11 Types of Government 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.

The government-sponsored health insurance schemes focus on ensuring financial protection and quality healthcare for all by offering:

• Low or No Premiums: Schemes that are fully funded by the government or that have minimal premium contributions to make them affordable.
• Cashless Treatment: Beneficiaries can access treatments without upfront payments, reducing the financial strain during medical emergencies.
• Extensive Coverage: From hospitalisation and diagnostics to maternity care and critical illnesses, these schemes cover a wide range of medical expenses.
• Empanelled Hospitals:  These schemes focus on a mix of public and private hospitals to ensure better healthcare access across urban and rural areas.

Let’s explore India’s 11 major government health insurance schemes and understand how they contribute to achieving universal health coverage for all.

Why Are Government Health Insurance Schemes Essential?

Health insurance coverage is quite common for India’s urban areas or the affluent class. However, for an average Indian household, health insurance is a privilege. They usually rely on out-of-pocket expenses. Oftentimes, they are just one serious medical incident away from slipping into a financial burden or debt.

As per NitiAyog’s records, 30% of the population, or 40 crore individuals, still lack financial coverage of any kind for their health. In this scenario, government health insurance schemes act as a safety net for these individuals, helping them in several ways, such as:

1. Covering Healthcare Costs

Medical and hospital expenses often exceed the family’s savings. The costs of medical treatment, such as medical consultations, diagnostics, hospitalisation, and medication, are steadily rising.

Government health insurance schemes help individuals bear these costs and protect them from any financial strain.

2. Addressing Healthcare Gap

India faces a significant healthcare gap, with disparities in access and quality of care between urban and rural areas and between different socioeconomic groups.

Government health insurance schemes are crucial in bridging this gap by extending coverage to underserved populations. They ensure that even those who cannot afford private health insurance have access to essential medical services.

3. Supporting Universal Health Coverage

Universal health coverage (UHC) ensures that all individuals and communities receive the full spectrum of essential health services they need without suffering financial hardship.

By providing health insurance to low-income and underprivileged households, government healthcare schemes contribute to the national goal of achieving health coverage for all.

4. Promoting Preventive Healthcare

Most health insurance schemes in India also include provisions for preventive healthcare services, such as vaccinations, health check-ups, and family planning services. These encourage individuals to seek timely medical attention, leading to early diagnosis and timely treatment of illnesses.

This, in turn, can reduce the severity of diseases and improve overall health indicators.

Also, read: Preventive Hleath Checkup to Save Your Cost

Categorisation of Government Health Insurance Schemes

Government health insurance schemes in India can be broadly classified into three categories:

Types of Health Insurance Schemes in India

In addition to the categorisation of health insurance schemes in India, there are specific insurance plans that are based on the type of coverage they offer. These can include:

1. Comprehensive or Full Coverage Health Scheme

Ayushman Bharat, while focused on secondary and tertiary care, falls within this category due to its broad range of covered procedures.

2. Limited Coverage Scheme

These schemes focus on providing coverage for specific medical conditions, treatments, or procedures. They might target particular diseases, surgical interventions, or hospitalisation related to specific events (like accidents).

State-specific schemes, or those targeting specific occupational hazards, often fall into this category.

3. Top Up / Supplementary Schemes

These schemes are designed to supplement existing health insurance coverage, whether it’s a government scheme or a private plan. They provide additional financial protection beyond the limits of the primary policy.

For example, if an employee already has insurance coverage from his organisation, this can be supplemented with a government health insurance scheme or private scheme to get additional benefits.

4. Critical Illness Schemes

These schemes provide a lump-sum payment upon the diagnosis of a specified critical illness, such as cancer, heart attack, or stroke. This lump sum can be used for treatment expenses as well as other related costs such as rehabilitation or loss of income.

While some government schemes might include coverage for specific critical illnesses within their broader coverage, dedicated critical illness schemes allow individuals to get complete care for their specific illnesses.

5. Hospitalisation-Only Schemes

As the name suggests, these schemes primarily cover hospitalisation expenses. They might not cover outpatient consultations, diagnostic tests, or other medical expenses outside of hospitalisation.

