Catastrophic Health Expenditure and Poor in India: Health Insurance is the Answer?

The unaffordable health care cost is believed to be one of the important causes of impoverishment in India. Using the data of WHO sponsored Study on Global AGEing and Adult Health (SAGE-India) of 2007, an attempt is made here to examine the health care expenditure, catastrophic health spending and the extent of health insurance coverage in rural and urban India. The survey covers about 10,000 households from six states of India. The analysis indicates that on an average , a household spent 13 percent of its income on health care. Among the households incurring catastrophic health expenditure, 24 percent became impoverished. Study also found that nine percent of non-poor households have become poor (impoverished) due to health spending. About 20 percent of households borrowed from their relatives and 8 percent sold their assets like land, furniture, livestock and jewellery to meet health care costs. According to this survey, the households having health insurance/policy are 5 percent in urban areas, it is only 1 percent in rural areas. The findings of the study convincingly illustrate the vulnerability of poor in India in the context of spiralling health care costs, privatization of medical sector, and lack of health insurance coverage.