Earlier this year, Union Home Minister Amit Shah lauded the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) as the Modi government’s most “transformative public welfare scheme”. In his Independence Day speech this year, Prime Minister Narendra Modi said that Ayushman Bharat had “freed people from the habit of silently enduring illness and helped them get good healthcare”.
Introduced in 2018 by Modi, the scheme was envisioned as a step towards universal health coverage. It grants cardholders and families coverage of up to Rs.5 lakh annually for secondary and tertiary hospitalisation in both public and empanelled private hospitals. Targeted at the bottom 40 per cent of India’s population—nearly 55 crore people—it was hailed as a game-changing social welfare initiative.
However, the lived experience over the past seven years tells a complex story. In September 2019, for instance, Bareilly’s Matloob Hussain, suffering from fever and chest pain, was refused admission by four private hospitals although he had an Ayushman card. He died the next day, ironically, just one day after the scheme’s first anniversary. More recently, in December last year, a 72-year-old Bengaluru resident diagnosed with gastric cancer reportedly died by suicide after being denied benefits under the AB-PMJAY. Such incidents have repeatedly cast doubt on the scheme’s promise of universal healthcare coverage.
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Such stories have multiplied in recent months. According to data shared by the National Health Authority (NHA) in response to an RTI application, pending bills have crossed Rs.1.21 lakh crore as of February this year. Already, over 650 private hospitals in Haryana, out of 774 empanelled under the scheme, have opted out citing non-payment of dues. Many private hospitals from other States have reportedly followed suit. (After meetings with government officials who promised to clear claims within 30 days, many hospitals in Haryana agreed to reconsider the decision.)
“Initially, the programme was essentially an insurance scheme for the poor, the socially and economically disadvantaged communities,” said Ajay Mahajan, president of the Haryana chapter of the Indian Medical Association (IMA). Families earning less than Rs.1.2 lakh a year, widows, and people with disabilities were among the first beneficiaries.
Funding was designed as a 60-40 split between the Centre and States, with government hospitals billing the State Health Authority rather than patients directly.
In Haryana, the State government admitted that reimbursements worth around Rs.490 crore were pending, which had pushed many smaller hospitals to the brink.
Exit of private players
This mass exodus of private players exerts a lot of pressure on the public healthcare system, which lacks the facilities to deliver most promised packages. “Private hospitals were unwilling at first because the rates were too low. The government promised annual revisions in line with inflation and payment within 15 days of claims being raised. Neither commitment has been honoured,” said Mahajan.
The scheme also included a penalty clause: if payments were not made in 15 days, a penalty of 1 per cent would be levied every seven days. “However, to date, the government has not paid interest on delayed payments,” he said.
Senior citizens aged 70 and above receive their Ayushman Vaya Vandana cards, under PMJAY, at Thyagaraj Stadium in New Delhi on April 28, 2025.
| Photo Credit:
ANI
Then, in September 2022, the Haryana government launched Chirayu Yojana, its own healthcare scheme, expanding coverage dramatically to include families earning between Rs.1.8 lakh and Rs.3 lakh annually. From 35-40 lakh Ayushman cards, the State suddenly had over one crore beneficiaries, with the new scheme effectively functioning as an extension of the PMJAY in Haryana. This funnelled poor and middle-class patients into small and medium private hospitals, such as doctor-owned multispecialities or individual/couple-run hospitals. “These hospitals started seeing 80 per cent of their patients coming under Chirayu cards. In a month, the budget was overwhelmed. Payments stopped arriving on time, and by early 2023, hospitals were borrowing heavily just to pay staff and vendors,” Mahajan told Frontline.
Other States also began to integrate national and State schemes; for instance, Maharashtra has merged the PMJAY with the Mahatma Jyotirao Phule Jan Arogya Yojna.
All these issues were formally raised with the Haryana government in July 2023. Meanwhile, technical glitches compounded the crisis. A new claims portal launched in 2024 by the NHA, which implements the PMJAY, left many hospitals unable to even upload completed cases. Hospital services have been suspended repeatedly, and the State government has been making periodic interventions. It released Rs.560 crore in March 2025 and made partial payments in August. But the fundamental mismatch between allocations and actual expenditure remains unresolved.
Other commitments made when the scheme was launched have also been diluted, said Mahajan. “Hospitals were forced to empanel under Ayushman if they wanted to remain on the Haryana government panel, even if they were unwilling. Earlier, hospitals could choose which specialities to offer under the scheme, but later they were compelled to offer all. This made even marginally profitable departments run at a loss, especially with delayed payments.”
