Government-Sponsored Health Insurance Schemes in India

Healthcare costs in India have been increasing steadily, making quality medical treatment unaffordable for most. Even a slight medical procedure or emergency can lay a huge financial burden on most Indian households.

According to recent reports, 48.21% of patients paid their medical expenses out of pocket. The increasing out-of-pocket medical expenses are pushing Indian households into poverty. At the same time, retail health insurance premiums continue to soar, making quality healthcare almost inaccessible.

However, various government-sponsored health insurance schemes have emerged as a critical aid in providing essential healthcare to low-income households. These schemes have been crucial in advancing the government’s plans to attain universal health coverage.

These government-sponsored health insurance schemes focus on ensuring financial protection and quality healthcare for all by offering: healthcare at low or no premium, cashless treatment at empanelled hospitals, and extensive coverage covering a wide range of medical expenses.

Why Government Health Insurance Matters?

1. Financial Security

Medical emergencies can be unpredictable and expensive. For many families, even a single hospitalisation can lead to debt, asset liquidation, or long-term financial hardship.

Government health insurance schemes like PM-JAY or state-specific programmes provide cashless coverage, ensuring that eligible households can receive treatment without worrying about immediate out-of-pocket costs. By reducing the financial burden, these schemes act as a safety net for vulnerable populations.

2. Improved Access to Healthcare

Government schemes not only provide financial protection but also expand access to quality healthcare facilities. Empanelled hospitals — both public and private — are available under schemes like PM-JAY, CMCHIS, and Swasthya Sathi.

This network of hospitals across cities and rural regions ensures that patients can access specialist care, surgeries, and critical treatments that may otherwise be unavailable or unaffordable.

3. Equity in Health

Health inequalities remain a significant challenge in India. Vulnerable groups such as low-income families, daily wage workers, and senior citizens often delay or avoid treatment due to cost concerns.

Government health insurance schemes level the playing field, enabling these populations to receive timely and quality care. Programs like Ayushman Bharat specifically target the bottom 40% of the population, ensuring that economic status does not become a barrier to healthcare.

4. Step Towards Universal Health Coverage

India’s National Health Policy 2017 envisions affordable and equitable healthcare for all. Government-sponsored insurance schemes are a key instrument in achieving this vision. By combining central and state-level programs, India is steadily moving towards universal health coverage (UHC), reducing out-of-pocket expenses, improving preventive care, and strengthening the overall health system.

5. Promoting Preventive Care and Early Intervention

Some government schemes are linked with wellness centres and preventive health programs, encouraging early detection of diseases. By facilitating routine check-ups and screenings, these programs not only save lives but also reduce long-term healthcare costs for both families and the system.

Let’s explore India’s top government health insurance schemes and understand how they contribute to achieving universal health coverage for all.

Also read: Public vs Private Healthcare in India

Central Government Health Insurance Schemes

The central government has launched several flagship health insurance and assurance schemes aimed at protecting vulnerable populations and ensuring healthcare access across the country. Some of these schemes are:

1. Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY)

Overview: Launched in 2018, PM-JAY is India’s flagship publicly funded health insurance program. It provides coverage of ₹5 lakh per family per year for secondary and tertiary hospitalisation, targeting over 10 crore poor and vulnerable families identified via the Socio-Economic Caste Census (SECC).

Benefits: The scheme allows cashless treatment at empanelled hospitals, covering more than 1,900 procedures, including critical surgeries like heart operations, cancer treatment, and organ transplants. PM-JAY also includes financial protection against catastrophic health expenses, reducing the risk of families falling into debt due to medical emergencies.

Recent Updates: In 2024, the scheme expanded its eligibility to include all senior citizens aged 70+, regardless of income, ensuring elderly citizens have access to healthcare without financial barriers. PM-JAY also integrates with state-run programs, allowing flexibility for states to provide top-up benefits, making it a comprehensive national safety net.

Suggested read: Private Vs Public Hospitalisation Costs in India

2. Central Government Health Scheme (CGHS)

Overview: Established in 1954, CGHS provides comprehensive healthcare to central government employees, pensioners, Members of Parliament, and select autonomous bodies. It operates through wellness centres and empanelled hospitals in over 70 cities.

