Universal Health Coverage in India
In a timely resolution to address stark disparities in access to care, India reaffirmed its commitment to health equity at the 78th World Health Assembly, which was held recently. By expanding comprehensive healthcare, improving health infrastructure, and accelerating digital adoption, Ayushman Bharat is poised to revolutionize the healthcare industry and provide remarkable outcomes. India’s commitment to achieving Universal Health Coverage (UHC) by 2030 is centered on it.
Reducing Out-of-Pocket Expenses: A Positive Shift
A significant part of India’s flagship Ayushman Bharat initiative, the Pradhan Mantri Jan Arogya Yojana (AB PM-JAY) offers complete hospitalization coverage and financial risk protection to an estimated 500 million individuals, or around 40% of the nation’s entire population. Out-of-pocket expenses (OOPE), which traditionally make up 60–70% of overall healthcare spending, have dropped to 39.4% in India, according to the most recent National Health Accounts figures (2021–22). Although it is uncertain whether this tendency will persist over time, this is a positive change.
Post-COVID Healthcare Boom and Market Trends
Since the COVID-19 epidemic, there have been more healthcare listings on Indian stock markets due to the entry of corporate hospitals, diagnostic chains, pharmaceutical firms, vaccine makers, medical device companies, and health insurers. Industry forecasts indicate that India’s healthcare sector would increase from its 2022 estimate of $370 billion to $610 billion by 2026. The hospital sector alone receives about half of all foreign direct investment in healthcare, and private equity firms are especially interested in this sector. Corporate hospitals in Tier 2 and Tier 3 cities have been combining and purchasing companies simultaneously to expand their market share and optimize profits.
The Risks of an Insurance-Led Healthcare Model
Insurance models are crucial for financial security in the face of the rapidly expanding for-profit medical industry, notwithstanding their more auxiliary role. Insurance-led solutions, which are theoretically presented as a solution to UHC, have the potential to raise costs and, as has been seen in the US, exacerbate health outcome discrepancies, access barriers, and exclusion. A significant rise in corporate funding and a definite shift towards an insurance-led model have put India’s health system at a turning point. Therefore, it is crucial to think about how this paradigm may impact the delivery of accessible and reasonably priced healthcare.
Demographic and Epidemiological Shifts Reshape Healthcare Demand
A combination of demographic shifts, an epidemiological shift, and pro-private sector policies such as 100% foreign direct investment (FDI) in health insurance are making the healthcare environment more conducive to private sector growth. The UN World Population Prospects predicts that by 2050, the percentage of adults 60 and older will rise from 10% to 30%. Simultaneously, the burden of non-communicable diseases is rising, including diabetes, cancer, heart disease, and chronic respiratory disorders. Research indicates that their mortality rates have risen from 37% in 1990 to more than 60% at present. India’s low costs and highly skilled workforce have made it a popular destination for medical tourists, with a compound annual growth rate (CAGR) of about 17–19 percent.
Infrastructure Gaps and the Growth of Private Healthcare
Infrastructure shortages persist, with a skewed distribution concentrated in metropolitan regions and a bed-to-population ratio of only 1.5 per 1,000, much below the WHO benchmark. According to predictions, these supply and demand dynamics would have an impact on hospitalization rates and tertiary care utilization, which will raise the demand for specialist services that are mostly offered by the private sector. There is a reciprocal relationship between the corporate healthcare sector’s growth and the expanding health insurance ecosystem.
The “Missing Middle” and Insurance Coverage Gaps
According to the 75th Round research, which was carried out by the National Sample Survey Office (NSSO) between 2017 and 2018, more than two-thirds of OOPE in India obtain outpatient care, with more than 70% of outpatient services being sought in the private sector. PM-JAY and commercial health insurance policies, which mainly cover hospitalization and serve as financial safety nets against catastrophic inpatient spending, nonetheless mostly exclude outpatient treatment.
According to NITI Aayog’s Health Insurance for India’s Missing Middle report, 400 million people, or almost 30% of the population, lack health insurance of any type, leaving them vulnerable to financial shocks. This cohort includes people from a wide range of socioeconomic backgrounds and all wealth quintiles. The older population, which often has many chronic conditions, spends a lot of money on outpatient care, prescription drugs, and diagnostics—all of which are typically not covered by insurance plans.
Upper-income quintiles choose private insurance plans, whereas lower-income quintiles depend on government-funded programs such as PM-JAY, which have capped treatment rates that are often far lower than what commercial insurers or cash-paying consumers are charged for the same procedures. This results in unfair and unethical pricing practices, especially for underprivileged individuals who cannot negotiate. Because insurers and providers have little incentive to limit costs, they perpetuate a cycle of overtreatment and escalating rates that can cause financial hardship even for the middle class. This paradigm undermines the UHC principles that access should be based on need rather than purchasing power.
Global Lessons: Japan and Thailand’s Universal Health Systems
Models of the global health transition towards universalism, like Japan’s standardized pricing and mandatory insurance or Thailand’s tax-financed complete coverage with public sector investment, are wonderful examples of inclusive healthcare that India may learn a lot from. Although the private sector is involved in most countries to some extent, over-reliance without matching public sector investment could eventually endanger sustainability and equity.
NFHS-5 (2019–21) reports that 57% of women aged 15–49 are anemic and around 35% of children under five are stunted, reflecting broader socioeconomic problems. This highlights the need for multisectoral coordination and strategic investment in primary and preventive healthcare by focusing on biological and social reasons.
The Path Forward: Inclusive Healthcare and Public Sector Strengthening
To build a strong public health system, the principles of the Alma-Ata Declaration and the Bhore Committee—equal access to basic healthcare and community involvement, as well as structured and incremental investment as a larger percentage of GDP in health and social sector programs—must be reaffirmed. Strict regulatory frameworks are equally important for corporate hospital advertising, medical devices, medications, and diagnostics. Following China’s example, effective prescription audit systems that spot unnecessary medical procedures and promote responsible drug use can be developed using information technology.
The article “The road to Universal Health Coverage in India” that appeared in The Indian Express on May 30, 2025, served as the basis for this editorial. The article illustrates the Ayushman Bharat campaign for universal health coverage, pointing out disparities such as the 400 million people without insurance and emphasizing the need to strike a balance between increased public investment in primary care and the rapidly expanding private healthcare industry.