Rising Out-of-Pocket Costs Persist Despite Increased Health Insurance Coverage in India
Out-of-pocket costs still dominate hospitalisation spend despite wider insurance coverage: NSO survey
The Economic Times
Image: The Economic Times
A recent National Statistical Office (NSO) survey reveals that despite health insurance coverage rising to 46% in rural areas and 32% in urban centers, out-of-pocket expenditure (OOPE) remains the primary burden for patients in India. Average hospitalisation costs have nearly doubled, with rural patients spending ₹31,500 and urban patients spending ₹47,000 per hospitalisation.
- 01Health insurance coverage in rural areas has increased to 46% and 32% in urban areas.
- 02Out-of-pocket expenditure (OOPE) accounts for 95% of hospitalisation costs in rural India.
- 03Urban patients incur an average hospitalisation cost of ₹47,000, with OOPE at ₹39,000.
- 04Overall hospitalisation costs have risen by 97% in rural areas and 77% in urban areas since 2017-18.
- 05The hospitalisation rate remains stable at 29 cases per 1,000 people.
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The National Statistical Office (NSO) health consumption survey highlights a concerning trend in India, where out-of-pocket expenditure (OOPE) continues to dominate hospitalisation costs despite an increase in health insurance coverage. Between 2017-18 and 2025, coverage rose to 46% in rural areas and 32% in urban centers, up from 13% and 9% respectively. However, patients in rural India spend an average of ₹31,500 per hospitalisation, with OOPE making up nearly 95% of total costs. In urban areas, the average hospitalisation expense is about ₹47,000, with OOPE at approximately ₹39,000, or 83% of the total. The overall cost of hospitalisation has nearly doubled, with a 97% increase in rural areas and a 77% rise in urban regions, primarily driven by private healthcare facilities. Despite these rising costs, the hospitalisation rate has remained relatively unchanged at 29 cases per 1,000 people.
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The continued reliance on out-of-pocket spending for hospitalisation may strain household finances, particularly for low-income families. This could lead to delayed medical treatment or increased debt for many individuals.
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