Can Healthcare Financing Fix India's Out-of-Pocket Healthcare Crisis

India's healthcare paradox is stark. On one end, there are world-class hospitals while on the other are financially devastating treatment costs.

- TDG NETWORK

Despite advances in medical infrastructure and healthtech innovation, India's 48% of total healthcare expenditure remains out of pocket. Subsequently, the medical emergencies translate not just into a health crisis but a financial distress for millions of households. In rural India and even urban settings, sudden hospitalization or critical care often leads to debt, asset liquidation or deferred treatment.

This results in alarming consequences as according to National Health Accounts data, nearly 17% of Indian families incur catastrophic health expenditure annually. As a result, higher healthcare costs are pushing millions into extreme poverty. In tandem, the government has launched Ayushman Bharat and various state insurance schemes; however, the problem remains unsolved.

The Uninsured Population and Coverage Gap
The health insurance market in India is still underpenetrated. Despite the proliferation of insurance products, approximately 38% of India's population lacks any health insurance, which clearly indicates that over 500 million individuals pay entirely out-of-pocket for all medical services. Among these, an estimated 30%, i.e., around 40 Cr people, are the "missing middle" who earn too much to qualify for subsidized schemes but are unable to afford private premiums.