India’s Out‑of‑Pocket Health Expenditure Falls to 43% as Govt Spending Rises – NHA 2022‑23 Report

<p>The Union Health Ministry released the <span class="key-term" data-definition="National Health Accounts (NHA) — A systematic accounting framework that quantifies total health spending in a country, used for policy planning (GS3: Economy)">NHA</span> estimates for 2022‑23 on <strong>27 May 2026</strong>. The report shows that the share of <span class="key-term" data-definition="Out‑of‑Pocket Expenditure (OOPE) — Direct payments made by households for health services, not reimbursed by insurance or government. High OOPE indicates financial burden on citizens (GS3: Economy)">OOPE</span> in total health spending has dropped from <strong>64.2% in 2013‑14</strong> to <strong>43.4% in 2022‑23</strong>. At the same time, <span class="key-term" data-definition="Government Health Expenditure (GHE) — Total spending by the central and state governments on health, expressed as a share of GDP or total government outlay (GS3: Economy)">Government Health Expenditure</span> rose from <strong>1.15% to 1.43% of GDP</strong> and per‑capita spending increased almost three‑fold.</p> <h3>Key Developments</h3> <ul> <li>OOPE share fell by <strong>21 percentage points</strong> over a decade, indicating reduced financial strain on households.</li> <li>Government health outlay grew to <strong>1.43% of GDP</strong> and to <strong>4.89% of total government expenditure</strong> in 2022‑23.</li> <li>Per‑capita government health spending rose from <strong>₹1,042 to ₹2,786</strong> between 2013‑14 and 2022‑23.</li> <li>During the COVID‑19 emergency (2021‑22), health spending peaked at <strong>1.84% of GDP</strong>, pushing OOPE down to <strong>39.4%</strong> for that year.</li> <li>Social security health spending increased from <strong>6% to 9.9%</strong> of total health outlay.</li> <li>Private health insurance coverage grew from <strong>3.4% to 9.2%</strong> of total health financing.</li> </ul> <h3>Important Facts</h3> <ul> <li>The decline in OOPE is attributed to the operationalisation of over <strong>1.8 lakh</strong> <span class="key-term" data-definition="Ayushman Arogya Mandir — Government‑run wellness centres offering free preventive and curative services, part of the Ayushman Bharat scheme (GS3: Economy, GS4: Ethics)">Ayushman Arogya Mandir</span> centres across India.</li> <li>These centres provide free services under 12 expanded packages, covering reproductive health, communicable and non‑communicable diseases, free drugs, diagnostics, tele‑consultations, and wellness sessions.</li> <li>Pharmaceutical purchases—including vitamins, protein supplements, and other health supplements—remain the largest driver of OOPE.</li> <li>The report follows the <span class="key-term" data-definition="System of Health Accounts (SHA) 2011 — International classification used to record health financing flows, adopted by India for NHA reporting (GS3: Economy)">System of Health Accounts (SHA) 2011</span> framework, prepared by the National Health Accounts Technical Secretariat (NHATS).</li> </ul> <h3>UPSC Relevance</h3> <p>Understanding the shift in health financing is crucial for <strong>GS Paper III (Economy)</strong>. The data illustrate how increased public spending can lower OOPE, a key indicator of financial protection in health. Aspirants should link these trends to the broader goals of Universal Health Coverage, the Ayushman Bharat programme, and the Sustainable Development Goals (SDG‑3). The rise in private health insurance also reflects changing consumer behaviour and the role of the insurance sector in health security.</p> <h3>Way Forward</h3> <ul> <li>Strengthen the quality and reach of <span class="key-term" data-definition="Ayushman Arogya Mandir — Government‑run wellness centres offering free preventive and curative services, part of the Ayushman Bharat scheme (GS3: Economy, GS4: Ethics)">Ayushman Arogya Mandir</span> to further reduce OOPE, especially in rural and underserved areas.</li> <li>Promote price regulation of essential medicines and supplements to curb the pharmaceutical component of OOPE.</li> <li>Encourage public‑private partnerships that expand affordable private health insurance while maintaining regulatory safeguards.</li> <li>Continue systematic tracking using the <span class="key-term" data-definition="System of Health Accounts (SHA) 2011 — International classification used to record health financing flows, adopted by India for NHA reporting (GS3: Economy)">SHA 2011</span> framework to monitor financing trends and guide policy adjustments.</li> </ul>