Relevant Read: Types of Health Insurance in India

Central Government Health Insurance Schemes

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

Pradhan Mantri Jan Aroga Yojana, or PM-JAY, is the world’s largest publicly funded health insurance scheme. It aims to provide financial protection against catastrophic health expenditures to over 100 million poor and vulnerable families.

The scheme offers a health cover of up to Rs. 5 lakh per family per year for secondary and tertiary hospitalisation.

Key Features & Benefits

• Provides annual health coverage of up to Rs. 5 lakh per family.
• Covers over 1,500 medical procedures, including pre and post-hospitalisation expenses.
• Cashless treatment is available at empanelled hospitals across India.

Eligibility & Target Beneficiaries

• Families identified under the Socio-Economic Caste Census (SECC) 2011 are eligible.
• Senior citizens above age 70 are covered under this scheme, irrespective of income categorisation.

2. Employees’ State Insurance Scheme (ESIS)

ESIS provides financial protection to workers and their families against sickness, maternity, disablement, and death due to employment injury. It is a contributory scheme, with both employers and employees contributing to the fund.

Key Features & Benefits

• Offers medical care, disability benefits, maternity benefits, and unemployment allowances.
• Covers self, spouse, and dependent children.
• Treatment is available at ESIS hospitals and empanelled private hospitals.

Eligibility & Target Beneficiaries

• Employees earning up to Rs. 21,000 per month are eligible for the benefit. Disabled employees are eligible for up to Rs. 25,000 per month.
• Employers and employees contribute to the scheme through monthly deductions.

3. Central Government Health Scheme (CGHS)

The Central Government Health Scheme (CGHS) provides comprehensive healthcare services to serving and retired Central Government employees and their families. It covers a wide range of medical services, including OPD treatment, hospitalisation, and specialised care.

Key Features & Benefits

• Covers outpatient care, hospitalisation, and wellness treatments.
• Provides government access and empanelled private hospitals.
• Includes cashless treatment facilities at CGHS wellness centres.

Eligibility & Target Beneficiaries

• Available to central government employees, pensioners, and certain autonomous bodies.
• Includes members of parliament, judges, and journalists.

Recommended read: Top 5 Monthly Health Insurance Plans in India

State Government Health Insurance Schemes

In addition to the schemes offered by the government of India, many state governments also run various health insurance programs tailored to the specific needs of their populations. These schemes often complement the central schemes and provide an additional layer of coverage.

Here are some of the top state government health insurance schemes that you should know of:

1. Aarogyasri (Andhra Pradesh & Telangana)

Aarogyasri is a health insurance scheme run by the governments of Andhra Pradesh and Telangana. It aims to provide financial assistance to Below Poverty Line (BPL) families for specific medical treatments and surgeries.

Key Features & Benefits

• Covers hospital expenses up to Rs. 5 lakh per year per family.
• Includes treatments for serious ailments like cancer, kidney diseases, and neurosurgeries.
• Cashless treatment at network hospitals.

Eligibility & Target Beneficiaries

• Families with White Ration Cards (BPL families).
• Beneficiaries identified through Aadhaar-linked data.

2. Mahatma Jyotiba Phule Jan Arogya Yojana (Maharashtra)

This scheme, run by the Maharashtra government, aims to provide health insurance coverage to a large segment of the population. It offers coverage for a wide range of medical treatments, surgeries, and hospitalisation expenses.

Key Features & Benefits

• Covers hospitalisation expenses up to Rs. 1.5 lakh per family per year.
• Benefits include cardiac surgeries, cancer treatments, and kidney transplants.
• Provides free treatment at empanelled hospitals.

Eligibility & Target Beneficiaries

• Families with an annual income of up to Rs. 1 lakh.
• Priority to farmers, ration cardholders, and weaker sections.

3. Karunya Health Scheme (Kerala)

The Karunya Health Scheme is an initiative by the Kerala government to provide financial assistance to families facing critical illnesses and accidents. Its goal is to reduce the financial burden of expensive medical treatments.

