The government is actively considering doubling the beneficiary base under its flagship Ayushman Bharat health insurance scheme over the next three years, with all those aged above 70 years to be brought under its ambit to begin with, and also increase the insurance coverage to Rs 10 lakh per year.

The proposals, if given a go ahead, would entail an additional expenditure of Rs 12,076 crore per annum for the exchequer as per estimates prepared by the National Health Authority, official sources told PTI.

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“Discussions are happening to double the beneficiary base under the AB-PMJAY over the next three years, which, if implemented, will cover more than two-third population of the country with health cover, the sources said while noting that medical expenditure is one of the biggest reasons that push families to indebtedness.

“Deliberations are also underway over finalising a proposal to double the limit of the coverage amount from the existing Rs 5 lakh to Rs 10 lakh,” they said.

These proposals or some parts of it are expected to be announced in the Union Budget to be presented later this month.

In the interim Budget 2024, the government increased the allocation for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), which provides health cover of Rs 5 lakh per family per year for secondary and tertiary care hospitalization to 12 crore families, to Rs 7,200 crore while Rs 646 crore was assigned for the Ayushman Bharat Health Infrastructure Mission (PM-ABHIM).

President Droupadi Murmu, in her address to the joint sitting of Parliament on June 27, had said all the elderly above 70 years of age will also be covered and get the benefit of free treatment under the Ayushman Bharat Yojana now.

Those above 70 years of age add up to around 4-5 crore more beneficiaries being covered under the scheme, another source said.

The limit of Rs 5 lakh for AB-PMJAY was fixed in 2018. Doubling the cover amount is aimed to cater for inflation and provide relief to families in case of high-cost treatments such as transplants, cancer etc.

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The NITI Aayog, in its report titled ‘Health Insurance for India’s Missing Middle’ published in October 2021, suggested extending the scheme. It had stated that about 30 percent of the population is devoid of health insurance, highlighting the gaps in the health insurance coverage across the Indian population.

The AB-PMJAY flagship scheme towards Universal Health Coverage, and state government extension schemes provides comprehensive hospitalisation cover to the bottom 50 per cent of the population.

Around 20 per cent of the population is covered through social health insurance, and private voluntary health insurance primarily designed for high-income groups.

The remaining 30 per cent of the population is devoid of health insurance, the actual uncovered population is higher due to existing coverage gaps in PMJAY and overlap between schemes. This uncovered population is termed as the missing middle, the report stated.

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The missing middle is not a monolith, it contains multiple groups across all expenditure quintiles. The missing middle predominantly constitutes the self-employed (agriculture and non-agriculture) informal sector in rural areas, and a broad array of occupations—informal, semi-formal, and formal—in urban areas, the report said.

The report highlighted the need for designing a low-cost comprehensive health insurance product for the missing middle. It primarily recognises the policy issue of low financial protection for health for the missing middle segment and highlights health insurance as a potential pathway in addressing that.