This study investigates the incidence, intensity, and correlates of catastrophic health payments in India. The paper confirms the continuing high incidence of catastrophic health payments and increase in poverty headcount and poverty gap due to health payments. Despite India’s remarkable economic growth, catastrophic health spending remains a major cause of poverty. Using bivariate analysis and Heckman sample selection and multinomial logistic regression for multivariate regression analysis, the paper finds that health payments were 4.6% of total household expenditure and 9.7% of household nonfood expenditure. Poverty headcount increased from 27.5% to 31.0% due to health payments, which translates to 39.5 million people falling below the poverty line due to health payments. It is important for India to develop effective risk pooling arrangements for health care.
Asian Development Bank: ERD Working Paper No.102, 32 pp.