According to the latest government survey by the Ministry of Statistics and Programme Implementation (MoSPI), nearly half of India's population is now covered by health insurance. The survey, conducted as part of the 80th round of the National Sample Survey (NSS) between January and December 2025, covered 1.39 lakh households across 17,520 sample units nationwide. Health insurance coverage has risen sharply, with 47.4% of rural residents and 44.3% of urban residents now insured, compared to only 14.1% of rural residents and 19.1% of urban residents in 2017-18. This expansion coincided with the reduction of GST on individual and family health insurance premiums to zero from 18%, effective September 22, 2025. Government-sponsored schemes accounted for the majority of enrolments, covering 45.5% of the rural population in 2025 compared with 12.9% in 2017-18, while in urban areas such schemes covered 31.8% of people, up from 8.9% earlier.
The health insurance landscape is undergoing a significant transformation with the emergence of modular or customised plans that offer unprecedented flexibility to policyholders. According to industry experts, these plans have evolved from traditional base plans with 2-3 riders to comprehensive offerings with 15-25 optional features available at different price points. Major insurers like ICICI Lombard's Elevate now offer innovative add-ons such as Infinite Care (one-time infinite claim), Power Booster (100% loyalty bonus), Jumpstart (30-day waiting period reduction), and Claim Protector. Similarly, Niva Bupa's ReAssure 3.0 provides features like Cash Bag+, Niva Bupa One membership, hospital daily cash, and pre-existing disease wait time modification. The Insurance and Regulatory Development Authority of India's (IRDAI) 2024 Master Circular explicitly required insurers to offer diverse add-ons, driving this customisation trend.
Despite the wider coverage, cost disparities remain stark across different healthcare facilities. According to the latest survey, the average out-of-pocket expenses (OOPE) per hospitalisation stood at ₹34,064 in 2025, with rural spending at ₹31,484 and urban at ₹38,688. The median expenditure was ₹11,285, indicating significant variation in healthcare costs. A study by Indranil, which deflated costs to 2014 prices, estimated outpatient OOPE at ₹16,128 in rural and ₹20,814 in urban areas during the 2017-18 period. The survey noted that while insurance coverage has expanded, accounting for 38% of the market and reaching over 50 crore people, these gains have not curbed OOPE, which still dominates health spending. In public hospitals, the average cost per hospitalisation case (excluding childbirth) was ₹6,631 at the national level, while half of the patients incurred expenses of ₹1,100 or less.
Morbidity levels have increased significantly, with 13.1% of people reporting ailments, including chronic conditions, during the last 15-day period in 2025, up from 7.5% in 2017-18. The rate was higher in urban areas (14.9%) than in rural areas (12.2%). The incidence of ailments was highest among those aged 60 years & above (43.9%), followed by the 45-59 age group (22.5%) and children aged 0-4 years (9.9%). Non-communicable diseases such as cardio-vascular and endocrine/metabolic diseases were most commonly reported after the age of 30. Among states, Kerala recorded the highest morbidity rate at 39.7%, followed by West Bengal (24.5%), Andhra Pradesh (21.1%) and Goa (18.7%). Infections were the leading cause of hospitalisation at 20.7%, followed by injuries (11.2%) and cardio-vascular and gastro-intestinal conditions (10.9% each).
The survey revealed significant progress in institutional healthcare delivery, with institutional deliveries being nearly universal, with around 96% of births in the past 365 days occurring in hospitals. In rural areas, 95.6% of births occurred in institutions, while only 4.4% took place at home, while in urban areas institutional deliveries were even higher at 97.8%, with just 2.2% at home. This represents a major shift from traditional home deliveries to formal healthcare facilities, indicating improved access to quality medical care across both rural and urban India. Access to ante-natal care was almost universal at 98%, while post-natal care coverage exceeded 90% in both rural and urban areas. Hospitalisation rates stood at 2.9% over a 365-day period, with higher incidence in urban areas (3.2%) compared to rural areas (2.7%), and the rate was highest among the elderly at 8.1%.
