Ayushman Bharat reaches Bengal, Swasthya Sathi to stay, as will most medical expenses
Telegraph | 13 May 2026
The arrival of the Centre’s Ayushman Bharat in Bengal, alongside the continuation of the state-run Swasthya Sathi, has reopened a familiar question: can government-backed insurance schemes compensate for years of underinvestment in state-run hospitals, medical colleges and rural healthcare infrastructure?
Experts The Telegraph Online spoke to said that while both schemes offer Rs 5 lakh coverage at empanelled private hospitals, they fail to address some of the biggest out-of-pocket medical expenses affecting the poor — outpatient department (OPD) treatment, medicines and diagnostic tests.
Hence, around 60 to 70 per cent of medical expenses that a middle-class or poor family incurs in a year are out of their own pocket.
Medical inflation in India stands at an alarming 12-15 per cent annually in 2026, significantly outpacing general inflation of 3-4 per cent and remaining among the highest in Asia.
While government insurance schemes may reduce the immediate financial burden on patients, they do little to address structural shortcomings such as overcrowded hospitals, shortage of beds and specialists, inadequate rural healthcare and the rising dependence on private hospitals, the experts said.
“Government-backed medical insurance is not the ultimate solution to healthcare problems,” said Dr Subarna Goswami, public health specialist and a prominent face of Kolkata’s medical community.
“The focus should also be on strengthening government facilities, especially primary healthcare centres, along with state-run district hospitals.”
Emergency medical cases such as strokes and accidents, which can push Indian families into financial ruin, along with the exclusion of certain diseases from coverage reflect gaps in the insurance schemes, pointed out Dr Manas Gumta, professor of general surgery, Bankura Sammilani Medical College.
While Swasthya Sathi and Ayushman Bharat are similar in structure, the Centre’s scheme is more restrictive in terms of eligibility.
“Ayushman Bharat has several exclusion criteria. If a person owns a pucca house or a motor vehicle, they may not be eligible,” Goswami said, contrasting it with the Mamata Banerjee government’s Swasthya Sathi scheme, designed with a broader coverage base.
Bengal is not an outlier. Public health experts have over the years flagged India’s low public spending on healthcare.
“The WHO recommends that the Centre spend at least 5 per cent of its GDP on healthcare. For states, the expenditure should be up to 10 per cent. However, the healthcare allocation as a percentage of the state gross domestic product in Bengal has declined over the years, while at the national level spending has hovered around 2 per cent,” Goswami said.
He pointed out that successive governments have increasingly shifted from being healthcare providers to financiers by relying heavily on insurance-based models that channel patients towards private hospitals.
Noting a shift from predecessors in the Narendra Modi government’s policies, Goswami said: “Since Independence, the government has primarily been a healthcare provider. But from 2014 onwards, both the Centre and the states have increasingly reduced their role to that of financiers.”
While medical insurance schemes are a welcome move for the common man, they cost the government exchequer more because insurance premiums include a sizeable profit margin for private insurance companies, experts said.
“If the government focuses more on upgrading its own facilities, a lot of money can be saved,” Goswami said
Medical practitioners argued that district hospitals and state-run medical colleges should be equipped with better facilities to reduce Bengal’s heavy dependence on Kolkata-centric healthcare.
“Why should a patient from a rural area have to travel all the way to Kolkata for a medical procedure?” said Dr Narayan Banerjee, internal medicine specialist at Apollo Multispeciality Hospitals, Kolkata.
Experts also pointed to what they described as a paradox in state-backed insurance schemes.
“If a patient undergoes treatment at a government hospital where services are otherwise free, the amount is still deducted from the patient’s Swasthya Sathi balance,” Goswami said.
Private hospitals, too, have frequently clashed with Bengal’s erstwhile Trinamool Congress government over reimbursement rates under Swasthya Sathi.
Narayan Banerjee said several hospitals were reluctant to admit medicine and critical care patients because reimbursements often fell far short of actual treatment costs.
“In some critical pneumonia cases, top-tier private hospitals received barely Rs 3,300 for ICU treatment. Smaller category hospitals got even less. Naturally, many hospitals hesitated to admit such patients unless there was direct government intervention,” he pointed out.
“Private hospitals need to earn profits. But in these critical cases, they had to face a loss, as breaking even was also not possible. Whoever devised the financial structure of the scheme had an impractical mindset,” he said.
Around 75 to 80 per cent of private hospitals in Bengal are empanelled under Swasthya Sathi, but complaints about patients being denied beds or admission have persisted.
Banerjee said the scheme worked relatively well for high-cost procedures such as cancer and orthopaedic treatment, but reimbursement rates for departments such as medicine and critical care remained inadequate.
Goswami cited Kerala and Tamil Nadu as examples where strong public healthcare systems coexist with insurance support for specialised private treatment.
“They invested heavily in government hospitals, specialised medical colleges and decentralised healthcare delivery. Insurance schemes there supplement the public system rather than replace it,” he added.
Goswami said that a return to manufacturing cost-based pricing for medicines, along with the implementation of the 1975 Hathi Committee recommendations and stricter quality control for generic drugs could substantially reduce the exorbitant out-of-pocket medical expenses borne by citizens.