Factors affecting the incidence of health insurance penetration among elderly: Evidence from India

• Published date: 01 February 2023
• Author: Chandrima Chatterjee,Narayan Chandra Nayak,Jitendra Mahakud
• Date: 01 February 2023
• DOI: http://doi.org/10.1002/pa.2848

RESEARCH ARTICLE

Factors affecting the incidence of health insurance penetration

among elderly: Evidence from India

Chandrima Chatterjee

1

| Narayan Chandra Nayak

2

| Jitendra Mahakud

2

1

Narsee Monjee Institute of Management

Studies (Deemed to be University), Hyderabad,

India

2

Indian Institute of Technology Kharagpur,

Kharagpur, India

Correspondence

Chandrima Chatterjee, Narsee Monjee

Institute of Management Studies (Deemed to

be University), Hyderabad, India.

Email: c.chandrima2015@gmail.com

A thrust on insurance-financed health systems may reduce Out-of-pocket health

spending. But health insurance penetration among Indian elderly is abysmally low. In

this context, the paper intends to examine the factors affecting demand for various

types of insurances among Indian elderly. Data were drawn from 71st round (2014–

15) “Key Consumption: Health”household survey data collected by National Sample

Survey Organization (NSSO), Government of India. A total number of 27,245 older

adults were selected for this study. In addition to basic descriptive statistics, we

employ logistic regression models to conduct the econometric analysis. Socioeco-

nomic, health-related and contextual predictors are considered in this study. The

results show that the probability of health insurance coverage among elderly signifi-

cantly depends on income, education, disease types, caste, family size, and most

importantly, social relationships. The underprivileged groups have higher likelihood

to be covered by government-funded insurance, while the older people with higher

income and education, having spouses and less number of children, and residing in

urban areas have a higher likelihood of purchasing private health insurance. The

study identified the factors responsible for low demand for health insurance among

elderly. The study suggests the expansion of private insurance network, especially, in

the underserved rural areas, along with generating financial awareness among the

elderly. The study also suggests an inclusive model of health insurance demand,

which may be adopted by future empirical studies to find out the significant factors

affecting health insurance demand.

KEYWORDS

elderly, govt.-funded insurance, health insurance, India, logistic regression, private insurance

1|INTRODUCTION

Population aging carries important ramifications on health care financ-

ing. As the aging population demands higher health care utilization,

there is a concomitant high out-of-pocket (OOP) expenditure incurred

by the elderly. There is no doubt that public health expenditure has a

significant impact in improving overall health of the community (Al-

Azri et al., 2020). But public health spending in India is considerably

low and inefficient as it is found that Indian states are spending on

education more efficiently than on health (Mohanty & Bhanumurthy,

2021). In the absence of adequate public transfer, older Indian adults

heavily rely on their own assets and accumulated wealth to finance

their consumption, including health care consumption (UN, 2020).

Under this situation, private health insurance can be the way out to

reduce OOP health expenditure.

Until recently, most low- and middle-income countries depended

primarily on household out-of-pocket (OOP) payments, which are

both wasteful and inequitable. As a result, OOP creates financial ruin

and destitution of the vulnerable households. India is of no exception.

The Indian health financing scene also faces a number of challenges,

including rising health-care costs, a high financial burden on the poor

that is reducing their incomes, an increase in the burden of new

Received: 6 October 2021 Revised: 6 September 2022 Accepted: 10 November 2022

DOI: 10.1002/pa.2848

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https://doi.org/10.1002/pa.2848