Prime Minister Narendra Modi is set to launch the ambitious Pradhan Mantri Jan Aarogya Yojana in Ranchi on Sunday. But ahead of the grand rollout, doubts remain about both the idea and the implementation of this large-scale health insurance programme and there are several loose ends that the government needs to tie up.

The Pradhan Mantri Jan Aarogya Yojana is the rebranded National Health Protection Mission, which in turn was announced in the Union Budget this year under the larger Ayushman Bharat programme. The broader health scheme includes plans to open 1.5 lakh Health and Wellness Centres that will essentially be upgraded versions of existing health sub-centres, which are the first point of contact in the public healthcare system in India, located in the country’s remotest areas. The second dimension of Ayushman Bharat is the Pradhan Mantri Jan Aarogya Yojana, a health insurance scheme that assures a cover of Rs 5 lakh per year to India’s poorest families (roughly 40% of its population). It plans to cover more than 1,300 medical treatments and procedures.

Wheels in motion

Since the announcement in February, the government has pulled out all stops to get the insurance programme off the ground. Thirty states and union territories have signed memorandums of understanding with the Centre to join the Pradhan Mantri Jan Aarogya Yojana. Officials at government think-tank Niti Aayog and the National Health Agency, which is the implementing authority for the scheme, say that 8,000 hospitals have offered to join the network of health facilities to be empanelled to provide treatment and services under the scheme. More than 6,000 people have been appointed as “Aarogya Mitras” at hospitals to guide beneficiaries on their entitlements under the scheme. The government has also set up a website and helplines for beneficiaries, while hospitals have been directed to set up information kiosks.

The first claims under Pradhan Mantri Jan Aarogya Yojana have already been disbursed. The family of a girl who was born on August 15 in Haryana – the day that Modi announced the rebranded scheme in his Independence Day speech – became the first beneficiary earlier this month. The project had been launched on pilot basis in a few Haryana hospitals. The government hospital where the mother had her C-section was given Rs 9,000, the rate for deliveries under the scheme. Notably, while government hospitals earlier had to provide free deliveries to backward families, under this scheme, they are entitled to reimbursements. Then, in Mewat, a government hospital is set to be reimbursed for its first claim under the Pradhan Mantri Jan Aarogya Yojana, for a woman who was treated for a bacterial skin infection, the Indian Express reported.

Despite this progress, not all systems seem to be in place. For one, the programme has not yet specified standard operating procedures for doctors or the various treatments, sources told Business Standard.

The Indian Express report also highlighted several teething problems in Mewat, including those to do with verification of beneficiaries. For instance, many below poverty line families have been deemed ineligible for the scheme if they owned refrigerators or two-wheelers. In some cases, names of village sarpanches have made it to the list while others “living in worse conditions” have been left out, the report said. The Socio Economic Caste Census, 2011, forms the basis of enrollment for the exercise. Families that were listed as deprived under the census are eligible under the scheme. As a result, in some cases, those who were excluded from the census have also been left out from the Pradhan Mantri Jan Aarogya Yojana, even if they meet other criteria, the publication said.

Not all on board

Tamil Nadu was the 30th state to join the Pradhan Mantri Jan Aarogya Yojana when it signed an MoU with the Centre earlier this month. The states that have not signed up yet include Delhi, Odisha and Kerala.

In August, Delhi’s Aam Aadmi Party government said it would not join the scheme as it would not cover enough people. At the time, the party spoke of plans to launch its own health insurance programme. Later in the month, the Delhi government indicated its willingness to join the scheme but asked for the name to be changed to Mantri Aam Aadmi Swasthya Bima Yojana - Ayushman Bharat in the national capital. Nothing has come of this yet.

In Odisha, Chief Minister Naveen Patnaik on Independence Day launched his own state health insurance scheme, the Biju Swasthya Kalyan Yojana, which also offers Rs 5 lakh insurance cover per family per annum and promises to cover 70 lakh families, or 70% of the state’s population.

Not fixing what’s broken

Concerns also remain about the implementation of a scheme of this scale. Kerala Finance Minister Thomas Isaac has criticised the Pradhan Mantri Jan Aarogya Yojana, saying it risks having the same fate as the existing Rashtriya Swasthya Bima Yojana, which has been plagued by poor implementation. The Rashtriya Swasthya Bima Yojana, launched in 2008 under the Congress-led government, has a much lower cover at Rs 30,000 per family a year, but has managed to enrol only 3.6 crore of the targetted 25 crore families since its launch.

Another state-level health insurance programme, on which the Pradhan Mantri Jan Aarogya Yojana has been modelled, was also recently dogged by implementation hurdles. Public sector insurance company New India Assurance has pulled out of Rajasthan’s Bhamashah programme, claiming regular breach of contract leading to fraud and tall insurance claims, according to the Financial Express. The insurance company said that the incurred claims ratio, or the ratio of insurance claims to the premium charged, was 90% in the first year of the scheme in 2015-‘16 but rose to 176% in 2016-‘17. This would make it unsustainable for the insurance company to make payouts. The company said it had never been given detailed lists of the beneficiaries and cited problems with verification of beneficiaries.

There are other challenges too. Writing for Mint, Sudipto Mundle, Emeritus Professor at the National Institute of Public Finance and Policy and former Finance Commission Member, pointed out that the financial cost of the programme is still unknown since there is “no database to yield a probability distribution of the expected number of different health episodes requiring different treatments at varying costs”.

Moreover, Mundle said, health insurance programmes have often suffered coverage erosion. As costs escalate, the payouts are reduced through co-payments and coverage caps, increasing out of pocket expenses, he explained. Private providers who have been empanelled under the scheme may also push high-cost treatments not covered by the insurance scheme to keep their profits intact.

He also points out that despite this scheme’s vast scope, there is still no protection for the vast middle section of the country’s population – those members of India’s predominantly unorganised workforce who are still economically backward but not in the poorest 40%.