But out-of-pocket expenses remain high
While insurance coverage has expanded, now accounting for 38% of the market and reaching over 50 crore people, these gains have not curbed OOPE, which still dominates health spending.
Nearly half of India’s population is now covered by health insurance, finds a survey report released on Monday by the Statistics Ministry. However, the average out-of-pocket expenses (OOPE) per hospitalisation continue to remain high, topping ₹34,000 in private and charitable healthcare facilities.
The findings are based on responses from about 1.4 lakh households surveyed between January and December 2025 as part of the 80th round of the National Sample Survey (NSS).
Health insurance coverage has risen sharply, the report noted. In 2017-18, during the previous NSS health survey, only 14.1 per cent of rural residents and 19.1 per cent of urban residents were insured.
By 2025, the coverage had increased to 47.4 per cent in rural and 44.3 per cent in urban areas. This expansion coincided with the reduction of GST on individual and family health insurance premiums to zero from 18 per cent, effective September 22, 2025.
Govt schemes
Coverage under government-sponsored schemes grew even faster, rising from 13 per cent in rural areas and 9 per cent in urban areas in 2017-18 to 45.5 per cent and 31.8 per cent, respectively, in 2025. The Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), launched in September 2018, offers annual health cover of up to ₹5 lakh per eligible household and has enrolled nearly 12 crore families.
Experts, however, offered a nuanced assessment of this expansion. “The increase is driven largely by government-funded health assurance schemes such as Ayushman Bharat PM-JAY rather than direct private insurance,” said Indranil of OP Jindal University. Mohan Rao, a former professor at the Centre of Social Medicine and Community Health, Jawaharlal Nehru University, added that the scheme has effectively subsidised private healthcare provision at the cost of strengthening public health infrastructure.
Out-of-pocket spend
Despite the wider coverage, cost disparities remain stark. The average OOPE per hospitalisation stood at ₹6,631 in government or public facilities, but jumped to ₹39,530 in charitable or NGO-run hospitals and ₹50,508 in private hospitals, including those empanelled under government schemes.
The 2017-18 NSS did not provide comparable OOPE estimates. However, a study by Indranil, which deflated costs to 2014 prices, estimated outpatient OOPE at ₹16,128 in rural and ₹20,814 in urban areas during that period.
Other key findings
About 13.1 per cent of persons reported illness in the 15 days before the survey, with urban areas (14.9 per cent) slightly higher than rural (12.2 per cent). The average hospitalization rate was 2.9 instances per 100 persons over the preceding 365 days.
While insurance coverage has expanded, now accounting for 38 per cent of the market and reaching over 50 crore people, these gains have not curbed OOPE, which still dominates health spending.
With private premiums rising (a 25 per cent jump for 52 per cent of policyholders in the last year) and schemes like AB-PMJAY focusing on inpatient empanelments, households continue facing catastrophic costs, as evidenced by studies like Reshmi et al (BMJ 2021) and Samir Garg et al (EPW, April 2024).
Published on April 20, 2026
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