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The Pradhan Mantri Jan Arogya Yojana Abhiyan (PMJAY) is viewed differently by different people. To a potential beneficiary, it is an entitlement for hospital care. To a social scientist, it is an anti-poverty programme as well as a programme aimed at improving the health of the poor. To a politician, it is a populist programme that is aimed at garnering voters’ support in the forthcoming assembly/general elections. To a health planner, it is a significant step towards achieving Universal Health Coverage. To a systems specialist, it is a programme aimed at fixing the country’s health system.


On the face of it, PMJAY is a programme for supporting demand for hospital care by providing financial protection of Rs 5 lakh per household to almost 10.7 crore poor households against hospitalisation costs.

In reality, it is much more than that, as it is also aimed at developing the market, especially in areas where hospital care is almost non-existent or is in short supply.

In other words, PMJAY deals not only with making hospital care financially accessible for the poor, but also making such care available in closer proximity to where the beneficiaries reside.

To improve the hospital care infrastructure in rural areas—where nearly 76% of the total beneficiaries reside—the government has a two-pronged strategy: to strengthen public hospitals at district and sub-district levels, as well as to forge partnerships with the private sector to augment supply in the under-served areas.

For strengthening of public hospitals, the government has rightly prioritised those districts having a higher share of potential beneficiaries and lacking in hospital infrastructure. On forging partnerships with the private sector, the government is encouraging private providers to partake in this national mission.

In tier-1 and in most tier-2 cities, hospital care is reasonably well-developed. In these cities, private players can decide whether or not to join the scheme, given the rates being offered by the programme. Depending on their cost-structure and the target-market segment, some private hospitals will choose to stay out, while others may opt in, which is fine.


The real challenge is in getting the private sector to establish new hospitals in tier-3 cities and in rural areas. In these places, new hospitals need to be established, and the numbers are not in the hundreds, but in the thousands.

By the government’s own admission, the shortfall in hospital beds is around two-thirds of the number required for the scheme to operate at full scale.

However, for encouraging the private sector to set up new tertiary hospitals in tier-3 cities and rural areas, the government needs to reach a much better understanding with them, with a longer-term perspective.

The market mechanism is not a good enough guide for the private investor to enter the under-served areas. Why is this so?

The government-supported demand would be the prime mover of private investments in hospital care in these areas. Therefore, a return on private investment is critically dependent on the package rates that the government would pay.

It is true that private hospitals joining PMJAY would gain recognition that would help them tap the “residual” market that could be charged higher rates, but there is a lot of uncertainty around this. There are indications that the advantage of package rates would also be extended to the above-poverty line population over time.

Additionally, the government would likely need to extend other incentives by way of concessional loans, single-window clearance to comply with the various regulatory requirements and so forth.


Although the private sector has an important role to play for the success of this programme, the programme’s success is not to be measured by the success of the public-private partnership or by the extent of the financial protection it provides.

Undoubtedly, these are the key indicators of success. But its success is also to be measured by the extent to which the programme realises its full potential.

The programme has the potential to improve efficiencies in public hospitals, to encourage the use of low-cost technologies to make hospital care affordable, to carry out reforms in the upstream areas such as medical education and training, to narrow down geographical inequities in the distribution of health infrastructure through incentives and regulations and so on and so forth.

Harnessing these complementarities is essential for the realisation of the full potential of the programme.

Therefore, PMJAY has all the necessary ingredients needed for its success—a strong leadership support, good initial design, assured public funding, support from the states, and the needed momentum. Those engaged in the operationalisation of the programme also need to pay heed to realising its full potential from the health systems perspective.


It is also called as Pradhan mantri Jan arogya abhiyaan. The scheme will offer free medical insurance to the families with poor socio economic background. 

  1. It will cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries)
  2. Providing coverage upto 5 lakh rupees per family per year for secondary and tertiary care hospitalization.
  3. It will subsume the on-going centrally sponsored schemes – Rashtriya Swasthiya Bima Yojana and the Senior Citizen Health Insurance Scheme.
  4. It will have a defined benefit cover of Rs. 5 lakh per family per year.
  5. 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.
  6. It will be an entitlement based scheme with entitlement decided on the basis of deprivation criteria in the SECC database.

Socio economic caste census was to assess the population that is actually below the poverty line (BPL)

  1. The beneficiaries can avail benefits in both public and empanelled private facilities.
  2. To control costs, the payments for treatment will be done on package rate (to be defined by the Government in advance) basis.

One of the core principles of Ayushman Bharat – National Health Protection Mission is to co-operative federalism and flexibility to states.

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.

States would need to have State Health Agency (SHA) to implement the scheme.

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.

An escrow account is a account held by a third party during the process of a transaction between two parties. It helps in making the transactions more secure by keeping the payment in a escrow account which is only released when all the requirements are met.

In partnership with NITI aayog, a robust, modular, scalable and interoperable IT platform will be made operational which will entail a paperless, cashless transaction.

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