Expenditure on government-funded health schemes and private health insurance has risen since the Covid-19 pandemic, with the two categories accounting for more than a fifth of India’s total health expenditure (THE) in 2023-24 (FY24), according to the National Health Accounts estimates released by the Ministry of Health & Family Welfare.
The report showed that the combined share of these two categories rose to 21.2 per cent of THE from 15.9 per cent in 2020-21 (FY21). THE includes both current and capital expenditure incurred by government and private sources, including external funding.
Social security expenditure on health — which includes government spending on premiums for Centre- and state-funded insurance schemes — increased to 11 per cent of THE in FY24 from 8.6 per cent in FY21.
This category also includes expenditure under publicly funded health insurance programmes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, state-specific health insurance schemes, employee benefit schemes, reimbursements to government employees, and social health insurance programmes.
Similarly, expenditure on private health insurance rose to 10.2 per cent of THE in FY24, up from 7.3 per cent in FY21.
This marks the first time that both social security expenditure on health and private health insurance expenditure have individually accounted for more than 10 per cent of THE.
The rise comes against the backdrop of a sharp increase in government spending on vaccination, testing and public health programmes during the pandemic, which helped reduce the share of households in overall healthcare expenditure.
“People have started to take health insurance seriously after the pandemic. While subsidised government schemes cover government employees and the lower rungs of society, people who can afford private insurance are also looking to avoid high hospitalisation costs,” said an official in the know.
The report also showed that household spending on healthcare has declined sharply over the past decade, falling from 64.2 per cent in 2013-14 (FY14) to 42.7 per cent in FY24. This is in line with the Centre’s target of reducing out-of-pocket expenditure to 35 per cent of THE by 2025-26.
One of the key factors behind this long-term decline has been the nearly threefold increase in government health expenditure, which rose from ₹1.3 trillion in FY14 to ₹4.14 trillion in FY24.
The report also observed that government expenditure on primary healthcare reached roughly ₹1.53 trillion, reflecting a focus on investment in essential and community-level healthcare services.
“This investment is particularly significant in the context of the expansion of Ayushman Arogya Mandirs, which are bringing comprehensive primary healthcare services closer to communities,” the health ministry said on Sunday.
The official also said that the impact of screening and awareness-generation activities was reflected in the National Statistical Office’s 80th-round health survey.
“It showed that healthcare demand nearly doubled — from 6.8 per cent to 12.2 per cent in rural areas and from 9.1 per cent to 14.9 per cent in urban areas between 2017-18 and 2025,” he added
