Micro Health Insurance & Pradhan Mantri Jan Arogya Yojana (PMJAY)
Micro health insurance is small, simple, low-premium cover; PM-JAY is the government-funded hospitalisation scheme under Ayushman Bharat. This lesson covers what PM-JAY provides, who is eligible, how it is funded and how it differs from a commercial policy.
Micro health insurance
Micro health insurance is low-premium cover with a small sum insured and simple terms, meant to be within reach of households with modest incomes. It is commercial insurance: an insurer issues it for a premium.
Until 31 March 2024 micro insurance had its own regulations, made in 2015. Since 1 April 2024 it comes under the IRDAI (Insurance Products) Regulations, 2024, which replaced them. Limits and timelines quoted from the 2015 regulations are therefore out of date.
What PM-JAY provides
Pradhan Mantri Jan Arogya Yojana (PM-JAY) is the health-cover arm of Ayushman Bharat and was launched on 23 September 2018. It gives cover of ₹5 lakh per family per year, on a floater basis, for secondary and tertiary hospitalisation. Treatment is cashless at empanelled hospitals.
There is no cap on the size of the family or the age of its members. There is no waiting period for pre-existing diseases: conditions covered by the scheme are covered from the first day. The beneficiary pays no premium.
Who is covered
Families were originally identified from the Socio-Economic Caste Census (SECC) 2011, using its deprivation and occupation criteria. It was never a scheme a household could simply buy into. States have since widened coverage by adding groups.
From 29 October 2024, Ayushman Vay Vandana extends PM-JAY to every citizen aged 70 or above, irrespective of income, with cover of ₹5 lakh a year. Seniors in families already covered by PM-JAY receive it as a separate top-up of ₹5 lakh for themselves.
Who pays
The cost is shared between the Centre and the States. The ratio is 60:40 for most States and 90:10 for the North-Eastern and Himalayan States; for Union Territories without a legislature the Centre bears the whole cost.
This is the central difference from commercial insurance. A commercial policy, micro or otherwise, is priced and paid for by the policyholder and may apply a waiting period for pre-existing diseases of up to 36 months, the cap since 1 April 2024. PM-JAY is paid for by government and applies none.
Rules at a glance
Illustration: a family and a grandmother
The Yadav family in a village in Bihar is a PM-JAY beneficiary family of six, including a 72-year-old grandmother. The ₹5 lakh family cover is a floater: it is shared by all six in a year, and no member is left out for being too old or because the family is large.
Since 29 October 2024 the grandmother also has a separate top-up of ₹5 lakh a year for herself under Ayushman Vay Vandana. Her neighbour, a retired teacher aged 74 whose family was never a PM-JAY beneficiary family, is covered for ₹5 lakh a year under the same extension, irrespective of income.
Key points
- Micro health insurance is low-premium commercial cover with a small sum insured; since 1 April 2024 it falls under the IRDAI (Insurance Products) Regulations, 2024.
- PM-JAY was launched on 23 September 2018 as part of Ayushman Bharat.
- It gives ₹5 lakh per family per year for secondary and tertiary hospitalisation, cashless at empanelled hospitals.
- There is no cap on family size or age, no waiting period for pre-existing diseases and no premium from the beneficiary.
- Families were originally identified from SECC 2011 deprivation and occupation criteria; States have widened coverage.
- Since 29 October 2024 Ayushman Vay Vandana covers every citizen aged 70 or above irrespective of income.
Common misunderstandings
- PM-JAY is not an insurance policy that the beneficiary buys: it is government-funded and no premium is collected from the beneficiary.
- The ₹5 lakh is not for each member: it is per family per year on a floater basis, apart from the separate senior top-up.
- PM-JAY does not cover every kind of medical expense: it is for secondary and tertiary hospitalisation at empanelled hospitals.
- Micro insurance is not governed by the 2015 regulations any more: the 2024 product regulations replaced them from 1 April 2024.
Questions people ask
Is there a limit on the number of family members under PM-JAY?
No. There is no cap on family size or on the age of members.
Does a person with an existing illness have to wait?
No. PM-JAY applies no waiting period for pre-existing diseases.
Is micro health insurance the same as PM-JAY?
No. Micro health insurance is commercial cover issued by an insurer for a premium; PM-JAY is a government-funded scheme.
What this lesson relies on
- National Health Authority — Ayushman Bharat PM-JAY scheme design; Ayushman Vay Vandana (29 October 2024)
- IRDAI (Insurance Products) Regulations, 2024
- IRDAI Master Circular on Health Insurance Business (29 May 2024) — waiting periods
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.