Inequality in Health Insurance Coverage in a Pluralistic Health Insurance System: Evidence From India

Persistent inequality in financial protection mechanisms in healthcare continues to be a major challenge within India's pluralistic health insurance system, disproportionately disadvantaging marginalised groups.

Our study uses NFHS 4 and 5 household data to investigate inequality in health insurance coverage prevalence and transition across socioeconomic and demographic strata. It categorises health insurance coverage based on the number and type of coverage, considering factors such as the provider, pooling mechanism, and target population. We employ descriptive statistics and the concentration index to assess the prevalence of health insurance coverage. To delve deeper into the factors influencing enrolment in different types of coverage, we created 24 mutually exclusive groups at the intersection of sex-income-marriage-caste. These categories, along with other explanatory variables, are analysed for their influence on the enrolment of coverage using multinomial logistic regression models.

Although the proportion of health insurance coverage increased from NFHS 4 to NFHS 5, 59.01% of the sample population still lacked coverage, indicating insufficient progress. Both surveys reveal significant disparities in coverage based on state-level, social, economic, and demographic factors. While the role of social and demographic determinants remains relatively modest, the distributional gradient of insurance prevalence across economic strata and state categories was high. India's pluralistic health insurance system has resulted in the population being covered under different coverage mechanisms. However, among these various types of coverage, the majority of sample households were only single, predominantly under SHI.

The study investigated disparities in health insurance coverage across various social, economic, and demographic segments in India, revealing that inequalities are influenced by a combination of state-level, socioeconomic, and demographic factors. These findings call for a unified and inclusive health financing framework that can address systemic fragmentation. Moving towards a 'One Nation, One Insurance' model offers a transformative pathway to ensure equitable, efficient, and universal health coverage for all Indians. Addressing these determinants presents potential policy tools for improving coverage imbalances, thereby offering opportunities for targeted interventions to mitigate disparities.