What is Ayushman Bharat Health Insurance?

India's economy has been one of the fastest-growing in the world for quite some time. Yet, it remains a Lower Middle-Income Country due to several factors, one of which is poor healthcare for people with low incomes. Despite impressive strides in alleviating poverty, more than 15 crore people in India still live below the poverty line.

With a demographic bounty, where around 67% of the population is of working age, India has the potential for sustained economic growth. However, a triple threat of diseases challenges this: communicable diseases, non-communicable diseases, and injuries.

The Indian healthcare system faces other significant challenges, too.

The private sector, which caters to more than 50% of healthcare needs, is often concentrated in urban areas. This leaves many in rural and developing areas underserved.

At the same time, public sector hospitals are overburdened and underfunded with limited resources and personnel. For several years, government health expenditure remained low, leading to high out-of-pocket expenses for the common man. This has driven thousands into poverty each year.

To address these issues, the Government of India launched the Ayushman Bharat scheme – an ambitious project to bridge the healthcare gap between the rich and the poor.

What is Ayushman Bharat Health Insurance?

In 2018, the Government of India launched an affordable health insurance scheme for the bottom 40% of the population. This quickly became the flagship scheme to ensure healthcare services reach the poorest and most vulnerable people in society.

The scheme provides a ₹5 lakh cover amount without the beneficiary paying any premiums. It targets poor and vulnerable families and ensures they receive cashless and paperless treatment at public and certain private hospitals across the nation.

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Since its start, the Ayushman Bharat scheme has successfully contributed to nearly 6.2 crore hospital admissions, and as of January 2024, they created a whopping 30 crore Ayushman cards!

In hopes of expanding their reach to a population of 100 crores, the government is currently discussing increasing the cover to ₹10 lakhs! This way, critical diseases like cancer and various critical transplants will no longer burn a hole in your pocket.

As great as this alone sounds, health insurance is not the only benefit that this scheme provides. It is part of the Government’s larger plan to make superior healthcare accessible to those who need it the most.

What is the Ayushman Bharat Yojana Scheme?

The Ayushman Bharat Yojana provides comprehensive health insurance coverage to improve the country's overall health infrastructure. To achieve this, the National Health Authority (NHA), the organization behind this scheme, identified two main solutions. These include upgrading Sub-centres and Primary Health Centres to Health and Wellness Centres (HWCs) and introducing the Pradhan Mantri Jan Arogya Yojana (PM-JAY).

Let’s explore them in detail now.

• Health and Wellness Centres (HWCs)

Under this, the government converted more than 1.5 lakh crippling primary health centres (PHCs) across the nation into full-fledged Health and Wellness Centres that provide primary healthcare services. These centres focus on preventive, promotive, and rehabilitative services, addressing the healthcare needs of individuals at the grassroots level.

• Pradhan Mantri Jan Arogya Yojana (PM-JAY)

PM-JAY provides cashless hospitalisation for the poor. This reduces their financial strain and encourages private sector growth in underserved areas. Integrating and subsuming previous small schemes, PM-JAY offers health insurance to 12 crore poor families, targeting the bottom end of the population. Fully funded by the public taxpayers, PM-JAY aims to reduce catastrophic health expenses and improve access to quality healthcare for the underprivileged.

Here are some features of the PM-JAY Health Insurance Policy:

• Secondary & tertiary medical care from public & private hospitals across India to over 12 crore families living below the poverty line.
• Covers 3 days of pre-hospitalisation & 15 days of post-hospitalisation expenses.
• No limit on family size, age or gender.
• Covers all pre-existing diseases with no waiting period.
• Benefits are accessible and portable across India.
• It provides cashless treatment and covers more than 1,900 procedures, as well as ICU charges, doctor’s fees, prescription medicines, and other related expenses.

Should you opt for the Ayushman Bharat Health Insurance Scheme?

The Ayushman Bharat Health Insurance Scheme can be a lifesaver for families who cannot afford standard health insurance policies. It provides extensive coverage and access to necessary healthcare services without the burden of high medical costs. However, like any other financial instrument, it's essential to consider its advantages and disadvantages before making a decision.

What are the advantages of the Ayushman Bharat Health Insurance Scheme?

Ayushman Bharat Health Insurance Scheme offers numerous benefits. Some of them are:

• Policyholders don’t need to pay premiums. The State and Central Governments pay for them in a 60:40 ratio.
• Provides cashless access to premium healthcare services at approved hospitals up to ₹5 lakhs per policy year.
• There is no restriction on the family size, age of the policyholder, or gender.
• There is no waiting period for pre-existing ailments. Treatments for such diseases are covered from Day 1.
• This scheme covers more than 1300 procedures. The funding for these procedures includes treatment-related costs, doctor’s fees, OT and ICU charges, Medicines, Room rent, medical consumables, and more.
• Considering that this scheme is an initiative from the Government of India, financial aid can be accessed throughout the country. With this portable health insurance coverage, beneficiaries can visit any enlisted/network hospital (public or private) in India and enjoy cashless and paperless treatment.
• A substantial reduction in the out-of-pocket expenses for the deprived section of society while meeting their medical requirements.
• Daycare treatment expenses are also covered under this Government-rolled insurance plan.