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The Micro, Small and Medium Enterprises (MSME) Development Act complicates matters further as it requires vendors to be paid within three months, failing which expenses cannot be claimed. “When hospital payments are delayed six months or more, vendors cannot be paid on time, and hospitals lose tax benefits. Many hospitals are registered as MSMEs themselves, yet the government does not pay them within the mandated three months. Of course, no one can penalise the government,” said Mahajan. Small and medium hospitals, small doctor-run hospitals or medical colleges that use them for teaching purposes bore the brunt, while big-chain corporate hospitals such as Max and Fortis do not participate in either the PMJAY or Chirayu due to the low package rates.
Frustrations and corrections
For the hospitals, the frustrations go beyond delays. “Sometimes 80-90 per cent of the billed amount is deducted, with no clear explanation. If we raise a bill of Rs.20,000, we may get only Rs.3,000 or Rs.4,000,” said Dr Suresh Arora, chairman of the Haryana Ayushman Samiti and senior consultant at Surya Ortho and Trauma Centre, Faridabad. “The package rates are also unviable. For smaller hospitals, the work we do under Ayushman is essentially charity. Bigger corporate hospitals like Max or Fortis don’t even bother to join.”
Arora argued for two urgent corrections: “First, budget allocations must match actual expenditures. Last year, the scheme cost around Rs.1,600 crore in Haryana, but only Rs.700 crore was sanctioned this year. Second, package rates must be revised annually in line with inflation. Costs rise every year—medicines, salaries, equipment—but the scheme rates have been stagnant since 2021.”
The pressure on government hospitals piles up as smaller private hospitals exit the healthcare industry because they cannot cope with bills left pending under the PMJAY. Here, a hospital in Hyderabad, a file photograph.
| Photo Credit:
NAGARA GOPAL
The scheme was revised in 2021, but nearly 80 per cent of the rates stayed the same, with some even reduced. Only 10 per cent of the rates were hiked. Another 10 per cent consisted of newly introduced packages. “The rates fixed nearly eight years ago were already inadequate,” Dr Nitin Juneja, secretary of the IMA, Chhattisgarh, told Frontline. “The average cost of hospitalisation under the scheme is pegged at Rs.13,000 to Rs.15,000. Yet, according to the government’s own National Sample Survey Organisation data, the average cost of hospitalisation in private facilities was around Rs.40,000 in 2015.”
Dr Juneja said the scheme had been structured on suboptimal pricing. “The problem is compounded because government and private hospitals are paid identical package rates, and private hospitals are unable to bear the cost.”
Firefighting through supplementary allocations
The government has been trying to firefight through supplementary allocations. At a meeting in August, Haryana officials declared that an additional Rs.800 crore was awaiting Assembly approval, and Rs.291 crore was awaiting disbursal. But hospitals remain sceptical. Mahajan said: “Hospitals cannot run on promises. Without timely payments and fair rates, small and medium hospitals will collapse—and with them, the backbone of Ayushman Bharat in Haryana.”
The situation in Chhattisgarh is no different, with hospitals in the State alleging that payments amounting to Rs.900 crore—owed to nearly 1,000 private institutions—have been pending since September last year. Dr Juneja said: “The scheme was initially launched under an insurance model, then shifted to a hybrid framework, and eventually into a trust-based mode. At present, under the trust model, an Implementation Support Agency—responsible for processing claims—is to be appointed by the State or the State Health Agency. However, the tender for the appointment has been pending for the past six months. Despite this, nearly 15 lakh patients were treated under the scheme in Chhattisgarh last year. Notably, the scheme in the State includes the above poverty line population, thereby ensuring almost universal coverage.”
Manipur, Tripura, Nagaland, Rajasthan, and Jammu and Kashmir are all struggling to clear pending dues. Earlier this month, the Manipur chapter of the Association of Healthcare Providers, India warned that it would suspend treatment benefits if the roughly Rs.80 crore owed to nearly 43 hospitals was not paid.
“Every State has the same issue, in one form or another,” said Dr R.V. Asokan, former national president of the IMA. “This is an impossible scheme, and the IMA has officially advised members to participate at their own risk.”
Asokan alleged that the scheme was “less about healthcare and more about politics”. He pointed out that nearly 70 per cent of Ayushman Bharat coverage is directed towards government hospitals. “But treatment in government hospitals was already free for all below poverty line patients across the country. What, then, is the point of spending Ayushman Bharat funds on procedures already available without cost?”
Allocation far short of requirement
Experts estimate that the scheme requires at least Rs.1.6 lakh crore a year to function effectively. Yet, it began with an outlay of just Rs.2,400 crore in 2018-19.
In a Lok Sabha answer dated March 21, 2025, the Ministry of Health and Family Welfare (MoHFW) said that the funds allocated for 2024-25 and 2025-26 were Rs.7,299 crore and Rs.9,406 crore, respectively.