Key Features & Benefits

• The scheme offers financial assistance of up to Rs. 2 lakh per beneficiary for specified medical conditions.
• Beneficiaries can avail of cashless hospitalisation at empanelled government and private hospitals.
• Covers treatment costs for critical illnesses, including organ transplants, cancer therapies, and major surgeries.
• The Kerala state government fully funds the scheme, so beneficiaries do not have to pay a premium.

Eligibility & Target Beneficiaries

• Available to below-poverty-line (BPL) families and select lower-income groups.
• Beneficiaries must be permanent residents of Kerala.
• Individuals with chronic or life-threatening illnesses requiring expensive treatments can apply.
• Applicants must provide proof of valid income and residence to qualify for the scheme.

4. Chief Minister’s Comprehensive Health Insurance Scheme (Tamil Nadu)

This scheme, run by the Tamil Nadu government, provides health insurance coverage to a large segment of the population. It aims to offer quality healthcare services to those in need.

Key Features & Benefits

• Offers coverage of up to Rs. 5 lakh per year per family.
• Covers over 1,000 medical treatments and surgeries.
• Treatment is available at government and private hospitals.

Eligibility & Target Beneficiaries

• Families with an annual income of less than Rs. 72,000.
• Must be residents of Tamil Nadu.

Quick read: Top 10 Health Insurance Plans for Family

Specialised Schemes for Specific Sectors or Groups

Beyond the broader central and state government schemes, India also offers specialised health insurance programs designed for specific sectors or groups within the population. These schemes recognise the unique healthcare needs of particular demographics or occupational groups.

Some of the major insurance schemes in this category include:

1. Aam Aadmi Bima Yojana (AABY)

AABY was a social security scheme aimed at providing death and disability cover to rural landless households. While it has been subsumed under other schemes, it’s worth mentioning for its historical significance.

It aimed to provide affordable insurance to a vulnerable segment of the population.

2. Janashree Bima Yojana (JBY)

JBY was a microinsurance scheme that provided life and disability coverage to people below the poverty line. It was designed to offer affordable insurance to a large segment of the underprivileged population.

Like AABY, it has been subsumed but is important in the history of social security schemes.

3. Universal Health Insurance Scheme (UHIS)

UHIS aimed to provide affordable health insurance coverage to individuals and families, particularly those in the informal sector. It aimed to increase access to healthcare for those not covered by other formal insurance schemes.

Key Features & Benefits

• Provides up to Rs. 30,000 per family for medical treatments, including hospitalisation and surgical procedures.
• Offers Rs. 25,000 in case of accidental death of the primary insured and Rs. 50 per day (for up to 15 days) for loss of earnings due to hospitalisation.
• The premium for individuals is as low as Rs. 365 per year, while families of five can be insured for Rs. 548 per year (with government subsidies available for BPL families).
• Unlike many private insurance schemes, UHIS provides coverage for pre-existing diseases after a waiting period.
• Beneficiaries can avail of treatment at empanelled government and private hospitals across India.

Eligibility & Target Beneficiaries

• Primarily aimed at BPL families, but lower-income households can also apply.
• Available to individuals aged 5 to 70 years.
• Coverage can be extended to a spouse and up to three dependent children.
• Applicants must provide income proof, a BPL certificate, and identity documents to enrol in the scheme.

4. Varishta Mediclaim Policy

This policy is designed specifically for senior citizens. It provides health insurance coverage to individuals aged 60 and above, addressing their unique healthcare needs.

Key Features & Benefits

• This policy offers coverage up to Rs. 2 lakh for critical illnesses and Rs. 1 lakh for general hospitalisation expenses.
• After a waiting period, the policy covers pre-existing conditions like diabetes and hypertension with additional premiums.
• Covers daycare procedures and home-based treatment when hospitalisation is not feasible.
• Provides reimbursement for ambulance expenses up to Rs. 1,000 per hospitalisation.
• Premiums paid under the policy qualify for tax deductions under Section 80D of the Income Tax Act

Eligibility & Target Beneficiaries

• Available for individuals aged 60 to 80 years (renewable up to 90 years).
• The applicant must undergo a medical examination before enrollment (costs are reimbursed if the policy is approved).
• No requirement for a pre-policy medical check-up if insured continuously for three years under a similar policy.

