India’s flagship public health insurance program, Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (PM-JAY), is facing significant challenges. The program, launched in 2018, promises to cover hospital expenses up to ₹5 lakh (around $5,725) per family, but it has run into problems over non-payment to private hospitals. In Haryana, 650 private hospitals have suspended services to PM-JAY patients due to ₹490 crore ($59 million) in pending reimbursements, which date back six to nine months.
This has cut off up to 18 million low-income residents from private-sector surgeries, dialysis, cancer care, and other critical treatments. Patients are being forced to seek treatment at smaller facilities with limited services or borrow money to pay for care. The suspension has also led to a surge in patient load at public hospitals, resulting in longer wait times and overstretched staff.
The issue is not limited to Haryana, as other states like Jammu and Kashmir are facing similar problems. The region has fewer than 130 empanelled private hospitals, and patients often have to travel hundreds of kilometers for treatment. Delayed claim settlements and restrictive empanelment rules have left many patients without access to care.
Health economists say that the public-private partnership model in healthcare is fragile and that the government’s purchasing power is undermined when reimbursements are delayed. The Swiss Re Institute has warned that India’s heavy reliance on out-of-pocket payments risks reversing poverty reduction gains, with the health protection gap estimated to reach $200 billion by 2033.
The Indian government has promised to clear dues and review package rates, but private hospitals remain skeptical. The National Health Policy aims to reduce catastrophic health expenditure to 25% of households by 2025, but recent studies suggest that this goal may be out of reach. The pooled incidence of catastrophic health expenditure stands at 30% of Indian households, and inpatient care accounts for 11% of monthly household consumption.
The situation highlights the need for structural fixes to schemes like PM-JAY to ensure that they can deliver universal health coverage. The government needs to address the issues of delayed reimbursements, under-enrolment of private providers, and allegations of fraud to make the program effective. Until then, patients like Sunita’s family will continue to suffer, and the goal of universal health coverage will remain elusive.