71% of Indian Workers Self-Funding Healthcare, Report Finds

A recent report reveals that 71% of Indian workers pay for their own healthcare, with only 15% receiving employer-provided insurance.
India’s healthcare expenditure has surged, with a 140.7% increase from FY18 to FY24, reaching Rs 5.85 lakh crore.

A recent report by insurtech company Plum, titled “Health Report of Corporate India 2023,” provides insight into the concerning rise of healthcare costs in India. The report reveals that a notable 71% of workers pay their own healthcare costs, with only 15% receiving employer-provided health insurance support.

The study also suggests that India faces one of Asia's highest medical inflation rates at 14%, placing a heavy financial burden on employees. And this lack of employer-provided insurance is alarming, especially with India's workforce set to surge from 522 million in 2022 to a staggering 569 million by 2030.

Between FY18 and FY24, health spending rose at a compound annual growth rate (CAGR) of 15.8%, according to a press release from the Ministry of Finance.

Moreover, India's healthcare expenditure increased from 1.4% of GDP in FY18 to 1.9% in FY24. In FY24, healthcare spending reached Rs 5.85 lakh crore, marking a 140.7% jump from Rs 2.43 lakh crore in FY18.

To break down the math, in urban India, seeing a general physician costs around Rs 300 while consulting a specialist can reach Rs 1,000. Mental health services are priced steeply at Rs 25,000. Health check-ups average Rs 1,500, with lab tests ranging from Rs 1,500 to Rs 25,000, according to the report.

The study also suggests that employer-sponsored health insurance in India falls short of adequate coverage hence the increasing financial burden many workers face in managing their health needs.

NITI Aayog’s report, Health Insurance for India’s Missing Middle, sheds light on a critical gap in the health insurance system. It focuses on the “missing middle,” a segment that makes up about 30% of the population.

Zerodha co-founder Nithin Kamath emphasized the urgent need for comprehensive health insurance in his recent post on X. He warned that most Indians are just “one hospitalization away from bankruptcy,” highlighting the financial vulnerability many face in the absence of proper coverage.

A survey by LocalCircles found that 52% of insurance policyholders reported a premium increase of over 25% in the past year.

Additionally, 43% of those who filed an insurance claim in the last three years faced difficulties in getting their claims processed, highlighting challenges within the insurance system.

Edited by Harshajit Sarmah