There is no denying the elegance of the idea. Ayushman Bharat, the Union government’s flagship healthcare scheme, was conceived with the noblest of intentions — to ensure that no Indian family is pushed into poverty by the cost of hospitalisation. Rs 5 lakh of annual coverage per family for over 55 crore people sounds like the kind of benevolent intervention any welfare state ought to aspire to. But, as is the case with many grandiose schemes born in New Delhi, the devil — as always — lies in the execution.
More than five years after its launch, Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) suffers from a malaise that cannot be addressed by more announcements or token expansions. The real story, drawn from parliamentary submissions, state-level protests, and the persistent withdrawal of private healthcare providers, paints a picture of a scheme that is buckling under its own weight.
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Leaky boat of reimbursements and delays
Since its inception in 2018, over 600 private hospitals — including some of the most critical secondary and tertiary care institutions — have opted out of PMJAY. Gujarat, Kerala, and Maharashtra top the ignominious list. Their reasons are not hard to grasp. Delays in reimbursements, low treatment tariffs, and the opaque nature of claim approvals have left many hospitals — particularly smaller ones — struggling to stay afloat.
The National Health Authority prescribes claim settlement within 15 days for in-state hospitals, and 30 days for out-of-state ones. But the ground reality tells a different tale. The Indian Medical Association’s Haryana unit had to suspend services under PMJAY over Rs 400 crore in unpaid dues. Similar agitations have erupted in Punjab and Jammu and Kashmir. If one were to borrow a corporate metaphor, this scheme would be classified as a non-performing asset — large on paper, but corrosive in practice.
Ayushman Bharat undone by top-down design
The Ayushman Bharat scheme suffers from what may be called policy centralism — a top-down design that disregards regional variations in healthcare costs, capacity, and infrastructure. Doctors from the Delhi Medical Association have pointed out, rightly, that applying the same tariff for procedures in Delhi as in smaller towns is economically absurd. High infrastructure costs and skilled manpower do not come cheap in the capital, or in metros like Mumbai and Bengaluru.
A universal healthcare scheme cannot afford to be blind to these basic economic realities. Nor can it afford to antagonise private hospitals through arbitrary packages, delayed payments, and exclusionary rules. In states like Chhattisgarh and Gujarat, certain procedures are reserved exclusively for government hospitals, discouraging private sector participation and creating perverse disincentives.
Expansion at the cost of sustainability
In its bid to claim political mileage, the Union government has been on an expansion spree. ASHA and Anganwadi workers have been included. More recently, the elderly — those above 70 years — have been offered coverage. Delhi and Odisha, once holdouts, have now been brought into the fold. On paper, all this is commendable. But there is a limit to what a system can absorb without structural support.
As the director general of the Association of Healthcare Providers of India put it, small hospitals operate on razor-thin margins. When the patient mix changes — from 70% paying patients to 70% Ayushman Bharat cardholders, as has happened in many areas — the cross-subsidy model collapses. Without higher tariffs, prompt payments, and proper claim scrutiny, hospitals simply cannot survive.
In fact, administrators from Kurukshetra and Gurugram report receiving as little as 10–15% of their claimed amounts. The rest is eaten away by opaque deductions and bureaucratic wrangling. The promise of free care thus turns into a subsidy not from the government, but from hospitals themselves — a recipe for institutional bankruptcy.
The myth of universal coverage
It is fashionable to call Ayushman Bharat a step towards Universal Health Coverage (UHC). But this is a misconception, if not a deliberate misrepresentation. First, the scheme only covers hospitalisation — a fraction of a citizen’s health needs. Second, primary care, diagnostics, and preventive services are either inadequately addressed or missing altogether. Third, the very identification of beneficiaries remains suspect. MPs have flagged fraudulent entries in beneficiary lists, while others have questioned the logic of using a 2011 socio-economic census in 2025.
Even among the elderly — supposedly the new frontier of coverage — uptake is abysmal. Just 1.87 million people aged 70 and above have registered, a mere 3% of the target group. Lack of awareness, digital exclusion, and bureaucratic hurdles are partly to blame. But this also reflects the scheme’s failure to meet people where they are — a cardinal sin in public health policy.
The public-private divide
For all its rhetoric of partnership, the Union government has done little to inspire trust among private providers. Meetings with the health ministry, and even high-level committees under NITI Aayog, have gone in circles. Proposals such as a 1% interest clause on delayed payments, transparency in claim status, and recovery of fixed costs have been shelved or buried in red tape. Empanelment is voluntary, yet there is an expectation that hospitals will operate at a loss to uphold a scheme designed without their consultation.
In states like Bihar, the situation is even more dire — with over 10,000 families per empanelled provider. Add to this that nearly 40% of empanelled hospitals are inactive, and one begins to question the very basis of the scheme’s statistics.
Reforming from the root
The need of the hour is not more expansion, but urgent reform. A revamp of the reimbursement structure, decentralised tariff setting, and prompt payments are non-negotiable. The Centre must also invest in strengthening public hospitals and wellness centres to reduce the burden on private players.
Moreover, India should look to global best practices. Countries like Thailand and Uruguay have shown that integrating provider and payer roles, coupled with performance-based funding, yields better outcomes. Our current model — a fragmented patchwork of government money, private delivery, and opaque accountability — is neither sustainable nor ethical.
Ayushman Bharat was launched with a flourish, and understandably so. Healthcare is a vote-winner, and the promise of free treatment tugs at the heartstrings. But unless the government addresses the fundamental contradictions in its design, the scheme risks becoming another hollow monument to policy hubris.
As someone once said, “You cannot administer an idea; you must implement a plan.” Ayushman Bharat, in its present form, is an idea waiting for a plan.