PM-JAY is completely funded by the Government and costs are shared between Central and State Governments. The Government of India decides a national ceiling amount per family that is used to determine the maximum limit of the central share of the contribution. The actual premium discovered through open tendering process or the maximum ceiling of the estimated premium decided by Government of India for the implementation of PM-JAY, whichever is less, would be shared between Central Government and States/UTs in the ratio as per the extant directives issued by Ministry of Finance, from time to time. In addition, administrative cost for implementing the scheme at the State level is also provided under the scheme and shared between Centre and State in the same sharing pattern.

 

The existing sharing pattern is in the ratio of 60:40, for States (other than North-Eastern States & three Himalayan States) and Union Territories with legislature. For North-Eastern States and three Himalayan States (viz. Jammu and Kashmir, Himachal Pradesh and Uttarakhand), the ratio is 90:10. For Union Territories without legislatures, the Central Government may provide up to 100% on a case-to-case basis.

Payment of Central Share

• Insurance model – A flat premium per family, irrespective of the number of members under PM-JAY in that family, is paid to the State Government which in turn pays this to the insurer based on the number of eligible families.
• Assurance model – Central share of the contribution is paid based on the actual cost of claims or the ceiling whichever is lower. If the State is using an Implementation Support Agency, then cost of ISA, determined through tender, is also shared between Centre and State.

Expansion of Coverage By States Under PM-JAY, Convergence and Flexibility to The States

Various States have been implementing their own health insurance/assurance schemes over the past couple of decades. Most of these schemes provide cover for tertiary care conditions only. The benefit cover of these schemes is mostly available within the State boundaries except some smaller States who have empanelled a few hospitals outside the State boundaries. Very few States had converged their schemes with the erstwhile RSBY scheme and many of them were operating independently. This was due to the lack of flexibility in the design of the RSBY, which although initially helped in quick scale-up but became a challenge over a period of time and offered limited flexibility to the States.(PRADHAN MANTRI JAN AROGYA YOJANA)

Even though these schemes were targeting the poor and vulnerable, there were large variations across States in terms of eligibility criteria and databases. Few States were using the food subsidy database while some others had created a separate database for their welfare schemes.

The primary objectives for launching PM-JAY were to ensure comprehensive coverage for catastrophic illnesses, reduce catastrophic out-of-pocket expenditure, improve access to hospitalisation care, reduce unmet needs, and to converge various health insurance schemes across the States. PM-JAY will also establish national standards for a health assurance system and is providing national portability of care.

In the spirit of cooperative federalism and keeping in mind variations across the States, a lot of flexibility has been built in the PM-JAY design. Therefore, PM-JAY provides a lot of flexibility to States in terms of scheme design and implementation.

States have been provided the flexibility in terms of the following parameters:

• Mode of implementation – States can choose the implementation model and can implement the scheme through Trust, Insurance company or Mixed model.
• Usage of beneficiary data – PM-JAY uses SECC data for targeting the beneficiaries, however, States have been provided flexibility to decide on the dataset for this purpose, if they are covering more beneficiaries than SECC defined numbers. However, State will need to ensure that all beneficiaries eligible as per SECC data are also covered.
• Co-branding – States can co-brand their existing health insurance/assurance schemes with PM-JAY as per co-branding guidelines of the scheme.
• Expansion of cover to more people – States can cover more number of families than those defined as per SECC data. For these additional families, full cost will need to be borne by the States.
• Increasing benefit cover to higher value – If the State want they can even expand the benefit cover beyond `5 lakh per family per year. However, in this case cost of additional cover will need to be completely borne by the State.
• Revision in package numbers and pricing – PM-JAY provides cover of more than 1300 packages and their prices have been fixed by NHA. However, keeping in view the different disease profile and cost of services variations across the States, flexibility has been provided to the States to expand the number of packages and also within a limit State can also revise the package prices.
• Reservation of packages for public hospitals – To ensure that such services that can be provided well by Government health facilities are not misused by private providers, NHA has defined a set of conditions that are reserved for only public health care facilities. States can revise list of such conditions that are reserved for public hospitals.
• IT Systems – Before the launch of PM-JAY some of the States were implementing their own health insurance schemes and were using their own IT systems. PM-JAY provides flexibility that State can continue using their own IT system and share data with NHA on a real time basis in specified format.
• Payment to public hospitals – States have also been provided flexibility to deduct a certain percentage of claims amount that is paid to public hospitals.