharat - National Health Protection Mission (AB-NHPM) will have a defined benefit cover of Rs. 5 lakh per family per year (per family)
• Portable Benefits : Benefits of the scheme are portable across the country and a beneficiary covered under the scheme will be allowed to take cashless benefits from any public/private empanelled hospitals across the country
• Entitlement-based : Ayushman Bharat - National Health Protection Mission will be an entitlement based scheme with entitlement decided on the basis of deprivation criteria in the SECC database
• Both private and public : The beneficiaries can avail benefits in both public and empanelled private facilities
• Cost control through pre-decided rates : To control costs, the payments for treatment will be done on package rate (to be defined by the Government in advance) basis
• Flexibility to states : One of the core principles of Ayushman Bharat - National Health Protection Mission is to co-operative federalism and flexibility to states
• National Health Agency (NHA) : For giving policy directions and fostering coordination between Centre and States, the NHA is set up. States would need to have State Health Agency (SHA) to implement the scheme.
• Escrow Account for funds transfer : To ensure that the funds reach SHA on time, the transfer of funds from Central Government through Ayushman Bharat - National Health Protection Mission to State Health Agencies may be done through an escrow account directly.
• IT platform for smooth running and fraud control : In partnership with NITI Aayog, a robust, modular, scalable and interoperable IT platform will be made operational which will entail a paperless, cashless transaction.

Details of benefits in PM-JAY

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• AB-NHPM will have a defined benefit cover of Rs. 5 lakh per family per year
• This cover will take care of almost all secondary care and most of tertiary care procedures. To ensure that nobody is left out (especially women, children and elderly) there will be no cap on family size and age in the scheme. The benefit cover will also include pre and post-hospitalisation expenses. All pre-existing conditions will be covered from day one of the policy. A defined transport allowance per hospitalization will also be paid to the beneficiary
• Portable Benefits
• Benefits of the scheme are portable across the country and a beneficiary covered under the scheme will be allowed to take cashless benefits from any public/private empanelled hospitals across the country.
• Entitlements based scheme
• AB-NHPM will be an entitlement based scheme with entitlement decided on the basis of deprivation criteria in the SECC database, The different categories in rural area include families having only one room with kucha walls and kucharoof; families having no adult member between age 16 to 59; female headed households with no adult male member between age 16 to 59; disabled member and no able bodied adult member in the family; SC/ST households; and landless households deriving major part of their income from manual casual labour, Also, automatically included families in rural areas having any one of the following: households without shelter, destitute, living on alms, manual scavenger families, primitive tribal groups, legally released bonded labour. For urban areas, 11 defined occupational categories are entitled under the scheme. The beneficiaries can avail benefits in both public and empanelled private facilities. All public hospitals in the States implementing AB-NHPM, will be deemed empanelled for the Scheme. Hospitals belonging to Employee State Insurance Corporation (ESIC) may also be empanelled based on the bed occupancy ratio parameter. As for private hospitals, they will be empanelled online based on defined criteria.
• Cost control
• To control costs, the payments for treatment will be done on package rate (to be defined by the Government in advance) basis. The package rates will include all the costs associated with treatment. For beneficiaries, it will be a cashless, paper less transaction. Keeping in view the State specific requirements, States/ UTs will have the flexibility to modify these rates within a limited bandwidth.
• Flexibility to states 
• One of the core principles of AB-NHPM is co-operative federalism and flexibility to states. There is provision to partner the States through co-alliance. This will ensure appropriate integration with the existing health insurance/ protection schemes of various Central Ministries/Departments and State Governments (at their own cost), State Governments will be allowed to expand AB-NHPM both horizontally and vertically. States will be free to choose the modalities for implementation. They can implement through insurance company or directly through Trust/ Society or a mixed model.
• Management structure
• For giving policy directions and fostering coordination between Centre and States, it is proposed to set up Ayushman Bharat National Health Protection Mission Council (AB-NHPMC) at apex level Chaired by Union Health and Family Welfare Minister. It is proposed to have an Ayushman Bharat National Health Protection Mission Governing Board (AB-NHPMGB) which will be jointly chaired by Secretary (HFW) and Member (Health), NITI Aayog with Financial Advisor, MoHFW, Additional Secretary & Mission Director, Ayushman Bharat National Health Protection Mission, MoHFW (AB-NHPM) and Joint Secretary (AB-NHPM), MoHFW as members. CEO, Ayushman Bharat - National Health Protection Mission will be the Member Secretary, State Secretaries of Health Department may also be members as per the requirement. It was originally proposed to establish an Ayushman Bharat - National Health Protection Mission Agency (AB-NHPMA) to manage the AB-NHPM at the operational level in the form of a Society. Finally, the National Health Agency (NHA) was created. It will be headed by a full time CEO of the level of Secretary/ Additional Secretary to the Government of India.
• Funds management
• States would need to have State Health Agency (SHA) to implement the scheme States will have the option to use an existing Trust / Society / Not for Profit Company/ State Nodal Agency or set up a new Trust / Society / Not for Profit Company/ State Health Agency to implement the scheme and act as SHA. At the district level also, a structure for implementation of the scheme will need to be set up. To ensure that the funds reach SHA on time, the transfer of funds from Central Government through AB-NHPMA to State Health Agencies may be done through an escrow account directly. The State has to contribute its matching share of grants within defined time frame.
• IT infrastructure
• In partnership with NITI Aayog, a robust, modular, scalable and interoperable IT platform will be made operational which will entail a paperless, cashless transaction. This will also help in prevention / detection of any potential misuse / fraud / abuse cases. This will be backed by a well-defined Grievance Redressal Mechanism. In addition, pre-Authorisation of treatments with moral hazards (Potential of misuse) will be made mandatory.

