On 7 August the Rajya Sabha’s Standing Committee on Health presented a report on how affordable healthcare is in India. Its central finding is that about 30% of people have no structured financial protection against health costs, and its central proposal is to extend Ayushman Bharat PM-JAY, which pays for hospital admissions, to doctor visits, tests and medicines. It also wants family cover raised from Rs 5 lakh to Rs 10 lakh a year and government health spending put on a time-bound path to 2.5% of GDP.

This blog’s piece on India’s two tracks of health cover looked at how PM-JAY and private insurance have grown. This piece looks at the gap the committee is pointing to: where out-of-pocket money actually goes, why most of it falls outside PM-JAY, and roughly what covering outpatient care would cost.

What the committee found and asked for

The 30% figure echoes NITI Aayog’s 2021 estimate that at least 30% of the population, about 40 crore people, were a “missing middle” with no health insurance: mostly self-employed and informal workers too well-off for PM-JAY and outside employer schemes. Since then PM-JAY has been extended to everyone over 70 and to some groups of workers, so the share may now be lower; the committee did not publish a new estimate. The committee also found that outpatient care in private facilities costs about 5 times as much as in public ones.

Out-of-pocket spending stopped falling

India’s National Health Accounts for 2022-23, released in May 2026, put total health spending at Rs 8.81 lakh crore. Households paid 43.4% of it directly, about Rs 3.82 lakh crore, or about Rs 2,764 for every person in the country. That share had fallen steadily for a decade, but rose in 2022-23 from 39.4% as government spending fell after the pandemic years. Government health spending was 1.48% of GDP on the new GDP series.

Pharmacies alone took 21.19% of current health spending, about Rs 1.62 lakh crore, nearly all of it paid by households. The NSS survey of 2025 shows the same pattern from the household side: government insurance now covers 45.5% of rural and 31.8% of urban people, but the average out-of-pocket cost of a hospital stay was Rs 34,064 (median Rs 11,285), and a NITI Aayog-commissioned study found that 65% of PM-JAY beneficiaries still paid something themselves, mainly for medicines, tests and transport.

Why PM-JAY misses most of it

PM-JAY has issued 48.51 crore Ayushman cards and paid for about 13.25 crore hospital admissions worth Rs 2.03 lakh crore since 2018, or about Rs 15,300 an admission and about Rs 25.4 thousand crore a year. But hospital stays are rare and doctor visits frequent. The committee puts the outpatient share of health spending at nearly 70%, and an NIPFP analysis of the 2014 NSS survey found that households spent more than twice as much on outpatient care as on hospital care over a year, because they need it far more often. A scheme that pays only for admissions cannot reach most of what households pay.

What outpatient cover might cost

This is a rough, illustrative calculation, not a costing. It takes out-of-pocket spending per person from the 2022-23 health accounts (Rs 2,764), assumes 70% of it is outpatient care (about Rs 1,935 a person), and applies it to PM-JAY’s roughly 55 crore eligible people. Because poorer households spend less, the low case assumes they spend half the national average. The answer is Rs 0.5–1.1 lakh crore a year in 2022-23 prices, 2.1 to 4.2 times what PM-JAY pays for hospital care in an average year, and many times the Centre’s Rs 9,500 crore PM-JAY budget for 2026-27.

Set against the committee’s other target, though, it is affordable. Raising government health spending from 1.48% to 2.5% of GDP would have meant about Rs 2.66 lakh crore more a year at 2022-23 GDP, so outpatient cover for PM-JAY’s eligible population would take 20–40% of that increase. How it is delivered matters as much as the money. Outpatient claims are small and numerous, so paying for them through insurance claims can cost a lot to administer; providing free medicines and tests at public facilities such as Ayushman Arogya Mandirs reaches the same spending without a claim for each visit. The question of what drugs cost at the pharmacy counter, the subject of a separate committee report on drug pricing, bears on both routes.

What would fix this

• The National Health Authority should publish an annual split of out-of-pocket spending by beneficiaries and non-beneficiaries of PM-JAY, by outpatient care, medicines, tests and hospital stays, so the scheme’s effect on what families pay is measured rather than assumed.
• Before any outpatient extension, the Centre should pilot two models in comparable districts, insurance reimbursement and free medicines and diagnostics at public facilities, and publish the cost per person and the change in out-of-pocket spending for each.
• The National Health Accounts should be published within two years of the year they cover, not three, and should report outpatient and inpatient spending separately.
• NITI Aayog should update its 2021 “missing middle” estimate now that PM-JAY covers everyone over 70, so the size of the uncovered group is known.

These are proposals from this blog, not recommendations any agency has adopted.

What this piece could not establish

The committee report, the National Health Accounts and the NSS report could not be opened directly; figures come from the PRS summary, news reports and summaries of those documents. The 70% outpatient share is the committee’s figure as cited in a parliamentary question; the health accounts’ own outpatient and inpatient split was not found. PM-JAY’s eligible population is reported as about 55 crore for the central scheme and 60 crore or more with state extensions; this piece uses 55 crore. The outpatient cost is in 2022-23 prices, ignores any rise in use once care is free, and assumes the poorer half spends between half and all of the national average per person. The average PM-JAY admission and the yearly average are this blog’s division of cumulative figures over eight years.

Sources and caveats

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.