Suggested read: Top 10 Life Insurance Companies in India

Benefits of Government Health Insurance Schemes

Since the government health insurance scheme is uniquely designed for a target group that falls in the lower-income or below-poverty line category, it provides several benefits, such as:

1. Focus on the marginalised population

A primary distinction of government schemes is their focus on reaching vulnerable and underserved populations, particularly those below the poverty line.

These schemes are often designed to provide a safety net for those who cannot afford private insurance, ensuring access to essential healthcare regardless of socioeconomic status.

2. Reduced or No Premiums

Many government health insurance schemes are either entirely government-funded or heavily subsidised, meaning beneficiaries pay little to no premium.

This is a crucial benefit for low-income families, making healthcare accessible without adding a significant financial burden.

3. Emphasis on essential healthcare

While some private insurance plans might offer extensive coverage for a wide range of medical services, government schemes often prioritise essential healthcare services.

They focus on providing coverage for common illnesses, surgeries, and hospitalisation, ensuring access to fundamental medical care. This focus helps maximise the impact of limited resources and addresses the most pressing healthcare needs of the target population.

4. Government backing & stability

Government health insurance schemes are backed by the government, providing a sense of stability and long-term commitment.

This is a key difference from private insurance, where the financial stability of the insurer is a factor to consider.

Also, read: Top 5 Group Medical Insurance for Family

Comparison Between Regular and Government Health Insurance Schemes in India

While both regular (private) health insurance and government health insurance schemes aim to provide financial protection against healthcare expenses, they differ in several key aspects.

Here’s a look at the key differences:

How to Apply for Government Health Insurance Schemes

To apply for a government health insurance scheme in India, you must have proper documents and meet the specific eligibility criteria. Here’s a step-by-step guide to help you navigate the application process:

General Eligibility Criteria

While each scheme has its own set of eligibility requirements, the general criteria for most government health insurance schemes include:

• Citizenship: The applicant must be an Indian citizen.
• Income Criteria: Some schemes are targeted toward low-income groups and require proof of financial status.
• Occupation-Based Eligibility: Certain schemes, such as the Employees’ State Insurance Scheme (ESIS), are designed for specific sectors.
• State-Specific Requirements: Some schemes are available only to residents of a particular state.
• Social Category: SC/ST and other disadvantaged groups may have special provisions in some schemes.

Documents Required

To apply for a government health insurance scheme, applicants generally need to provide the following documents:

• Aadhaar Card (for identity verification)
• Income Certificate (if applicable)
• Ration Card (for household verification)
• Address Proof (Utility bill, voter ID, or Aadhaar)
• Employment Proof (for schemes related to workers and employees)
• Bank Account Details (for premium deductions or reimbursements)
• Medical Certificates (if required for specific conditions)

Relevant read: Documents Required for Health Insurance

Conclusion

Given India’s large population, government health insurance schemes ensure accessible and affordable healthcare for millions of citizens.

From the nationwide Ayushman Bharat scheme to state-specific initiatives and specialised programs, we’ve explored the different categories of schemes, their unique features, eligibility criteria, and benefits. Understanding these schemes is the first step toward securing your health and financial well-being.

In addition to these government initiatives, employers can take responsibility for their employees by providing employee wellness or group health insurance facilities.

Onsurity offers comprehensive healthcare solutions for businesses. It empowers SMEs, MSMEs, and startups to provide their employees with affordable and holistic health benefits. With the addition of flexible wellness products focused on employee wellness, we help businesses boost productivity, retain top talent, and create happier, healthier workforces.

If you’re an employer or an HR professional looking to enhance your employee benefits with affordable, comprehensive healthcare coverage, explore our wellness plans today and provide your team with the health security they deserve.

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