Independent study on PMJAY scheme cost upsets government

The projection by researchers from the IEG, Delhi University, for 2019-2023, is worrying since they estimate the PMJAY alone could gobble up 75% to over 100% of the Centre’s annual health budget.

Published: 18th February 2019 03:06 AM  |   Last Updated: 18th February 2019 10:05 AM   |  A+A-

medicine, medical field, doctors

For representational purposes

Express News Service

NEW DELHI: When the Centre in September rolled out its ambitious health insurance scheme that promises to pay up to Rs 5 lakh for hospitalisation to 40% of India’s population, the premium it had in mind was Rs 1,100 per family, but an independent study put the figure at more than double, rattling the mandarins.

Tasked by the Finance Commission to assess future costs of the Pradhan Mantri Jan Aarogya Yojana (PMJAY), a group of economists found the premium cost to be over Rs 2,400 per family since the per capita hospitalisation rate is rapidly rising - putting a question mark over the scheme’s sustainability.

The projection by researchers from the Institute of Economic Growth (IEG), Delhi University, for 2019-2023, is worrying since they estimate the PMJAY alone could gobble up 75% to over 100% of the Centre’s annual health budget, creating a fund crisis for other major health initiatives.

The IEG economists made two separate presentations on their findings to the Finance Commission and senior bureaucrats from the Union Ministry of Health and Family Welfare in December and January.

To arrive at the cost, they considered multiple factors such as a number of target beneficiaries, hospitalisation rate and per capita hospitalisation expenditure, based on the National Sample Survey 2014 data.

In states with robust insurance schemes, hospitalisation rates are far higher than the national average of 4%.

This year, the Centre allocated just Rs 6,400 crore for the scheme, which is about 10 per cent of the total annual health budget of about Rs  62,000 crore. According to the study, under the current allocation, based on the current hospitalisation rate alone, only 30% of the target beneficiaries can be covered. The scheme is being implemented in states with a Centre-state ratio of 60:40.

When approached for comment, Union Health Secretary Preeti Sudan declined to respond but another senior official who was present at the presentation conceded that if the entire country “behaved like Kerala (which has a hospitalisation rate of 13%), the cost of the scheme would indeed be sky-high.”

He was, however, quick to add that the Centre at present is paying `16 crore per day for the scheme and the “current trends” do not support the IEG projections.

Indu Bhushan, CEO of the National Health Authority, which is implementing the programme, said that he was yet to “get the report officially”.

Finance Commissioner N K Singh was not available for comment but his office said that a “final report was still due”.

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