A report by PRS Legislative Research and the Institute for Policy Research Studies revealed that between 2019-20 and 2023-24, only 67% of the allocated funds were utilised. Although fund usage has improved since 2019-20, with annual allocations averaging ₹6,000-7,000 crore between 2018 and 2023, the Standing Committee on Health and Family Welfare (2023) highlighted that these funds remain insufficient to provide comprehensive coverage to all states and union territories.
The report stressed that these allocations were inadequate to extend coverage to all 33 states and UTs, further underlining concerns about the scheme’s ability to ensure universal healthcare access. Ayushman Bharat aims to provide cashless hospitalisation benefits of up to ₹5 lakh per family per year, targeting the poorest 40% of India’s population—about 12 crore families. However, despite a ₹9,406 crore allocation for 2025-26, representing a 24% increase over the revised estimates for 2024-25, the scheme still faces hurdles in meeting its objectives.
Outpatient services and infrastructure gaps
In a bid to address these challenges, the Union Budget for 2025-26 proposed expanding the scheme to include six crore senior citizens and gig workers from the growing platform economy. This expansion is expected to further increase the beneficiary base, which currently spans 15 crore families across various states.
However, concerns persist regarding the scheme's scope of coverage. The Standing Committee on Health and Family Welfare pointed out that the scheme does not address key issues related to insurance coverage in India, particularly the exclusion of outpatient (OPD) services and individuals above the poverty line who are uninsured.
This limitation contrasts with healthcare schemes in other countries, such as Australia and Thailand, which offer more comprehensive coverage, the report said. The report cited that Australia’s programme funds 75% of hospitalisation costs for permanent residents and provides free consultations, while Thailand covers 75% of its population, including both inpatient and OPD care.
As of January 2025, 36.4 crore Ayushman cards have been issued, leading to 6.8 crore hospital admissions. Despite this, certain high-end surgeries and chronic treatments costing more than ₹5 lakh are excluded from the scheme, leaving gaps in coverage, the report said. The average claim under the scheme in 2023 was ₹11,787, covering common procedures such as heart surgeries, dialysis, and caesarean deliveries, it said.
Rising Dependence on private healthcare
Another challenge highlighted in the report is the limited capacity of empanelled hospitals. Many of these hospitals are small, with an average bed strength of just 48. The Comptroller and Auditor General (CAG) of India raised concerns about the shortage of infrastructure, equipment, and doctors in these facilities. The Standing Committee report emphasised that empanelled facilities are generally small, with limited capacity, further straining the scheme's effectiveness.
While private hospitals dominate the healthcare sector in India, accounting for 55% of hospitalisation cases, government hospitals are struggling to meet the growing demand for services. In states like Telangana, Maharashtra, and Uttar Pradesh, government hospitals handle a smaller share of cases, with just 21%, 22%, and 27% of hospitalisations, respectively.
Furthermore, private hospitals account for 66% of outpatient services, highlighting the increasing reliance on the private sector for both inpatient and outpatient care. Data from the National Family Health Survey-5 (2019-21) shows that 50% of respondents generally avoid government health facilities, citing factors like poor quality of care, long waiting times, and lack of nearby services. In states like Bihar, Uttar Pradesh, and Telangana, the avoidance rate is even higher, with 80%, 75%, and 64% of people, respectively, opting out of public health services.
A significant concern raised in the report is the high level of out-of-pocket expenditure (OOPE) in India, which remains a substantial financial burden for households. Although OOPE as a percentage of current health expenditure (CHE) has decreased from 65% in 2010 to 50% in 2021, it continues to be a major issue. The National Health Policy aims to reduce OOPE, but the heavy reliance on private healthcare remains a significant barrier.
The report noted that many households still spend a large portion of their income on healthcare, which can push them into poverty. NITI Aayog (2021) pointed out that around 30% of India’s population is ineligible for health insurance due to the nature of their occupations or income levels, including self-employed farmers and shop workers in rural and urban areas.
Additionally, the report highlighted that 80-85% of households facing catastrophic health expenses are impacted by outpatient care costs, which are typically not covered by most insurance schemes in India. “Insurance schemes in India largely do not cover outpatient care, which constitutes about 38% of current health expenditure,” the report said.