Catastrophic Health Expenditure and the Poor in India: New Evidence from a Nation-Wide Survey

T.V. Sekher, International Institute for Population Sciences (IIPS)
Kaushalendra Kumar, International Institute for Population Sciences (IIPS)

High out-of-pocket spending on health care is placing tremendous financial burden on poor households in India. The health care costs are 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)-2007, an attempt is made to examine the health expenditure, catastrophic health spending and the extent of health insurance coverage in rural and urban areas. Among households incurring catastrophic health expenditure, 23 percent became impoverished. About 20 percent of households borrowed from relatives and 8 percent sold their assets like land, furniture, livestock and jewellery to meet health care costs. Impoverishment effect due to catastrophic health payments is twice in rural areas compared to urban areas. The findings of the study illustrates the vulnerability of poor in the context of spiraling health care costs, privatization of medical sector, and lack of health insurance coverage.