Breaking Down Barriers: The Promise of Health Insurance for India’s Urban and Rural Poor

The objective of this study is to evaluate the coverage of existing health insurance schemes for the Indian urban and rural poor and identify the socioeconomic barriers that prevent households from accessing health insurance. The study uses two rounds of National Family Health Survey (NFHS) data (NFHS-4 and NFHS-5). First, the distribution of insurance coverage among the urban and rural poor households is examined. Second, a logistic regression model is applied to identify the socioeconomic determinants of the coverage. Finally, the Fairlie decomposition technique is employed to identify the factors contributing to disparities in insurance coverage among the urban and rural poor households in NFHS-4 and NFHS-5. The study reveals that health insurance coverage is not evenly distributed across socioeconomic backgrounds, with a significant difference in coverage between poor households in both urban and rural areas. In both surveys, older household heads, Islam religion, Scheduled tribes, households with below-poverty line (BPL) cards, and aspirational districts are significantly contributing to the insurance coverage gap between the urban and rural poor. Further, this study provides important implications for expanding health insurance coverage in India, thus suggesting the need for more equitable distribution of health insurance coverage and targeted interventions to address the disparities.