At Government General Hospital at Sangareddy, Telangana, in September 2025.
| Photo Credit:
MOHD ARIF
According to Asokan, these structural flaws have wider implications for healthcare access and affordability. “Small and medium hospitals form the backbone of healthcare in towns and villages. If these facilities disappear—as has been happening in States like Kerala, where thousands of such hospitals have shut down—they will be replaced by large corporate chains. Volumes may increase in big hospitals, but accessibility and affordability will fall, and costs will rise. This is essentially indirect price control on the private sector.”
According to him, the scheme’s core intent—to reduce out-of-pocket expenditure for the poor—has been undermined by underfunding, bureaucratic hurdles, and poor design. “Ayushman Bharat is presented as covering 50 per cent of India’s population. In reality, many of these people were already receiving free or subsidised care. The scheme’s reach is over-represented and its impact on actual out-of-pocket spending overstated.”
Yet, Ayushman Bharat continues to expand. In April 2025, Delhi became the 35th State/Union Territory to implement it, and 4.55 lakh cards have been issued. According to the 2011 Census, around 6.54 lakh families in Delhi are eligible. Beneficiaries receive insurance benefits of Rs.5 lakh to Rs.10 lakh from the Centre and the Delhi government—along with OPD services at Ayushman Arogya Mandirs in the city. Currently, 151 hospitals are empanelled, both private and government. However, as in Haryana, large hospital chains such as Fortis, Apollo, and Max are not empanelled.
Delhi gets PMJAY with change in regime
The rollout comes on the heels of the BJP taking over from the AAP in New Delhi. The AAP government’s Delhi Aarogya Kosh (DAK) scheme provided financial assistance up to Rs.5 lakh, and the party had opposed Ayushman Bharat, saying it would only benefit 12 to 15 per cent of the city’s population while DAK was more far-reaching.
Dr Umesh Tiwari, Senior Medical Officer and nodal officer of Ayushman Bharat at Delhi’s Ram Manohar Lohia hospital, told Frontline that the lack of manpower remains a major obstacle in government hospitals. “Earlier, we had 10-12 patients come in every day under Ayushman Bharat; now we are seeing 30-35 cases daily. Being landlocked and part of the NCR, Delhi naturally draws patients from neighbouring regions also.”
Already, Delhi, too, is grappling with reimbursement delays. “Claim settlement continues to be a persistent issue,” said Tiwari. “In practice, claims are supposed to be settled within 15 days, but delays are common, with some being returned for corrections and others left unresolved. Nevertheless, work is ongoing, and officials say it will soon be streamlined.” Another hitch Tiwari pointed to was enrolment. Many patients are unable to access benefits under the scheme as the database relies on 2011 records, making card generation difficult even after many attempts at enrolment.
Neither the All India Institute of Medical Sciences nor the NHA has responded to Frontline’s queries yet.
Meanwhile, another issue has cropped up: that of fraudulent claims. In February, the Chhattisgarh government carried out its biggest-ever crackdown on 28 private hospitals in three of the largest districts. It uncovered rampant double-billing, fake and inflated claims, complex procedures conducted unnecessarily, ghost patients used to raise reimbursements, and people lured to medical camps for needless treatments. According to a reply in the Rajya Sabha dated February 11, 2025, the MoHFW said that of the 6.66 crore claims processed, 2.7 lakh claims from private hospitals were found to be non-admissible on account of abuse, misuse, or incorrect entries.
Rajib Dasgupta, professor at the Centre of Social Medicine and Community Health, JNU, said that the PMJAY’s design and practice do not support sustainability.
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However, the publicly funded health insurance scheme has seen a steady increase in the number of intended beneficiaries. In March 2024, it was expanded to include 10.34 lakh ASHA (Accredited Social Health Activist) workers, 13.96 lakh anganwadi workers, and 12.89 lakh anganwadi helpers, along with their families. And recently, six crore senior citizens aged 70 and above, irrespective of their socio-economic status, were brought under its ambit. This unsustainable growth in the targeted group coupled with inadequate financial and administrative infrastructure in public hospitals increases the risk of overdependence on the private sector.
According to Dasgupta, while Ayushman Bharat’s insurance arm dominates public discourse, its other pillar—health and wellness centres—is underdeveloped. If comprehensive primary healthcare is not strengthened fast enough, secondary and tertiary care will continue to be over-accessed and, in many cases, overwhelmed, he warned.
Given its track record over the past few years, it is obvious that the much-touted health scheme, billed as a game changer, will not hit its mark unless the government honours its commitments and abides by basic rules.
