India’s largest national survey on social consumption conducted between July 2017 and June 2018 shows that only 10% of the poorest one-fifth Indians in Rural (10.2%) and Urban (9.8%) India possessed any form of government or private health insurance. 14.1% Indians in Rural India and 19.1% in Urban settings have access to health insurance, in any form. This makes them prone to financial burdens caused by poor healthcare. The survey included the Rashtriya Swasthya Bima Yojana (RSBY, National Insurance Scheme), the Central Government Health Scheme for Government Employees and the Employee State Insurance Scheme for formal sector employees and state government’s health protection programs. In 2011-12 alone, out of pocket expenditure drove 55 million Indians to poverty. As per a world bank report in 2017, 17.3% of India’s population spend more than 10% of their income on healthcare and 3.9% of the population spends more than 25%. Health coverage decreased by 0.7 percentage points for the poorest Indians in rural areas and increased by 1.2 percentage points for the poorest in urban India as compared to 2014, when the previous health consumption survey was conducted. As a result of low insurance coverage, in 2016-17, as per an NSO report about 79.5% people in rural areas and 83.7 urban people paid for medical companies from their own savings. This grew from 67.8% in rural areas and 74.9% from urban areas in 2014. With people preferring to use up their savings, the incidence of borrowing for medical purposes fell from 24.9% in 2014 to 13.4% in 2017 in rural areas. On the other hand, in urban areas it fell from 18.2% to 8.5%. Over half of hospitalisations in India (51.9% in rural and 61.4% in urban) are in private hospitals. The average medical expenditure per hospitalization in a private hospital is seven times that of a government hospital, the NSO report said. The poor are far less likely to opt for hospitalization as only 12.9% of the rural and 16.2% of the urban poorest 20% families went for hospitalization. The biggest reason for poverty is seen to be the out of pocket expenditure on healthcare. Since poverty may cause them to delay treatment, in the case of diseases such as tuberculosis and cancer, it may turn dangerous and more expensive to treat. The rich also have better access to healthcare insurance as the cost of hospitalization for more than one fifth of this population is reimbursed. The NSO data also indicates that the richest 40% have better access to government healthcare facilities as opposed to the poorest 40%.
Lack of Health Insurance becomes the leading cause of Poverty
