How effective health insurance schemes are in tackling economic burden of healthcare in India

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Sandhya Mahapatro,Pushpendra Singh & Yadawendra Singh
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Background: India is one of the most privatised health systems with high OOP payment for health care in the world. The financial burden of OOP payment has an iniquitous effect on access to health care as it restricts health care accessibility among poor. To provide universal health care access to all its citizen government has launched health insurance programs in the recent past. Objective: The study attempts to understand the impact of health insurance schemes on tackling the economic burden of out of pocket expenditure and its effectiveness in reducing economic inequalities in health care spending. Method: The study utilises National Sample Survey 2014 data to fulfill the objectives. Bi-variate analysis and two-part model were used to examine the association of health insurance with the level of health expenditure and financial burden. Results: The paper shows that health insurance schemes are effective in reducing the burden of OOP expenditure but economic disparities in the financial burden of OOP expenditure exist where the poor with less income spends a greater share of household income than the rich. Conclusion: An increasing coverage of poor under health insurance no doubt protects against health care impoverishment, but mere provision health care does not address the issue of equity in health spending as the burden of health spending was more among poor. The major implication of the findings is that there is a need for analysing the efficiency and equity implication of the health insurance schemes in providing financial protection.

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