Determinants of Health Insurance Penetration in India: An Empirical Analysis

Abstract

Insufficient participation of the government in the provision of health care services to the people puts tremendous pressure on households financing their health care expenditure from private sources. Health insurance can be seen as an effective measure to circumvent this problem. However, penetration of health insurance in India is very low. This article seeks to explore the effect of household assets, access to media demographic and caste profile of households in explaining the use of health insurance in India using data from the National Family Health Survey-III. Results suggest that richer households have a higher probability of enrolling into health insurance and access to media exerts a positive significant impact on health insurance enrolment. Particularly vulnerable are those from the scheduled tribe background in both rural and urban region and the Muslim community residing in urban area. Non-profit insurance scheme such as community-based health insurance (CBHI) has limited success in drawing people from the poorest economic status into their safety nets. Considerable regional disparity exists in terms of health insurance enrolment pattern. Odds of enrolling in private health insurance and public health insurance in comparison to no insurance are significantly higher for urban region. The opposite result holds for CBHI scheme.