The Aam Aadmi Party-led government in Punjab has formally launched its universal healthcare scheme Mukh Mantri Sehat Yojana (MMSY) with the aim of bringing all 65 lakh families in the state under a cashless medical treatment programme through an insurance coverage of Rs 10 lakh each per year. While the government has pitched the scheme as a “breakthrough in public health”, Punjab continues to face fund crunch with its debt standing at Rs 4 lakh crore in 2025-26.
As the 2027 Assembly elections approach and the AAP government enters the last year of its tenure, Chief Minister Bhagwant Mann and AAP national convener Arvind Kejriwal launched the MMSY at a public gathering in Mohali Thursday. They also targeted previous state governments for “neglecting” the healthcare sector.
Under the MMSY, any resident of Punjab, carrying an Aadhaar card or a voter ID, will be eligible to access free treatment for over 2,500 medical procedures at state-run and some private hospitals.
In its hybrid funding structure, of the Rs 10-lakh cover per family each year, Rs 1 lakh will be provided by the Centre-run United India Insurance Company, while the remaining Rs 9 lakh will be covered by the Punjab government. With the government taking on a major share of the financial liability, it remains to be seen how the scheme – structured more like a state-funded reimbursement model rather than a conventional insurance programme – is implemented on the ground.
The scheme’s announcement by the AAP government, which has already been burdened with heavy debts, has sparked scepticism about its long-term financial sustainability, especially if rising awareness about the programme leads to a sharp increase in its enrolment in the coming months.
State health minister Balbir Singh said the government has made a budgetary provision of Rs 1,200 crore for the scheme. But some healthcare experts say this amount may only be the preliminary outlay. “Given that the scheme covers more than 2,300 treatment packages, including expensive procedures such as cancer therapy, cardiac surgeries, organ transplants and ICU care, the eventual burden could be significantly higher. This has happened in Punjab in the past,” said a doctor, who holds an administrative role at a hospital, on the condition of anonymity. The universal nature of the programme makes cost escalation difficult to predict, the doctor said.
Such scepticism stems from the fact that in 2024-2025, private hospitals in Punjab, represented by the Private Hospital and Nursing Home Association (PHANA), suspended cashless treatment under the state-run health insurance scheme due to roughly Rs 600 crore in pending dues from the government. In December 2025, the Punjab and Haryana High Court issued notices to both the Centre and the Punjab government regarding “persistent and systemic delays” in clearing these payments.
The newly launched scheme will replace the state’s existing insurance scheme that provided a cover of Rs 5 lakh per family every year, and operated on a 60:40 funding ratio between the Centre and the state. The older scheme had 15 lakh beneficiaries, all from families falling in the bottom 40% of the state population by income.
Opposition’s stance
The Shiromani Akali Dal (SAD) accused the Mann government of misleading the public by claiming it would provide coverage of up to Rs 10 lakh per year, when it had actually secured coverage for only Rs 1 lakh.
SAD leader N K Sharma claimed that the AAP government had “no intention of implementing the scheme” and was merely indulging in a “publicity gimmick”.
Sharma said if the government was sincere about implementing this scheme, it would need to earmark a budgetary outlay of Rs 10,000 crore. “The government claims it will run the scheme by spending Rs 1,200 crore. This is because medical insurance has been arranged for only Rs 1 lakh per family, with the government committing to pay the remaining claims. This effectively means Punjabis will get medical insurance coverage of just Rs 1 lakh,” he claimed.
However, the AAP has defended the scheme, with Kejriwal saying, “This Rs 10 lakh treatment will be available to everyone. (The Opposition) and their families will also be treated under this scheme. The AAP government has not discriminated, nor put any condition that Congress or Akali members will not be treated… They only want power so they can make money. Their cycle is money from power and power from money. Today, these parties are in a bad state.”
Ahead of the 2027 Assembly polls, the political overtones of the scheme are clear. It has been framed to fit into the AAP’s larger governance narrative, one that mirrors the party’s model in Delhi, where free healthcare and education have been central poll planks. With Kejriwal playing an active role in announcing and promoting the scheme, AAP leaders have projected it as part of its broader alternative politics centred on welfare delivery.
In the 2022 polls, both Kejriwal and Mann had campaigned on the plank of several AAP “guarantees”, including the promise of free healthcare. After launching the scheme Thursday, Kejriwal said, “People did not believe it back then.”