Benefits: CGHS offers outpatient care, specialist consultations, diagnostic tests, and hospitalisation. It ensures structured and reliable healthcare, with preventive, curative, and wellness services for the beneficiaries. The scheme also promotes regular health check-ups and early detection of diseases, improving long-term health outcomes for government employees and pensioners.

Significance: By providing easy access to medical services, CGHS has become a model of organised healthcare delivery. It demonstrates how a well-structured government program can offer both quality and comprehensive coverage while maintaining affordability for employees and retirees.

3. Employees’ State Insurance Scheme (ESIS)

Overview: ESIS operates under the Employees’ State Insurance Act, 1948, offering contributory health coverage for workers in factories and establishments earning up to ₹21,000 per month. The program covers employees and their dependents, ensuring healthcare for millions of working-class families.

Benefits: ESIS provides medical care, maternity benefits, sickness pay, disability compensation, and rehabilitation. Care is delivered through a network of ESIC hospitals, dispensaries, and wellness centres, offering both inpatient and outpatient services. The scheme also helps reduce absenteeism and improve productivity by supporting worker health.

Significance: As one of India’s largest social security programs, ESIS creates a financial and healthcare safety net for organised sector workers, bridging gaps in access to care and promoting equity in health services.

Recommended read: Employer Employee Insurance

How State-Sponsored Health Insurance Schemes Work and Their Integration with PM-JAY?

State-sponsored health insurance schemes are designed to protect low-income families, vulnerable populations, and residents not fully covered under central schemes. Each state identifies eligible beneficiaries using local databases, socio-economic surveys, or poverty line criteria. Once enrolled, families receive a health insurance card or digital ID that allows them to access cashless treatment at empanelled hospitals, including both government and private facilities.

Coverage typically includes secondary and tertiary care, such as major surgeries, cancer treatment, cardiac procedures, and organ transplants. Some schemes also provide additional benefits, such as transport reimbursement, follow-up care, and higher coverage for specific groups like women or senior citizens.

Many states converge their programs with PM-JAY, allowing beneficiaries to avail central and state benefits simultaneously. For example, states like Odisha (BSKY) and Tamil Nadu (CMCHIS) offer top-up benefits on top of the ₹5 lakh PM-JAY coverage, ensuring families receive more comprehensive financial protection.

In some states, the state scheme runs in parallel for families who are not eligible for PM-JAY or require coverage beyond the central scheme’s limits. The integration ensures seamless portability, meaning a beneficiary can access treatment in any empanelled hospital across the country, whether under the state scheme or PM-JAY.

This combined model allows states to address local healthcare priorities, enhance coverage for vulnerable populations, and reduce out-of-pocket expenses, while maintaining alignment with India’s national goal of Universal Health Coverage (UHC).

State-Sponsored Health Insurance Schemes

1. Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY) – Maharashtra

MJPJAY targets low-income families in Maharashtra, providing financial protection for hospitalisation and treatment of serious illnesses. The scheme offers coverage of up to ₹1.5 lakh per family per year for procedures like cardiac surgeries, cancer treatment, and critical care.

Families can avail cashless treatment at empanelled public and private hospitals. MJPJAY complements PM-JAY for eligible families while also addressing specific local healthcare needs.

2. Dr. YSR Aarogyasri – Andhra Pradesh & Telangana

The Dr. YSR Aarogyasri scheme provides up to ₹5 lakh per family per year for catastrophic illnesses such as cancer, heart surgeries, and kidney transplants. It ensures cashless treatment at government and private empanelled hospitals.

The program focuses on high-cost treatments that are often unaffordable for low-income households. Aarogyasri also includes provisions for follow-up care, transport reimbursement, and post-treatment support.

3. Chief Minister’s Comprehensive Health Insurance Scheme (CMCHIS) – Tamil Nadu

CMCHIS offers coverage up to ₹5 lakh per family for over 1,000 medical procedures, including surgeries, cancer treatment, and chronic disease care. Eligible families are primarily below the poverty line or vulnerable communities.

The scheme allows cashless treatment at empanelled hospitals, both public and private. Tamil Nadu’s program emphasises speedy claim processing and a wide hospital network, making it easier for families to access treatment without financial hurdles.

4. Biju Swasthya Kalyan Yojana (BSKY) – Odisha

BSKY provides ₹5 lakh coverage per family, with a higher limit of ₹10 lakh for women. It covers serious illnesses, surgeries, and critical care across empanelled hospitals. The scheme targets low-income families and includes benefits such as transportation reimbursement and follow-up care.

