Free health insurance for senior citizens makes it to the Budget priorities checklist

New Delhi: The Union government is exploring a dozen different models to extend the benefits of the world's largest health insurance scheme to India's growing elderly population, according to two officials with knowledge of the development.

The move is in keeping with the ruling National Democratic Alliance's promise in the run-up to the general election to cover all people aged above 70 under the government's flagship scheme—the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY).

The government is likely to announce the increased coverage for India's elderly in the upcoming Union budget, the officials said on condition of anonymity.

“Different models are being studied by the government to implement AB PM-JAY for senior citizens 70 years of age and above," said one of them, adding that the government was working out the mechanics of how to extend the scheme.

The National Health Authority (NHA), which has been tasked with formulating the plan, is actively looking at two preferred models among the several being considered.

“Two models are being studied to take the initiative forward—all family members with senior citizens may get covered, or only senior citizens in a particular family will get the health coverage,” said the second official cited above.

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Accordingly, health benefit packages are being firmed up for geriatric treatment, with hospitals providing dedicated geriatric services to be onboarded for PM-JAY. Geriatric therapy is a medical specialty focused on the care of the elderly.

“The budget proposal has been submitted with a view to increase the beneficiary base of AB PM-JAY," said the second official. "It is likely that the government may mention the implementation of PM-JAY for eligible senior citizens during the Union budget. Government meetings are being done internally to explore the mechanism and how to start with it.”

Queries sent to the health ministry spokesperson remained unanswered.

Healthcare for the elderly

During the release of Bharatiya Janata Party's (BJP's) election manifesto, Prime Minister Narendra Modi had announced that all senior citizens above 70 years will be covered under PM-JAY scheme, across poor families, middle income groups and even economically well-to-do families.

“Extension of PM-JAY’s coverage to the elderly will help prevent families from exercising painful choices between needed healthcare for elderly family members and other essential household expenditures," said K. Srinath Reddy, former president of Public Health Foundation of India (PHFI).

“It will also enable elderly persons to be fit and functional, reduce their dependency, and make further economic and social contributions to society. This measure wilk promote inter-generational social harmony,” he added.

According to government’s population projection report 2011-2036, there are nearly 104 million elderly persons in India, of which 53 million are women and 51 million men.

Also read: Private hospitals pull back on Ayushman Bharat amid low state funding

With the new policy that is in the works, there may be a possibility that having a senior member in a family will be a criterion to be eligible for the scheme regardless of whether they are listed in socio-economic caste census 2011 (SECC 2011) database or not. The scheme originally picked beneficiaries from this database.

This may also give an opportunity to non-poor families or to benefit from the scheme. Another likely challenge that the government may face in implementing all families having senior citizens is “adverse selection”, which means all intended beneficiaries can immediately avail treatment under the scheme, even for pre-conditions, without any waiting period.

In the insurance industry, adverse selection refers to situations in which an insurance company extends insurance coverage to an applicant whose actual risk is substantially higher than the risk known by the insurance company.

Therefore, NHA is exploring ways and means to counter the challenge of adverse selection. So, the plan is to include healthy and unhealthy individuals and increase the risk pool to ensure that younger beneficiaries who are healthy might not avail themselves of the treatment under PM-JAY.

Health benefit packages are being looked into for geriatric treatment as per the need of the elderly population. Meanwhile, hospitals providing dedicated geriatric services will be taken on board to offer PM-JAY services. This includes both state-owned and private hospitals.

The scheme's utilization could also increase premiums, which may lead to higher financial outflow for the government.

“Universal health coverage for people over 70 is an attractive concept, but the actual delivery of healthcare will be logistically complex and has many hurdles to overcome,” said Dr Rajeev Jayadevan, a leading public health expert, adding that by default, the group has a higher burden of disease and will incur greater medical expenses.

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“The existing system, which doesn’t include seniors, is already plagued by several limitations such as delayed payments and reimbursement packages that are too low for private hospitals to cover even the basic cost incurred. Besides, there are reports of misuse of the system by people without eligibility, siphoning off the funds. These irregularities have to be ironed out before it becomes a viable solution,” Jayadevan said. 

He added that the public sector is already providing free care to seniors, and that could be strengthened from a manpower and infrastructure standpoint first. In addition, the small and medium-sized hospitals that serve the rural sector in particular will need strengthening to reduce the need for frail elderly individuals to travel to faraway hospitals. 

What is AB PM-JAY?

Launched in September 2018, the PM-JAY provides free heath coverage of up to ₹5 lakh per family per year for secondary and tertiary care hospitalization, subject to certain criteria.

The beneficiaries of PM-JAY were originally culled from the SECC database on the basis of select deprivation and occupational criteria in rural and urban areas, respectively.

Subsequently, as the scheme matured, state health agencies were provided with the flexibility to extend the scheme to other sections of society.

A majority of states and Union territories that have extended PM-JAY beyond SECC households, have done so using the National Food Security Act (NFSA) database. The majority of AB PM-JAY beneficiaries from SECC 2011 are also eligible for benefits under NFSA.

NHA is working on integrating the SECC 2011 beneficiary database with NFSA, which will enable beneficiaries to seek information regarding their entitlement under the AB PM-JAY using their ration card number.

NHA is also working on a proposal to use fair price shops or ration shops for providing information related to the scheme and entitlement under the scheme to eligible beneficiaries.

This will provide an additional avenue to beneficiaries along with the existing Common Service Center, UTI-ITSL etc., for card creation, making the beneficiary identification process convenient.

Also read: Ayushman Bharat cap may double to ₹10 lakh

This year, in the interim budget announced on 1 February, the allocation for the scheme has hiked from ₹6,800 crore in FY24 to ₹7,500 crore for FY25. The funds allocated for the scheme for the financial year 2021-22 was ₹6,400 crore.

The scheme has recorded significant utilisation in the past two years. Till date, 68.6 million authorised hospital admissions have taken place while 347 million beneficiaries have been empowered with Ayushman Card.

Increasing the beneficiary base under the scheme has always prominently figured in discussions in policy circles. In the latest, accredited social health activists (Asha) and anganwadi workers were brought under the scheme since this February.

Asha workers and anganwadi workers (AWWs) are the primary field-level frontline healthcare workers who come into direct contact with the population to create awareness on healthcare issues and mobilise communities.

Mint earlier reported about Asha and anganwadi workers collecting data on individuals above 70 years of age for this purpose.

With inputs from Gireesh Chandra Prasad