Ayushman Bharat PM-JAY

How India's large public health insurance scheme pays for hospital care for poorer families, what it covers, and what evidence shows.

In 2018, India launched Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, often called PM-JAY. It is one of the largest government-funded health insurance schemes in the world.

What it covers

PM-JAY provides health cover of up to 5 lakh rupees per family per year for hospital care, including surgeries and treatment for serious illnesses, at empanelled public and private hospitals. Care is cashless: eligible patients do not pay at the hospital, and the scheme pays hospitals according to set package rates.

Eligibility was originally based on deprivation criteria from the Socio-Economic Caste Census of 2011, covering around 100 million poor and vulnerable families. In 2024, coverage was extended to all people aged 70 and above, regardless of income.

Why it was needed

India has long had high out-of-pocket health spending: households paying directly for care. Large medical bills push many families into debt or poverty. PM-JAY aims to protect families from catastrophic hospital costs.

Evidence so far

The scheme has funded many millions of hospital admissions.
Some studies found increased use of hospital care among eligible families.
Other studies found limited effects on overall out-of-pocket spending, partly because outpatient care and medicines, a large share of costs, are not covered, and some hospitals still charge patients.
Awareness and uptake vary between states.

A cashless surgery

A daily wage worker's father needs heart surgery. Without insurance, the cost would force the family to borrow at high interest or sell land. As a PM-JAY beneficiary, the father receives surgery at an empanelled private hospital, and the scheme pays the hospital directly. The family avoids a debt that could have lasted years.

Challenges

Package rates: some private hospitals say rates are too low, limiting participation.
Fraud: fake claims and unnecessary procedures require monitoring.
Outpatient care is not covered, though it makes up much of household health spending.
Supply: in poorer states, few hospitals may be available.

Thinking insurance alone solves health access

Insurance pays bills, but people also need nearby hospitals, doctors and medicines. Without enough health facilities, especially in poorer areas, insurance cards cannot deliver care.

Key takeaways

PM-JAY, launched in 2018, provides up to 5 lakh rupees of hospital cover per family per year.
It covers poor and vulnerable families and, since 2024, everyone aged 70 and above.
It has funded millions of hospital admissions but has had limited effects on total out-of-pocket spending.
Package rates, fraud, outpatient costs and hospital availability are challenges.