Context: Recently, NITI Aayog has released a comprehensive report titled Health Insurance for India’s Missing Middle.

• NITI Aayog highlighted that at least 30 per cent of the population, or 40 crore individuals – called the ‘missing middle’ – are devoid of any financial protection for health. 

Background

• The Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) launched in September 2018, and State Government extension schemes, provide comprehensive hospitalization cover to the bottom 50% of the population – around 70 crore individuals. 
• Around 20% of the population– 25 crore individuals –are covered through social health insurance, and private voluntary health insurance. 
• The remaining 30% of the population is devoid of health insurance; the actual uncovered population is higher due to existing coverage gaps in PMJAY and overlap between schemes.

NITI Aayog recommendations

• The report has recommended three models for increasing the health insurance coverage in the country.

The first model focuses on increasing consumer awareness of health insurance.

The second model is about “developing a modified, standardized health insurance product” like ‘Arogya Sanjeevani’, a standardised health insurance product launched by the Insurance Regulatory Development Authority of India (IRDAI) in April 2020.

• A “slightly modified version” of the standardised Aarogya Sanjeevani insurance product will help increase the update amongst the ‘missing middle’, the report cited.

Explaining the third model, the report stated that expands government subsidized health insurance through the PMJAY scheme to a wider set of beneficiaries. 

• This model can be utilized for segments of the missing middle which remain uncovered, due to limited ability to pay for the voluntary contributory models outlined above. 

This is the only model out of three proposed which has fiscal implications.

• Though this model assures coverage of the poorer segments on the missing middle population, premature expansion of PMJAY can overburden the scheme.

Additional Facts
Ayushman Bharat
Ayushman Bharat is a two pronged approach towards Universal Healthcare. 
Health and Wellness centres (HWC)

• They will provide comprehensive Primary Health Care, free essential drugs and follow up of hospitalization cases. 
• They will also conduct yoga sessions to promote wellness and have a much wider range of free drugs and diagnostics. 
• The HWCs serve as the awareness, screening and referral link between patients and PMJAY. 

Pradhan Mantri Jan Arogya Yojana (PMJAY)

• It provides a health protection cover of rupees 5 lakh per family per year to the bottom 40% of poor and vulnerable population for hospitalization expenses towards the treatment of serious illnesses. 
• Ayushman Bharat aims to offer financial risk protection to the beneficiary families through a system of demand led Healthcare initiative that meets their immediate hospitalization needs in a cashless manner. 

Key features of Pradhan Mantri Jan Arogya Yojana 

• It provides cashless cover upto rupees 5 lakh to each eligible family per annum for listed secondary and tertiary care conditions. 
• The cover under the scheme includes all the expenses including non-intensive and Intensive Care Services, medicine and Medical consumables and post-hospitalization follow up care upto 15 days. 
• There is no cap on family size and age of members. 
• All pre-existing diseases are covered from the very first day unlike private insurance schemes. 
• Benefits covered under PM-JAY are portable across the country and any eligible beneficiary can visit any empanelled Hospital across the country. 
• The stated aims of the insurance portion of the programme include to cushion poor families against the financial shock that a health emergency can trigger, as well as to bring the private sector to small cities. 

Support Mechanisms

• A National Health Authority (NHA) has been mandated to roll out and coordinate the programme.
• A cadre of frontline health service professionals called Pradhan Mantri Arogya Mitras (PMAMs) are trained to facilitate provision of treatment to beneficiaries at hospitals. 
• The scheme is supported by a strong IT backbone that facilitates the identification of beneficiaries, records treatments, processes claims, receives feedback, and addresses grievances. 
• A live dashboard helps in monitoring and improving performance, based on real-time data and regular analysis. This platform also helps states to compare their performance. 
• A strong and sophisticated fraud prevention, detection and control system at the national and state level has proved to be critical for PM-JAY to ensure that frauds are largely prevented. If attempted, they are quickly detected and strong action is taken.

Implementation Model

Considering the fact that states are at different levels of preparedness and have varying capacities the PM-JAY provides them with the flexibility to choose their implementation model which can be through Insurance, Trust or Mix mode. 

• Insurance Mode: The state government appoints an insurer at a defined rate for taking over the financial risk of the beneficiaries. 
• Trust Mode: The state government creates an agency which pays the claims of the hospitals as per actual utilisation. The risk of health protection lies with the state. 
• Mixed Mode: The state uses a combination of insurance and trust modes generally where low-cost common procedure (secondary care) is managed by the insurer and high cost specialised procedures managed by the state trust.

Funds of the scheme

• PMJAY, being a centrally sponsored scheme is fully funded from the consolidated fund of India. 
• The expenditure is shared between Central Government and state government as per the sharing instructions issued by the Ministry of Finance. 
• PMJAY embodies a policy shift where the government now assumes the role of a purchaser of services from that of the provider and also is surely a giant Leap forward towards the achievement of the sustainable development goals specially SDG 3.8 achieving Universal health coverage.