Reaping the silver dividend
- The recent decision by the Indian government to extend the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) to include a Rs 5 lakh top-up for older adults aged above 70 years, not covered by other public health insurance schemes, is a commendable step towards addressing the healthcare needs of the elderly.
- This initiative is expected to benefit 4.5 crore families. However, its capacity to protect against catastrophic healthcare expenditures (CHE) and support healthy ageing remains uncertain.
Growing Healthcare Challenges for India’s Elderly:
- India, now the world’s most populous country, is also experiencing one of the fastest rates of population ageing. With a life expectancy of 70 years, the healthy life expectancy is only 63.5 years, leaving a significant portion of the elderly vulnerable to non-communicable diseases and disabilities.
- The country’s informal labor sector leaves nearly 92% of the workforce uncovered by employer-based health insurance schemes. As a result, healthcare costs disproportionately impact elderly households, with out-of-pocket (OOP) spending for inpatient care twice as high for older adults compared to younger populations.
- Furthermore, almost half of the Indian households face CHE, with 15% becoming impoverished due to hospitalizations.
- The extension of AB-PMJAY will undoubtedly alleviate some of these financial burdens, providing a safety net for vulnerable elderly. However, the program’s budget allocation of Rs 3,437 crore falls short of what is required to fully support the intended population.
- According to estimates, 5.6 crore households qualify for the scheme, and with 43.5 lakh families expected to use it annually, the actual budgetary requirement for hospitalization alone is projected to be Rs 14,282 crore — four times higher than the current allocation.
Gaps in Coverage and the Need for Comprehensive Reforms:
- While AB-PMJAY focuses on secondary and tertiary care, which is critical for treating severe illnesses, it overlooks key areas like outpatient care, preventive services, and palliative care, which are essential for managing the chronic conditions prevalent among older adults.
- Non-communicable diseases such as diabetes, cardiovascular disease, and cancer require long-term treatment and regular consultations, which are not covered by the scheme. Moreover, the exclusion of outpatient care from the insurance coverage severely limits its effectiveness in promoting preventive healthcare, essential for healthy ageing.
- The current approach also neglects the need for palliative care for those in the 80+ age group or those bedridden due to chronic illness, further highlighting the limitations of AB-PMJAY in addressing the full spectrum of healthcare requirements for the elderly.
A Holistic Approach to Elderly Healthcare:
- To ensure healthy ageing and prevent the elderly from slipping into poverty due to healthcare costs, the expansion of AB-PMJAY must be accompanied by a broader reform of India’s healthcare system.
- The public health expenditure, which has been stagnant at around 1.35% of GDP, needs a substantial boost to strengthen the primary, secondary, and tertiary healthcare sectors. This includes expanding healthcare infrastructure, increasing the availability of human resources, and ensuring a reliable supply of medicines.
- Countries like Canada, Australia, and Europe treat healthcare as a public service and focus on primary healthcare, which has been proven to yield better health outcomes.
- In contrast, the reliance on insurance-based models, as seen in the US, tends to inflate overall healthcare costs. India’s healthcare reforms should aim for a public-service-oriented model that provides comprehensive support across all levels of care, particularly for the ageing population.
The Path Ahead: Healthy Ageing as a Priority:
- The extension of AB-PMJAY is a valuable step toward protecting the elderly from CHE, but it does not address the wider needs of the ageing population. As demographic transitions accelerate in the coming decades, the need for holistic policies that promote healthy and active ageing will become increasingly urgent. The government's efforts should focus not only on healthcare coverage but also on policies that support healthy ageing and ensure that older adults can continue to contribute economically and socially.
- To truly reap the benefits of the “silver dividend”, it is critical to integrate preventive, primary, and palliative care into the healthcare system and invest significantly in public health infrastructure. Without such measures, the healthcare challenges facing India’s elderly will remain unaddressed.