What are the disadvantages of the Ayushman Bharat Health Insurance Scheme?

Despite its benefits, the Ayushman Bharat scheme has some drawbacks:

• The coverage amount might fall short when it comes to major treatment procedures or for those with chronic ailments requiring multiple hospitalizations across a year.
• Only 3 days of pre-hospitalization and 15 days of post-hospitalization costs are covered under the Ayushman Bharat Yojana Scheme.
• The scheme is ONLY available as a family floater health insurance policy.
• OPD expenses are not covered under the Ayushman Bharat policy.
• No tax benefits are available under Section 80D.
• Limited to public and empanelled private hospitals, which may not cover all healthcare facilities.
• Potential for long waiting times and overcrowded facilities due to high demand.
• Quality of care may vary across different states

Who are the people excluded under the Ayushman Bharat Yojana Scheme?

While the Ayushman Bharat (PM-JAY) Scheme successfully brought financial coverage for medical purposes for a major section of the financially deprived section, some people and sections of the population are excluded. Here is the list of families that cannot avail of this scheme:

• If you own a two, three or four-wheeler or a motorised fishing boat
• If you own mechanised farming equipment
• If you have Kisan cards with a credit limit of ₹ 50k
• If you employed by the government
• If you work in government-managed non-agricultural enterprises
• If you earn a monthly income above ₹ 10k
• Households with refrigerators and landlines
• Households with a decent, well-built house
• If you own 5 acres or more of agricultural land

What are the eligibility criteria for the Ayushman Bharat Health Insurance Scheme?

The eligibility criteria for the Ayushman Bharat Health Insurance Scheme are determined based on the 2011 Socio-Economic and Caste Census (SECC) data. They differ according to your PIN code and divide people into two buckets—urban and rural. The criteria are slightly different for the two. Let’s take a look at it now.

• Urban areas

In urban areas, eligibility for the Ayushman Bharat (PM-JAY) Scheme is based on the beneficiary’s occupation. Here is the list as per the National Health Authority:

• Ragpicker
• Beggar
• Domestic worker
• Street vendor/ Cobbler/hawker / other service provider working on streets
• Construction worker/ Plumber/ Mason/ Labour/ Painter/ Welder/ Security guard/ Coolie and other head-load worker
• Sweeper/ Sanitation worker/ Mali
• Home-based worker/ Artisan/ Handicrafts worker/ Tailor
• Transport worker/ Driver/ Conductor/ Helper to drivers and conductors/ Cart puller/ Rickshaw puller
• Shop worker/ Assistant/ Peon in small establishment/ Helper/Delivery Assistant / Attendant/ Waiter
• Electrician/ Mechanic/ Assembler/ Repair worker
• Washer-man/ Chowkidar
• Rural areas

In rural areas, eligibility for the Ayushman Bharat (PM-JAY) Scheme is based on other factors, too. You will be eligible for this scheme if you fall into any one of these categories. Here is the list as per the National Health Authority:

• Only one room with kucha walls and kucha roof
• No adult member between ages 16 to 59
• Households with no adult male member between ages 16 to 59
• Disabled member and no able-bodied adult member
• SC/ST households
• Landless households that derive a major part of their income from manual, casual labour

But what if you are not eligible for this scheme?

Well, in that case, another option would be for you to purchase a good, standard health insurance policy. Let’s take a look at some of the differences between the two.

Standard health insurance policies vs Ayushman Bharat Yojana Scheme

Here is a quick comparison between standard health insurance policies issued by private insurers and the PM-JAY Ayushman Bharat Scheme:

What should you opt for - standard health insurance policies or the Ayushman Bharat Health Insurance Scheme?

Choosing between a standard health insurance policy and the Ayushman Bharat Health Insurance Scheme solely depends on your financial situation and healthcare needs. If you belong to the economically weaker section, Ayushman Bharat (PM-JAY) provides essential coverage without any financial burden on you. However, if you can afford a standard health insurance policy, it offers broader coverage and access to a wider network of hospitals.

Here are some of the top health insurance policies available in 2024.

What are the best health insurance plans in India for 2024?

While the Ayushman Bharat Scheme provides essential coverage, standard health insurance policies provided by private insurers often offer additional benefits, customisation, and more comprehensive coverage.

It is always recommended that you purchase a good health insurance policy from a good health insurer. Here are some top standard health insurance policies to consider:

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Conclusion

The Ayushman Bharat Health Insurance Scheme is a step in the right direction towards universal health coverage in India, offering essential protection to society's most vulnerable sections. Here are some other government health insurance policies that cater to the less privileged. It's also important to evaluate your specific healthcare needs and financial situation when choosing any health insurance policy. For personalised, spam-free insurance advice, consider booking a call with Ditto Insurance’s IRDAI-certified experts to find the best plan for your requirements.