Hospitalization Expenses: Health Insurance in Name Only? Indians pay 95% of treatment costs themselves, what in the report?

• Using your savings to cover a large portion of medical expenses
• The financial burden on the villagers may increase

Hospitalization Expenses: The number of people opting for health insurance in the country is steadily increasing. On the other hand, a shocking picture has emerged regarding health insurance claims. Despite having a health insurance policy or plan, patients are forced to meet a major portion of their medical expenses out of their own pocket or by borrowing money.. This shocking information has been revealed in the latest survey conducted by the National Statistics Office i.e. NSO in 2025.

Being forced to take a loan or sell your property

According to the ‘Family Consumption Survey’ conducted by the Office for National Statistics from January to December 2025, families are still forced to use their savings, borrow or sell their assets to cover a large portion of medical expenses incurred during hospitalization. According to the survey, while there has been a significant increase in the coverage of health schemes compared to 2017-18, there has not been any significant improvement in terms of ‘out-of-pocket expenditure’ i.e. expenditure incurred directly out of one’s own pocket.

Financial burden on villagers

Rural India: Coverage under government and other health schemes has increased from 13% to 46%. Out of the average hospitalization cost of ₹33,000, patients still have to bear 95% out-of-pocket, approximately ₹31,500.
Urban India: Here, the prevalence has increased from 9% to 32%. In urban areas, the average hospital cost is ₹47,000, of which 83%, or approximately ₹39,000, is being paid out of pocket by patients.

Huge increase in treatment costs

Over the past 7-8 years, hospitalization costs have almost doubled. A whopping 97% increase in treatment costs has been observed in rural areas. In urban areas, this cost has increased by 77%. Treatment in private hospitals has become significantly more expensive than in public hospitals; This has been the main reason behind this huge growth.

Large costs associated with childbirth

The report shows that both medical expenses and ‘out-of-pocket expenses’ during childbirth are generally equivalent. However, the availability of health plan benefits in urban India is somewhat better than in rural areas.

Hospitalization rates stable

Hospitalization rate in the country is stable at 29 per thousand. In rural areas the proportion has increased from 26 to 29, while in urban areas it has decreased from 34 to 32.

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