Health insurance coverage rises, but out-of-pocket expenditure and private sector reliance increase
The latest NSS data (80th round) reveals that despite a significant increase in health insurance coverage, hospitalisation rates haven't risen proportionally, and out-of-pocket (OOP) expenditure has sharply increased, especially in the private sector. Government-funded health insurance (GFHI) schemes like PMJAY have expanded coverage, but more people are shifting to private care, where costs are much higher. The article highlights that GFHI schemes, while targeting backward sections, disproportionately benefit the better-off in terms of service utilization. It argues that these schemes, by subsidizing private care, fail to protect households from financial hardship and suggests a need to strengthen the public healthcare system instead.
Key Points
- Despite increased health insurance coverage, hospitalisation rates have not significantly increased, and OOP expenditure has risen sharply.
- A growing proportion of people are opting for private sector healthcare, where costs are considerably higher.
- Government-funded health insurance schemes (GFHI) like PMJAY have expanded coverage but are not effectively reducing financial hardship.
- GFHI schemes, despite targeting socio-economically backward sections, disproportionately benefit the relatively better-off in service utilization.
- The article suggests rethinking the insurance-led model and refocusing on strengthening the public healthcare system for universal, comprehensive care.
Exam Facts
- The data is from the NSS 80th round on "Household Social Consumption: Health," conducted between January and December 2025.
- 47.4% of rural households and 44.3% of urban households are covered by some form of health insurance.
- Average OOP expenditure on hospitalisation has more than doubled between 2017-18 and 2025.
- PMJAY (Prime Minister Jan Arogya Yojana) and Swasthya Saathi are examples of GFHI schemes.
- Ayushman Arogya Mandir (AAM) is PMJAY's counterpart aimed at providing comprehensive primary care.
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