India's Health Care System and Policies

India, as the world's largest democracy, is committed to the World Health Organization’s Universal Health Coverage (UHC) framework, which emphasizes primary health care (PHC) and aims to reduce out-of-pocket expenditure (OOPE).

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)

• AB-PMJAY is an insurance-based program focused on reducing OOPE by covering hospitalization, surgeries, and secondary and tertiary procedures.
• Since 2018, over 36 crore Ayushman cards have been issued, and more than 31,000 hospitals empaneled.
• The 2025 Budget allocates ₹9,406 crore to AB-PMJAY, increasing privatization and insurance-based financing.

Criticism of AB-PMJAY

• Criticized for sidelining the UHC principle of PHC, which weakens public health infrastructure and strengthens private health care.
• Encourages a shift from preventive and community-based health care, increasing long-term costs and reliance on private hospitals.
• Contradicts the Bhore Committee’s vision of strong primary health care, with a pyramid-shaped health system tapering to secondary and tertiary care. 

Budget Allocation and Priorities

• The health budget includes ₹95,957.87 crore for the Department of Health and Family Welfare and ₹3,900.69 crore for the Department of Health Research.
• Focuses on medical digital infrastructure and education, with a declining share for the National Health Mission.
• Raises foreign direct investment (FDI) cap in the insurance sector to 100% to improve insurance penetration, especially in rural areas.

Concerns and Challenges

• Policy changes raise concerns for India’s informal workforce and marginalised urban populations without universal health coverage.
• Insurance illiteracy and reliance on middlemen complicate access for non-literate working classes.
• OOPE likely to increase due to inflated medical costs without private sector regulation.
• Uncertainty in coverage for Accredited Social Health Activist (ASHA) workers and grass-root providers.
• Outdated data from the last Census (2011) and Periodic Labour Force Survey (2020-21) hinders scheme allocation efficiency.

Lessons from Global Experiences

• U.S. experiences show risks of over-reliance on private insurance, including rising costs and inequalities.
• Thailand (tax-funded universal coverage) and Costa Rica's Mandatory insurance scheme (Caja Costarricense de Seguro Social) offer models through regulated private insurance prioritizing primary care.

Recommendations for India

• Reassess priorities towards preventive, community-based care, accessible for all, especially vulnerable populations.
• Implement comprehensive public health benefit packages and cost-control mechanisms to reduce OOPE and achieve UHC.
• Ensure safeguards against private insurance driving up health-care costs, maintaining the commitment to ‘Health for All’.