Out-of-Pocket Expenditure remains a major barrier to Universal Health Coverage in India. Critically examine the effectiveness of AB PM-JAY and allied schemes in addressing this challenge.

Out-of-Pocket Expenditure (OOPE) — direct household payment at the point of care — fell from 64.2% of Total Health Expenditure in 2013-14 to 43.4% in 2022-23 [1]. Yet it still finances the largest single share of India's health spending, leaving Universal Health Coverage (UHC) incomplete despite a decade of scheme-led intervention.

Where the schemes have delivered

• Risk protection at scale: AB PM-JAY provides ₹5 lakh per family per year for secondary and tertiary hospitalisation to about 55 crore beneficiaries in 12.37 crore families — the bottom 40% of the population [2].
• Universalising for the elderly: the Ayushman Vay Vandana Card (Cabinet approval, September 2024) extends cover to roughly 6 crore citizens aged 70+ across 4.5 crore families, irrespective of income [3], closing an age-based vulnerability gap.
• Attacking recurring costs: over 1.75 lakh Ayushman Arogya Mandirs, the Free Drugs and Free Diagnostics Services, and Jan Aushadhi generics cut spending on medicines and tests [2].
• Shift to pooled financing: Government Health Expenditure rose from 28.6% to 43.7% of THE, and social security expenditure from 6% to 9.9% [1].

Where effectiveness is limited

• Design gap: PM-JAY is hospitalisation-centric; outpatient consultations, drugs and diagnostics — the bulk of household spending — stay largely outside assurance.
• The missing middle: informal-sector households above the bottom 40% and below 70 years depend on private insurance, whose share climbed to 9.2% [1].
• Uptake lag: only about 96.73 lakh Vay Vandana cards were created by December 2025 against ~6 crore eligible [4].
• Fiscal constraint: GHE stands at 1.43% of GDP [1], well short of the National Health Policy 2017 target of 2.5% by 2025 [5], straining empanelment and package rates.

Assurance schemes have decisively shifted financing from households to pooled sources, but insurance alone cannot deliver UHC while primary and outpatient care remain self-paid. Extending cover to outpatient care, honouring the 2.5% commitment [5], and deepening Arogya Mandirs would convert a falling OOPE into genuine universal coverage aligned with SDG-3.