Rising healthcare costs and universal health coverage in India: an analysis of national sample surveys, 1986-2014

This paper focuses on the trends in health seeking behaviour of people and the cost of treatment and key determinants of health insurance premium payments amongst BPL and APL households by examining the National Sample Survey data pertaining to four rounds of 1986-87, 1995-96, 2004 and 2014. With variation across states, it is found that treatment seeking from public providers has declined and preference for private providers increased over the period. Although overall health seeking behaviour has improved for male and female population, a significant percentage of people, more in rural than in urban areas, do not seek treatment due to lack of accessibility and a perception that illness is ‘not serious enough to require treatment’. While the health care cost has increased over time, the gap between public and private costs has reduced owing perhaps to the increased cost of treatment in public health facilities following the levying of users fees and restrictions on distribution of free medicine. Since the mid-2000s, to address healthcare needs of the poor section of society, the public insurance companies introduced low-cost hospitalisation insurance schemes such as Jan Arogya Bima Policy and Rashtriya Swasthya Bima Yojana. The analysis of the insurance premium showed that a larger proportion of households who had paid premium in 2004 as well as in 2014 belonged to higher Monthly Per Capita Expenditure (MPCE) group and was economically non-poor. Further, the inter-quintile MPCE differential (between the top and bottom quintile) shows vast inter-state inequalities in terms of both percentage of households who paid a premium and percentage having health insurance coverage. The determinants of a household getting enrolled for health insurance suggest that the gaps in odds ratios of several attributes either got reduced in magnitude or disappeared mainly due to encouraging enrollment from the poor households in RSBY. At all India level, the insured BPL/APL households on average had reported higher hospitalisation expenses than the non-insured households with much higher differential for urban households, thus indicating moral hazard and insurance collusions particularly in cities of economically prosperous states of Punjab, Haryana, Gujarat, and Maharashtra. The analysis further demonstrated that the insurance has provided a very minimal financial relief to BPL households especially living in rural India.