Extending Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) to 70 and above

The Indian government’s recent decision to extend the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) with a ₹5 lakh top-up for individuals aged 70 and above is a commendable step towards providing financial support to the elderly. While this move could benefit approximately 4.5 crore families, it may not be enough to address the broader healthcare challenges faced by older adults in India. In this article, we explore the limitations of this extension in protecting households from catastrophic healthcare expenditures (CHE) and discuss the need for more comprehensive healthcare reforms.

India Ageing Population: The Healthcare Crisis

India is not only the most populous country but also one of the fastest-aging nations. Although the average life expectancy is around 70 years, a healthy life expectancy is only 63.5 years. Surveys highlight a growing burden of non-communicable diseases, disabilities, and a bed-ridden older population, particularly in the 70-80 and 80+ age groups. Unfortunately, healthcare coverage remains a significant challenge, as only 1 in 5 persons over 60 years has health insurance. This, coupled with the fact that 92% of the workforce is engaged in informal labor, leaves many elderly individuals vulnerable to the financial strain of healthcare.

Recent evidence shows that nearly half of Indian households seeking hospital or outpatient care encounter CHE, leading to impoverishment for 15% of these households. Out-of-pocket (OOP) healthcare spending for inpatient care is twice as high for the elderly compared to the younger population. In this context, extending the AB-PMJAY to older adults is a critical intervention, but it raises the question: Is this move sufficient to ensure healthy aging?

Budgetary Shortfalls in the Scheme Extension

The government has allocated an additional ₹3,437 crore to extend AB-PMJAY to the elderly. However, preliminary estimates at the national and state levels suggest that this budget is inadequate to cover the health needs of the intended beneficiaries. Based on population projections from the Office of the Registrar General of India, 5.6 crore households are eligible for the scheme. After adjusting for hospitalization rates (derived from the Longitudinal Ageing Survey of India –LASI) and excluding those covered by employer-based public health insurance schemes, the expected users account for 43.5 lakh families annually. With an average hospitalization cost of ₹32,804 per year (as per LASI), the scheme's implementation cost would total ₹14,282 crore. This amount is over four times the current allocation, highlighting a significant budgetary gap.

Why Insurance Extension Alone is Insufficient

While extending insurance is an important step, it cannot replace the need for robust public healthcare infrastructure. The disease profile of the hospitalized elderly predominantly includes conditions like diabetes, cardiovascular diseases, respiratory ailments, cancer, and vector-borne diseases. Most of these conditions require long-term care and cannot be resolved with a single episode of treatment. However, the AB-PMJAY, similar to many private insurance schemes, covers only secondary and tertiary care, leaving out outpatient services—which account for 46% of total health expenditure. By excluding outpatient care, the scheme fails to support preventive healthcare, a critical element for healthy ageing. Additionally, it does not cater to palliative care, which is essential for the 80+ age group or those bedridden with chronic conditions. With an increasing burden of non-communicable diseases requiring multiple consultations and continuous care, improving primary and secondary healthcare is vital to reduce the pressure on tertiary (curative) healthcare facilities.

Ayushman Bharat – PMJAY (Pradhan Mantri Jan Arogya Yojana)

About: Launched in 2018, Ayushman Bharat – PMJAY is the world’s largest government-funded health insurance scheme. Provides up to ₹5 lakh per family for secondary and tertiary care, including surgeries, medical treatments, medicines, and diagnostics. Beneficiaries: The scheme is entitlement-based, targeting families identified through the latest Socio-Economic Caste Census (SECC) data. States/UTs can include families with similar socio-economic profiles not covered by SECC. Funding: 60:40 for most states, 90:10 for Northeast states, Jammu Kashmir, Himachal Pradesh, and Uttarakhand. 100% funding by the Centre for Union Territories without legislatures. Nodal Agency: The National Health Authority (NHA) oversees implementation, in partnership with State Health Agencies (SHA) at the state level.

The Need for Holistic Reforms in Healthcare

Extending AB-PMJAY alone will not suffice to meet India’s public health goals without a significant increase in public health spending. Public healthcare investment has stagnated at around 0.9-1.35% of GDP for decades. The expansion of insurance coverage must go hand-in-hand with an expansion of public health infrastructure, increased hospital coverage, enhanced healthcare human resources, and improved medicine supply. India’s healthcare system requires more holistic reforms that integrate primary and tertiary care, especially for the elderly, who often need continuous and long-term medical attention. Countries with successful healthcare models, such as Canada, European nations, and Australia, treat health as a public service and healthcare as a human capital investment. In contrast, India’s reliance on an insurance-based model risks inflating overall healthcare costs, much like the U.S. system, which is less effective.

AB-PMJAY Current Limitations and the Path Forward

The extended AB-PMJAY is a vital intervention for avoiding impoverishment caused by catastrophic health spending. However, its current form is inadequate for ensuring the overall well-being of the aging population. India’s demographic transition will not only alter the age structure and disease profile but will also impact labor markets, migration patterns, and social security policies in states with rapidly aging populations. Promoting healthy and active aging is essential to harness the “silver dividend,” referring to the direct and indirect contributions of the older population to the economy and society. Achieving this requires a shift from focusing solely on insurance schemes to adopting a comprehensive strategy that addresses preventive care, long-term management of chronic illnesses, and increased public healthcare spending.

Conclusion

While the extension of the AB-PMJAY to the elderly is a positive step, it cannot stand alone as a solution to India’s healthcare challenges. The government must address the budgetary gaps and focus on a more integrated approach, combining insurance coverage with the expansion of public health infrastructure and preventive care services. Only through such holistic reforms can India ensure the health and well-being of its aging population, providing them with the support they need for healthy and dignified lives.

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