Health Security At The Heart Of Viksit Odisha

Manorama Bakshi
Arjun Kumar

A serious illness can unsettle a family’s finances long after the patient has returned home. There are hospital bills to pay, medicines to buy and journeys to arrange. Savings meant for education or a small business may have to be used for treatment instead. For families with little money to spare, the consequences can last for years.

Odisha has made considerable progress in reducing this burden. Since the launch of the Biju Swasthya Kalyan Yojana (BSKY) in 2018, the state has steadily expanded the healthcare it finances. The more recent Gopabandhu Jan Arogya Yojana (GJAY), integrated with Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), has widened access to cashless treatment, including at hospitals outside Odisha.

This is an important part of the state’s ambitions for Viksit Odisha @2036. Yet the next stage of health assurance will be judged less by the number of people enrolled or the size of the insurance cover than by what happens when someone actually needs treatment.

Odisha’s system rests on a broad public commitment. Treatment in state government health facilities is free for all citizens, irrespective of income. Eligible families can also receive cashless treatment worth ₹5 lakh annually at empanelled private hospitals. Women have an additional ₹5 lakh available once the family limit is exhausted, recognising that healthcare spending within a household is not always shared equally.

The integration with AB-PMJAY has addressed a longstanding limitation of BSKY: access to hospitals beyond the state. This matters particularly for families whose members live or work elsewhere. The state has committed ₹27,019.25 crore over 2025–30 to the integrated arrangement. People aged 70 and above are also covered under the Ayushman Vayo Vandana Yojana, which provides ₹5 lakh in annual cashless treatment regardless of socio-economic status.

Hospitalisation is not the only expense the system attempts to address. Covered packages include consultations, diagnostics and medicines for three days before admission and 15 days after discharge. Programmes such as NIRAMAYA and NIDAN provide free medicines and diagnostic services in public facilities, while the Ama Hospital Scheme seeks to improve hospital infrastructure and patient amenities.

The reach of this protection has grown substantially. NFHS-4 recorded health insurance or financing coverage among 47.7% of Odisha’s households in 2015–16. The figure rose to 52.2% in NFHS-5. Under the newer GJAY–AB-PMJAY arrangement, the authors estimate that protection now extends to around 85–90% of households, covering nearly one crore families or approximately 3.5 crore people.

The state’s spending reflects the scale of this effort. Of its ₹23,635 crore health-sector allocation, ₹6,249 crore is earmarked for GJAY. The median hospital package costs around ₹14,500, and more than 95% of participating families use less than ₹1.2 lakh in a year. But serious illnesses tell a different story. Cardiology, oncology and nephrology account for more than 48% of claims expenditure. A family may rarely need the full ₹5 lakh cover, but prolonged cancer treatment or complex cardiac care can quickly make that protection indispensable.

The difficulty is that having an entitlement and being able to use it are not always the same thing.

Some empanelled private hospitals have charged patients for diagnostics before admission or medicines and follow-up care after discharge, although these services are covered under the scheme. The State Health Assurance Society has carried out surprise inspections and warned hospitals that continued violations could lead to de-empanelment. Such charges undermine the very purpose of cashless treatment. A patient who has been assured that care is covered should not have to argue over the bill at the hospital counter.

Referral rules can create difficulties of their own. Around 10% of clinical packages require a formal referral from a government facility before a patient can receive treatment at an empanelled private hospital. There are reasons to regulate the use of publicly financed private care, but the requirement can be particularly burdensome in an emergency. Someone with a cardiac or neurological condition may have little time to spare for an additional visit to obtain paperwork.

The location of hospitals matters just as much. More than 45% of empanelled private specialty beds are reported to be concentrated in the Bhubaneswar–Cuttack corridor. For patients in western and southern Odisha, advanced treatment may involve a long journey, with travel and accommodation costs that the hospital entitlement does not fully resolve. A generous insurance ceiling is of limited comfort if the nearest suitable hospital is several hours away.

There are also households that have yet to enter the private-hospital protection system. The authors estimate that Odisha’s urban “missing middle” comprises roughly 35–50 lakh people, or around 8–12% of the population. These include shop assistants, gig workers, auto drivers and others who may fall outside food-security-based eligibility without having employer-provided or private insurance. They can seek free treatment in government facilities, but a serious illness requiring private care can still leave them exposed to substantial bills.

Bringing these households into the system need not mean replacing what Odisha has already built. Rajasthan allows families outside its usual eligibility categories to obtain health assurance through a subsidised annual contribution of ₹850. Odisha could consider a similar route for those currently excluded from private-hospital protection.

The cost is worth examining. The authors estimate that around 14 lakh urban households, representing roughly 45–50 lakh people, remain outside the NFSA/SFSS net. At an assumed premium of ₹1,600 per family, extending protection to them would require approximately ₹224 crore a year. Additional claims are projected at ₹580–650 crore, with another ₹150 crore allowed for the effect of easing referral restrictions. The combined annual requirement would be around ₹954–1,024 crore, equivalent to roughly 0.36–0.38% of Odisha’s annual budget of more than ₹2.65 lakh crore.

These are estimates, and actual expenditure would depend on enrolment and claims. Even so, they suggest that the remaining gap in financial protection is a manageable question of public spending, rather than a reason to leave these households outside the system.

Expanding eligibility alone will not be enough. Odisha could allow an emergency clinical override so that patients needing immediate cardiac, neurological or trauma care can approach an empanelled private hospital without first securing a government referral. Better use of existing eligibility and identity records could also spare families repeated paperwork.

The public hospital system needs attention at the same time. District Headquarters Hospitals and Sub-Divisional Hospitals outside Bhubaneswar and Cuttack require stronger specialist services if patients are to receive advanced care closer to home. Tamil Nadu’s practice of directing insurance reimbursements from treatment in government hospitals back into those institutions offers one way to support such improvements.

There is a case, too, for looking beyond hospital admissions. Goa’s outpatient medicine allowance of up to ₹15,000 a year for specified chronic conditions offers a possible approach to the recurring costs of diabetes, hypertension and epilepsy. Regular medicines can strain a household budget even when no one needs hospitalisation.

As Odisha’s hospital network grows, standards of care must keep pace. Stronger accreditation requirements, independent clinical audits and a grievance system that patients can actually use would help ensure that cashless treatment is also safe and respectful. Hospitals should be assessed not only on the claims they process but on the care patients receive.

Odisha has already brought health protection within reach of a large share of its population. The task now is to make that protection dependable for a worker who falls outside the eligibility net, a patient who needs urgent treatment and a family living far from the state’s main specialist hospitals.

For those families, health assurance is not an abstract measure of coverage. It is the ability to seek treatment without having to choose between getting well and keeping the household financially secure. That is the promise Odisha needs to fulfil as it works towards 2036.

About the Authors

Dr. Manorama Bakshi is Director & Head of Healthcare & Advocacy at Consocia Advisory, Founder & Director of the Triloki Raj Foundation, and a Senior Visiting Fellow at IMPRI.

Dr. Arjun Kumar is the Director of the IMPRI Impact and Policy Research Institute, New Delhi. He holds a Ph.D. in Economics from the Centre for the Study of Regional Development, School of Social Sciences, Jawaharlal Nehru University (JNU), New Delhi.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation.