According to the National Health Accounts estimates published by the Ministry of Health and Family Welfare, in the financial year 2023-2024 (FY24), public health schemes and private insurance accounted for 21.2 percent of Total Health Expenditure (THE) in India. Both segments exceeded the 10 percent mark for the first time.
Spending on public health programs and private medical insurance increased after the COVID-19 pandemic, making up more than one-fifth of India's total health expenditure in 2023-2024. This figure rose from 15.9 percent in 2020-2021 (FY21).
Social health expenditures, which include government spending on contributions to centralized and regional insurance schemes, rose to 11 percent of THE in FY24 compared to 8.6 percent in FY21. This category covers government-funded programs such as Ayushman Bharat PMJAY, regional insurance schemes, employee welfare programs, reimbursement for government employees, and social health insurance.
Similarly, private medical insurance spending reached 10.2 percent of THE in FY24, up from 7.3 percent in FY21. This marked the first instance where both social health expenditures and private insurance spending individually exceeded 10 percent of THE.
The rise in these figures is significant because during the pandemic years, there was a sharp increase in government spending on vaccination, testing, and public health programs, which contributed to a decrease in the share of household expenditure in overall healthcare.
An anonymous official source noted that people have become more serious about health insurance after the pandemic. He added that while subsidized government programs cover employees and lower strata of society, individuals who can afford private insurance are also seeking to avoid high costs of inpatient treatment.
Furthermore, the report shows that household health expenditure has sharply decreased over the last decade, falling from 64.2 percent in 2013-2014 (FY14) to 42.7 percent in FY24. This aligns with the goal of reducing Out-of-Pocket Expenditure (OOPE) to 35 percent of THE by 2025-2026 (FY26).
One of the key factors in this long-term decline has been the nearly threefold increase in Government Health Expenditure (GHE), which grew from 1.3 trillion rupees in FY14 to 4.14 trillion rupees in FY24. The Ministry of Health emphasized that public spending on primary healthcare reached approximately 1.53 trillion rupees, reflecting priority investments in community-level and basic services.
The Ministry of Health stated that these investments are particularly important in the context of expanding Ayushman Arogya Mandirs (AAMs), which bring comprehensive primary healthcare services closer to the population. The official representative also mentioned that the impact of screening and awareness campaigns was reflected in the eighth round of the National Statistical Office survey. According to this survey, the demand for healthcare almost doubled: from 6.8 percent to 12.2 percent in rural areas and from 9.1 percent to 14.9 percent in urban areas between 2017-2018 and 2025.
