Prime Minister Narendra Modi's solution is to tackle the problem at its roots. (File)

Highlights Around 40% of Indians were automatically registered for 'Ayushman Bharat'

Many of its 500 million beneficiaries don't have a clue about the scheme

PM Modi is writing letters, educating beneficiaries about the programme

The world's largest healthcare program in India is running up against a challenge: many of its 500 million beneficiaries don't have a clue about it, as they didn't have to enroll for it.

Prime Minister Narendra Modi's solution is to tackle the problem at its roots. He is writing letters to 100 million families educating them about the benefits of the program, which automatically registered 40 percent of India's population that make up the bottom of the population as per the socio-economic caste census data, said Vinod K. Paul, a member of NITI Aayog, the government's policy think tank.

"It's a big step toward access of services, it will change the health system by making costs rational," said Paul, who's the architect of the program that could influence Modi's fate in national polls next year. "Many Jobs will be created. It will be a stimulus for growth," he said in an interview at his New Delhi office on Wednesday.

A month since it was formally unveiled, the healthcare program, 'Ayushman Bharat,' Hindi for long live India, has benefited 112,000 people and approved claims totaling 1.4 billion rupees ($20 million). The government expects to spend up to 120 billion rupees annually on premium payments as PM Modi tries to seek support of the poor before elections.

Trust Model

Paul, a pediatrician who became a member of the NITI Aayog last year, described Ayushman Bharat as a massive assurance firm. The program is being implemented by most of India's 29 states on a trust model where pooling of premium and settlement of claims is handled by a trust and not an insurance company.

The health protection program promises an annual cover of $6,818, and the entire hospitalization cost is borne by the federal and state governments in the ratio of 60:40.

Paul's home-state Punjab, which had no state-funded insurance program, has gone a step further by taking it to a bigger chunk of population using its own funds. Himachal Pradesh, another north Indian state, is extending benefits to even the economically better-off at a premium.

The program is based on cumulative learning from states schemes and global best practices, Paul said, adding the private sector is playing an active role in it. Half of the 15,000 hospitals that enrolled for the program are from the private sector. The government is going through another 49,000 applications from health institutions that want to be a part of the plan.

Spending on health pushed more than 52 million people below the poverty line in India, according to a 2017 World Health Organization report. The world's-fastest growing economy spends about 1 percent of its gross domestic product on healthcare and aims to increase it to 2.5 percent by 2025 but has to overcome challenges from poor health facilities.

"Challenges are many but none are disturbing," Paul said.