Explainer: A Confusion Opt-Out: What Keeps People Out of Welfare Schemes
Welfare schemes often struggle with low uptake despite high levels of public awareness. Using Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) as a case study, this article explores how uncertainty about eligibility, rather than lack of awareness, can lead eligible households to exclude themselves before they even engage with the welfare system.
The Awareness-Uptake Gap
Although awareness of Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) has improved since its launch in 2018, evidence suggests that awareness alone has not translated into universal access. A large survey of more than 11,600 eligible households across six states found that about 62 per cent of respondents were aware of the scheme, and among those who were aware, nearly four in five knew that their household was eligible. Yet state-level evidence from a 2023 study points to a persistent gap between awareness and actual uptake. In rural Bihar, for instance, 78.9 per cent of eligible households were aware of AB-PMJAY, but only 1.3 per cent had ever used the scheme.
Similarly, a study from Chhattisgarh reported awareness levels exceeding 90 per cent, while nearly one-quarter of surveyed households remained unenrolled and only around 53 per cent had utilised the benefit. Together, these findings suggest that awareness alone cannot explain why many eligible households remain outside welfare programmes. The barrier, in many cases, emerges only after people have heard about a scheme, when they are left to answer a deceptively simple question:
“Is this scheme actually meant for me?”
Consider Meera, who runs a tea stall outside a primary health centre in a district town. She is familiar with Ayushman Bharat through posters at the hospital and conversations with neighbours who have benefited from the scheme. Yet familiarity with the programme does not translate into confidence that her own family qualifies. Eligibility depends on deprivation indicators and inclusion in government databases that she cannot verify herself, and confirming her status would require taking time away from work and visiting a Common Service Centre or a hospital help desk.
Faced with uncertain returns and immediate costs, postponing that decision becomes a reasonable response.
When Citizens Screen Themselves Out
For households like Meera’s, the decision is not about whether the benefits of a welfare scheme are valuable, but about whether the effort required to establish eligibility is worth bearing. Behavioural economist Janet Currie argues that much of the non-participation observed in welfare programmes stems not from ignorance, but from this uncertainty. People may know that a programme exists, yet lack a simple and inexpensive way of determining whether it applies to them. Rather than risk the time and effort of an unsuccessful application, many effectively screen themselves out before the state has an opportunity to assess their eligibility. This process is difficult for governments to observe because it leaves little administrative trace. A rejected application can be recorded, but a household that decides not to apply because it assumes it is unlikely to qualify remains invisible in programme data.
Donald Moynihan, Pamela Herd and Hope Harvey describe the barriers citizens encounter in accessing public programmes as an administrative burden. They distinguish between learning costs, such as understanding eligibility criteria and determining whether a scheme applies; compliance costs, including gathering documents, travelling to service centres and completing administrative procedures; and psychological costs, arising from the uncertainty of investing time and effort without knowing whether the claim will succeed.
These costs are incurred before any benefit is guaranteed, making the decision to delay or forgo an application a rational response rather than an irrational one. Recognising this distinction also changes how governments think about welfare communication. Although awareness campaigns reduce information gaps by telling citizens that a scheme exists, they do little to reduce uncertainty about whether a particular household qualifies. Bridging that gap would require a different approach.
The Missing Piece: Making Eligibility Visible
If uncertainty is the barrier, then improving welfare access requires more than making citizens aware that a scheme exists, and requires making eligibility easier to recognise. Where administrative data permit, governments could move beyond generic awareness campaigns by proactively communicating likely eligibility.
Behaviourally, this would reduce the burden on citizens to interpret complex rules and decide whether pursuing a benefit is worthwhile.
Personalised notifications, simple eligibility verification tools, pre-filled applications and frontline verification at Common Service Centres and hospitals are among the approaches that could help.
Evidence suggests that such an approach can improve programme participation. In a field experiment on unclaimed Earned Income Tax Credit benefits in the United States, Bhargava and Manoli found that households were significantly more likely to claim benefits after receiving simplified notices explaining that they were likely to qualify. The intervention did not change eligibility, but simply made it clearer. As awareness of schemes such as Ayushman Bharat continues to expand, the next challenge is no longer ensuring that citizens have heard about welfare programmes, but ensuring that eligible citizens can recognise that those programmes are intended for them. Shifting from communicating schemes to communicating eligibility would not only improve enrollment but also reduce the quiet self-exclusion that keeps many eligible households outside the welfare system. In welfare delivery, informing citizens that a scheme exists is only the first step; enabling them to recognise that they qualify is what ultimately turns entitlement into access.