Ayushman Bharat Health Insurance Scheme : Ensuring profits of big monopoly corporates in the health and insurance sector

Prime Minister Narendra Modi formally launched the Ayushman Bharat-National Health Protection Scheme (AB-NHPS) from Jharkhand on 23rd September.

Ayushman Bharat is being promoted as the world’s largest government funded health care program. The first phase of this program will be implemented from 2018-2022. The main initiatives under this scheme are the setting up of Health and Wellness Centers all over the country and the National Health Insurance Scheme, now named the Pradhan Mantri Jan Arogya Yojana (PMJAY). The National Health Agency (NHA) will be the government body in charge of implementing the entire Ayushman Bharat Scheme.

The Health and Wellness Centres are being promoted as a means of ‘bringing health care closer to the people’. These will essentially be ‘upgraded’ versions of the sub-centres that had been set up as part of the government health services, to mainly provide maternal and child health services. It is now being claimed that under the Ayushman Bharat Scheme the infrastructure will be expanded in these Wellness Centres and they will be equipped with all the needed facilities and adequate number of health workers to provide comprehensive health care, including maternal and child health services as well as free essential drugs and diagnostic services. However, the budgetary allocation for this is only Rs. 1200 crore, which amounts to a paltry investment of Rs 80,000 per Health and Wellness Center.

Non eligibility criteria for AB-NHPS

Families that satisifed the following criteria at the time of the SECC 2011 will not be eligible for benefits under AB-NHPS:

  1. A family which had one member in government service
  2. A family whose non-agricultural enterprise was registered with the government
  3. A family which owned more than 2.5 acres of irrigated land with one irrigation equipment.
  4. A family which owned 5 acres or more of irrigated land for two or more crop season.
  5. A family which owned at least 7.5 acres of land or more with at least one irrigation equipment
  6. A family with a two wheeler or three wheeler tractor
  7. A family which paid professional tax
  8. A family which had pucca house with walls and roof, of three or more rooms
  9. A family which had a refrigerator and landline telephone
  10. A family which had a two-wheeler, three-wheeler or four-wheeler vehicle or fishing boat
  11. A family which had a credit card with a credit limit of more than Rs. 50,000
  12. A family with a member earning more than Rs. 10,000 per month
  13. A family which filed income tax in 2011

The PMJAY promises to provide an insurance coverage of Rs 5 lakh per family annually, for 10 crore poor families (i.e. nearly 50 crore people) in rural and urban India. The scheme will cover secondary and tertiary care hospitalization but will not cover primary health services and out-patient services. About 8700 public and private hospitals are reported to have been empanelled so far. The budgetary allocation for the scheme for 2018-19 is Rs.2000 crore - the estimated annual insurance premium amount to be borne by the Central government (60%) and State government (40%).

The PMJAY will be an entitlement scheme. This means that certain eligibility criteria will determine whether a family is entitled to be a beneficiary of the scheme. In rural areas, eligibility will be based on the 5 deprivation categories in the Socio-Economic Caste Census (SECC) 2011 database. For the urban areas, 11 occupational criteria will determine entitlement. The official website of the AB-NHPS lists the criteria for families that will not be eligible for insurance coverage under this scheme.

Experience of a health insurance scheme

Rajasthan’s Bhamashah Swasthya Yojana was launched in December 2015. The claims ratio jumped from 90% in the first year to 170% in the second year. This surge in claims led the insurance company to more than treble its premiums from Rs 370 per family per year to Rs 1,263, when the contract with the state government was renewed after the first phase of the two years ended. The New India Assurance Company which bagged the contract had sought to de-empanel some of the hospitals for making fraudulent claims. However, the de-empanelment was cancelled by the Rajasthan government. Such contradictions are an inevitable outcome of a scheme which is actually meant to maximize the profits of both the private hospitals and the insurance companies in the name of providing health services to the public.

These criteria make it very clear that the scheme is far from being universal and that a vast section of poor working people in both rural and urban India will not be covered under this scheme (See Box: Non eligibility criteria for AB-NHPS). For example, a family with one member earning Rs. 10,000 or living in a pucca house or possessing a two wheeler will not be eligible for this scheme! By laying down various criteria for eligibility under this scheme, the door has been kept open for massive corruption in determining which family will be eligible and which will not be.

The government is trumpeting this scheme as a big gift to the people, as something that will provide health care to the poorest sections of the population. But there are several facts that make it clear that the promise of universal health care under Ayushman Bharat is a fraud.

Only 11 per cent of the SCs are at present functioning as per norms of the Indian Public Health Standards (IPHS). The existing SCs are severely lacking in infrastructure, medical supplies and services, doctors, nurses, etc. The health workers working in the rural areas are paid a pittance and burdened with a host of other responsibilities, with no rights or job security. The existing Primary Health Centres (PHCs) which are the second tier of health services suffer from similar chronic inadequacies. Unless these basic issues of working conditions of the health workers and providing adequate infrastructure and supplies are addressed, the claims of “bringing health care closer to the people” ring hollow. The proposed outlay of Rs.1200 crore for the Health and Wellness Centres is so paltry that it cannot address these basic requirements.

The government claims that with this National Health Insurance cover, the poorest of people will be able to access secondary and tertiary health care in both government hospitals as well as private hospitals, which they are otherwise unable to afford. If the government is really interested in ensuring good health care services to the poor, it should invest in public hospitals in rural and urban areas where the poor can access quality medical treatment free of cost or at affordable rates. Instead of doing so, it is promoting the AB-NHPS, which will essentially guarantee a growing market and higher profits for the private hospitals and the insurance companies. Primary health services and out-patient services will not be covered under this scheme as these will not add to the profits of the private hospitals. This is the experience of the existing health insurance schemes running in several states (see Box – Experience of a health insurance scheme).

The Indian state has taken no serious steps to deal with the terrible conditions of public health care. The public health care system that was set up in the 60s and 70s, consisting of public hospitals, community health centres, primary health centres and sub-centres in every district, town and village, was created by investing public funds, i.e. the wealth produced by the working people. Its declared aim was to make basic health care services available free of cost for all members of society. This public health care system has been deliberately neglected, deprived of funds and ruined by successive governments of the ruling capitalist class.

On the other hand, the private health care industry has been allowed to flourish. Some of the biggest monopolies in the private health industry are to be found operating hospital chains across the country. These hospitals fleece the patients without providing proper medical services and with no accountability whatsoever. The state actively defends the interests of these big corporates.

The demand for a universal health care system run by the state, that provides access to good, affordable medical services for all, as a right, has been a crying demand of our people. By announcing the Ayushman Bharat Healthcare Scheme, the government is pretending to address this urgent demand. But it is merely fooling the people.


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Ayushman Bharat    health insurance    profits    big monopoly    Oct 16-31 2018    Political-Economy    Privatisation    Rights     2018   


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