Introduction
The latest 80th Round Survey on Household Social Consumption: Health (2025) released by the National Statistical Office presents a mixed picture of India’s healthcare sector. The survey highlights significant progress in health insurance coverage, healthcare access, and institutional deliveries. However, it also reveals persistent financial distress due to rising out-of-pocket expenditure (OOPE), increasing dependence on private healthcare, and unequal access to benefits.
The findings underline the complex challenge of achieving Universal Health Coverage (UHC) in India.
Overview of the 80th Round NSO Health Survey
The survey was conducted between January and December 2025 and compares healthcare trends with the previous 75th Round Survey (2017–18).
Key Improvements
- Expansion in health insurance coverage
- Better access to healthcare services
- Increase in institutional deliveries
- Wider availability of medicines and diagnostics
Major Concerns
- Rising OOPE despite insurance coverage
- Growing reliance on private healthcare
- Limited increase in public hospital utilisation
- Unequal benefits across income groups
Thus, the survey reveals a paradox: healthcare coverage has improved, but financial protection remains weak.
Rising Health Insurance Coverage
The survey indicates substantial growth in insurance penetration:
- 47.4% of rural households covered under health insurance
- 44.3% of urban households covered
This increase has largely been driven by Government-Financed Health Insurance (GFHI) schemes such as:
- Ayushman Bharat Pradhan Mantri Jan Arogya Yojana
- State-level health insurance schemes
- Employees' State Insurance Scheme
- Central Government Health Scheme
Government records show that GFHI coverage increased more than two-and-a-half times between 2017–18 and 2025.
This reflects India’s rapid movement toward universal health assurance.
Expanding Healthcare Access
The Union Health Ministry has highlighted the survey findings as evidence of improved healthcare access.
Key Government Interventions
Free Drugs and Diagnostics Initiatives
The Free Drugs and Diagnostics Initiatives (FDSI and FDI) launched in 2015 expanded access to essential medicines and diagnostic services.
Ayushman Arogya Mandirs (AAMs)
India has established nearly 1.84 lakh AAMs, strengthening primary healthcare services focused on:
- Preventive care
- Promotive healthcare
- Curative treatment AMRIT Scheme
The Affordable Medicines and Reliable Implants for Treatment programme provides discounted medicines through pharmacies across India.
These interventions have improved early detection and management of non-communicable diseases such as:
- Diabetes
- Hypertension
- Cardiovascular diseases
This reflects India’s ongoing epidemiological transition from communicable to non-communicable diseases.
Persisting Challenges
Despite expanded coverage, important structural problems continue.
- Limited Increase in Hospitalisation
Hospitalisation rates have not increased significantly since 2017–18 and remain below 2014 levels.
This suggests that:
- Insurance coverage alone does not guarantee healthcare utilisation
- Financial and accessibility barriers still persist
- Rising Dependence on Private Healthcare
The survey shows growing preference for private healthcare facilities, especially in urban areas.
Key concern:
- 57% of insured individuals sought hospitalisation in private hospitals
This increases treatment costs and reduces the effectiveness of public insurance schemes.
- Rising Out-of-Pocket Expenditure (OOPE)
Independent analysis of NSO data indicates that OOPE on hospitalisation has more than doubled between 2017–18 and 2025.
Hospitalisation Costs
- Median OOPE per hospitalisation: ₹11,285
- Median OOPE in public hospitals: ₹1,100
However, specialised treatments in private hospitals significantly raise average expenditure.
Causes of Continued OOPE
Even in public hospitals, patients often pay for:
- Medicines
- Diagnostics
- Transport
- Incidental expenses
This occurs due to shortages and infrastructural gaps.
Inequities in Healthcare Utilisation
The survey reveals unequal access to benefits under insurance schemes.
Uneven Distribution of Benefits
Among urban beneficiaries using insurance-linked hospitalisation:
- Only 13% belonged to the poorest income group
This indicates that wealthier households disproportionately benefit from government-financed insurance schemes.
Fiscal Burden on States
States such as Haryana and West Bengal reportedly spend nearly:
- 15% of their health budgets on GFHI schemes
Large public funds are increasingly flowing toward private healthcare providers through insurance reimbursements.
Public Health Equity Concerns
The survey highlights that:
- Coverage indicators have improved
- Financial risk protection remains inadequate
Rural vs Urban Divide
- Rural low-income households show some decline in OOPE
- Urban households continue facing heavy financial stress due to reliance on private care
This demonstrates the limitations of insurance-led healthcare models without strong public healthcare infrastructure.
Way Forward
Strengthening Public Healthcare
India must prioritise:
- Public hospitals
- Primary healthcare systems
- Health workforce expansion
Focus on Preventive and Primary Care
Ayushman Arogya Mandirs can become the backbone of Universal Health Coverage if adequately funded.
Better Regulation of Private Sector
Stronger regulation is needed to:
- Prevent overcharging
- Improve transparency
- Ensure quality standards
Improve Drug and Diagnostic Availability
Consistent supply of free medicines and tests can reduce OOPE significantly.
Outcome-Based Health Financing
Healthcare financing should focus on:
- Quality outcomes
- Preventive healthcare
- Affordability
rather than volume-based reimbursements.
Conclusion
The NSO Health Survey 2025 highlights both the achievements and limitations of India’s evolving healthcare system. While insurance coverage and healthcare access have improved substantially, rising out-of-pocket expenditure and growing dependence on private healthcare continue to undermine financial protection.
India’s experience demonstrates that insurance expansion alone cannot guarantee equitable healthcare outcomes. A strong, accessible, and adequately funded public healthcare system remains essential for achieving universal health coverage, reducing medical impoverishment, and ensuring inclusive development.