Government-backed health schemes and private insurance climbed past 21% of total health expenditure in India during the 2023-24 financial year, shifting financial pressure away from household savings according to National Health Accounts data released by the Ministry of Health & Family Welfare.
The Bottom Line
- Social security and private health insurance combined reached 21.2% of total health expenditure in FY24, up from 15.9% in FY21.
- Direct household spending dropped to 42.7% of total health expenditure in FY24, falling from 64.2% in FY14.
- Government health expenditure rose nearly threefold over the decade, reaching ₹4.14 trillion in FY24 compared to ₹1.3 trillion in FY14.
Health Expenditure Shift in FY24
The combined share of government health schemes and private insurance reached 21.2 per cent of total health expenditure in 2023-24, rising from 15.9 per cent in 2020-21, business-standard.com reported. Total health expenditure covers current and capital spending by public and private sources, alongside external funding.
Social security spending on health climbed to 11 per cent of the total in FY24 from 8.6 per cent in FY21. This category captures government payments for premiums under national and state-backed insurance programs.
Programmes such as the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, state-level health plans, employee benefit schemes, and official medical reimbursements fall under this social security umbrella.
Private Health Insurance Expenditure Advances to 10.2 per Cent
Expenditure on private health insurance advanced to 10.2 per cent of total health expenditure in FY24, increasing from 7.3 per cent in FY21. Social security spending and private health insurance have both exceeded 10 per cent individually for the first time.
“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,” an official in the know told business-standard.com.
| Expenditure Category | FY21 Share (%) | FY24 Share (%) |
|---|---|---|
| Social Security Health Spending | 8.6 | 11.0 |
| Private Health Insurance | 7.3 | 10.2 |
| Combined Insurance Share | 15.9 | 21.2 |
Household out-of-pocket spending fell to 42.7 per cent in FY24, down from 64.2 per cent in FY14. That drop aligns with official targets to lower household medical burdens to 35 per cent of total health expenditure by 2025-26.
Primary Healthcare Investments
Government health spending expanded from ₹1.3 trillion in FY14 to ₹4.14 trillion in FY24. Public spending on primary healthcare alone reached roughly ₹1.53 trillion during the period.
“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.
Data from the National Statistical Office’s 80th-round health survey indicated that healthcare demand grew 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.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