Financial impact on families

In-patient hospitalization expenditure in India has increased nearly 300% during last ten years (NSSO 2015). More than 80% of the expenditure are met by out of pocket (OOP). Rural households primarily depended on their 'household income / savings' (68%) and on 'borrowings' (25%), the urban households relied much more on their 'income / saving' (75%) for financing expenditure on hospitalizations, and on '(18%) borrowings. (NSSO 2015). Out of pocket (OOP) expenditure in India is over 60% which leads to nearly 6 million families getting into poverty due to catastrophic health expenditures. 

Thus, AB-NHPM will have major impact on reduction of Out Of Pocket (OOP) expenditure on ground of:

• Increased benefit cover to nearly 40% of the population, (the poorest&the vulnerable)
• Covering almost all secondary and many tertiary hospitalizations. (except a negative list)
• Coverage of 5 lakh for each family, (no restriction of family size)

This will lead to increased access to quality health and medication. In addition, the unmet needs of the population which remained hidden due to lack of financial resources will be catered to. This will lead to timely treatments, improvements in health outcomes, patient satisfaction, improvement in productivity and efficiency, job creation thus leading to improvement in quality of life.

Expenditure involved


The expenditure incurred in premium payment will be shared between Central and State Governments in specified ratio as per Ministry of Finance guidelines in vogue. The total expenditure will depend on actual market determined premium paid in States/ UTs where AB-NHPM will be implemented through insurance companies. In States/ UTs where the scheme will be implemented in Trust/ Society mode, the central share of funds will be provided based on actual expenditure or premium ceiling (whichever is lower) in the pre-determined ratio.


Number of Beneficiaries

As the world's largest scheme of its kind, the AB-NHPM will target about 10.74 crore poor, deprived rural families and identified occupational category of urban workers' families as per the latest Socio-Economic Caste Census (SECC) data covering both rural and urban. The scheme is designed to be dynamic and aspirational and it would take into account any future changes in the exclusion/ inclusion/ deprivation/ occupational criteria in the SECC data.

Concerns and criticism

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• CRITICISM 1. Insurance based model
• The Ayushman Bharat model is an insurance based model. Government says it will pay the premium. Many doubt it will work out properly. Experts feel the right model for India is the one seen in Europe –  vast expansion of public facilities, more public hospitals, more super specialities, more tertiary hospitals, more district level hospitals, more primary health centers, more doctors and nurses, more beds and free public health care. To suddenly launch a pan-India scheme without a robust physical infra can create huge bottlenecks.
• CRITICISM 2. Scope for fraud
• The government has called on companies to build an IT framework that can identify and trigger alerts for “suspicious” transactions in its ambitious PM Jan Arogya Yojana (PMJAY) health insurance scheme. About 14 companies have expressed interest in have expressed interest in designing this IT framework, one official told ET on condition of anonymity. The government has indicated “zero tolerance” for fraud. The health ministry has already released anti-fraud guidelines for states implementing PMJAY, known as Ayushman Bharat.   (Bhama Shah Scheme experience in Rajasthan is bad)
• CRITICISM 3. Will help private sector make money
• The quality and number of government hospitals is just not enough to cater to the massive demand that will now arise. So many new private hospitals and dispensaries will come up.  Is that the objective of the scheme? Why are funds not been given to massively upgrade the government sector? Many private sector corporate hospitals are not willing to work on the rates agreed upon.
• CRITICISM 4. Lack of hospitals and trained staff
• The quality and number of hospitals in Tier 3 and Tier 4 towns and rurban areas is either very poor, or non-existent. So as the AB-PMJAY raises expectations and people rush for getting treated, a lack of hospitals can lead to frustration. The number of doctors, nurses, trained technicians and other staff needed to pull off such a giant scheme is very large. We simply don’t have those numbers.

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• Thus, the Ayushman Bharat – Pradhan Mantri Jan AarogyaYojana (AB-PMJAY) is a paradigm shift from sectorial, segmented and fragmented approach of service delivery through various national and State schemes to a bigger, more comprehensive and better converged and need based service delivery of secondary and tertiary care.

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Full video explanation

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