BSKY complements PM-JAY in Odisha, ensuring universal coverage for vulnerable populations, while also addressing gender-specific health needs through additional financial protection for women.

Quick read: Top 9 Health Insurance Plans for Family

5. Swasthya Sathi – West Bengal

Swasthya Sathi is a state-run health insurance program offering a family floater coverage of ₹5 lakh per family. It focuses on both rural and urban populations, particularly economically weaker sections. The scheme allows cashless treatment at empanelled hospitals for secondary and tertiary care.

Unlike PM-JAY, Swasthya Sathi is fully administered by the state, giving West Bengal flexibility to design benefits according to local health priorities. It includes transport support and access to quality facilities, ensuring families can seek timely treatment without financial stress.

6. Mukhyamantri Amrutum (MA) Yojana – Gujarat

The MA Yojana provides up to ₹5 lakh per family for catastrophic illnesses to economically weaker sections in Gujarat. It allows cashless treatment at government and private hospitals and covers surgeries, cancer care, and critical interventions.

The scheme complements PM-JAY by covering additional families and procedures specific to Gujarat. It also emphasises speedy claim settlement and network expansion, improving accessibility for rural and urban beneficiaries alike.

7. Karunya Arogya Suraksha Padhathi – Kerala

Kerala’s Karunya Arogya Suraksha Padhathi provides coverage for serious illnesses, including cancer, kidney disease, and heart conditions. The scheme targets low-income families and offers cashless treatment at empanelled hospitals across the state.

It focuses on both inpatient care and post-treatment support, including follow-up care. By combining financial protection with accessible hospital networks, the scheme ensures that vulnerable populations receive timely, high-quality care without catastrophic out-of-pocket expenses.

Some Recent Updates To The PM-JAY Scheme

• Delhi joins PM-JAY: In April 2025, Delhi signed an MoU with the National Health Authority, integrating with PM-JAY. Until then, residents depended largely on fragmented state-level initiatives.
• Senior citizen inclusion: As of late 2024, all Indians aged 70+ qualify for PM-JAY benefits, regardless of their income status.
• Digital push: The Ayushman Bharat Digital Mission (ABDM) is linking insurance with digital health records for better portability and transparency.

How Do Government-Led Health Insurance Schemes Work?

• Cashless Hospitalisation: Beneficiaries get treated without upfront payments at empanelled hospitals.
• Empanelment: Both private and government hospitals can be part of the network, subject to standards.
• Portability: PM-JAY allows pan-India treatment, meaning a cardholder in Bihar can get treated in a hospital in Delhi.
• Awareness Drives: States and the NHA conduct card distribution and enrollment camps.

Also read: Top 10 Health Insurance Companies in India

The Road Ahead

India’s journey towards universal health coverage will depend on strengthening these schemes:

• Integration of Central and State Schemes: Avoid duplication and ensure seamless portability.

• Improved Monitoring: Digital dashboards and AI-based fraud detection to reduce misuse.

• Focus on Primary Care: Expanding Health & Wellness Centres under Ayushman Bharat to reduce hospitalisation needs.

• Private Sector Participation: Encouraging more hospitals to join the network by revising package rates.

• Awareness Campaigns: Targeted outreach in rural areas to increase utilisation.

Conclusion

Government-sponsored health insurance schemes in India have created a critical safety net for millions, reducing the risk of catastrophic medical expenses. From PM-JAY’s ₹5 lakh coverage for vulnerable families to state-led initiatives like Aarogyasri, CMCHIS, and Swasthya Sathi, these programs have made healthcare more accessible and equitable. While challenges remain—such as awareness gaps, hospital network limitations, and claim settlement delays—these schemes represent a major step toward India’s goal of universal health coverage.

At the same time, private solutions like Onsurity are helping democratize healthcare for employees of startups, SMEs, and larger organisations. Onsurity provides comprehensive, affordable, and scalable health and wellness benefits, bridging gaps that government schemes may not fully cover. By offering preventive care, wellness programs, and digital-first healthcare access, Onsurity ensures that more people can access quality healthcare without financial stress, complementing public schemes and empowering organisations to effectively care for their teams.

Together, government and private initiatives are shaping a future where healthcare is not a privilege but a right available to all Indians, improving both health outcomes and financial security.

FAQs: