NSO Survey Shows Sharp Rise in Insurance Coverage, Decline in Out-of-Pocket Costs

The survey highlights the rapid expansion of primary healthcare infrastructure, with over 1.84 lakh Ayushman Arogya Mandirs (AAMs) now operational across the country.

India's healthcare landscape is undergoing a significant transformation, with improved access, affordability, and utilisation driven by sustained government investment and large-scale public health interventions, according to the latest findings from the National Statistical Office (NSO) 80th Round Household Consumption: Health Survey.

Covering over 1.39 lakh households across rural and urban India, the survey provides one of the most comprehensive snapshots of the country's healthcare ecosystem, revealing a decisive shift toward greater public health reliance, reduced financial burden, and increased health-seeking behaviour.

Out-of-Pocket Costs Fall Sharply, Free Healthcare Expands

One of the most notable findings is the significant reduction in out-of-pocket expenditure (OOPE), a long-standing barrier to healthcare access in India.

The median OOPE per hospitalisation in 2025 stands at ₹11,285, indicating that for more than half of hospital cases, costs remain relatively manageable. In public health facilities, the financial burden is even lower, with median expenditure dropping to just ₹1,100.

For outpatient care, the data reveals a transformative shift:

• Median OOPE in public facilities is zero, meaning a large proportion of patients receive essential healthcare services completely free of cost.

This improvement is attributed to flagship initiatives such as:

• Free Drugs Service Initiative (FDSI)

• Free Diagnostics Initiative (FDI)

These programmes have ensured widespread availability of medicines and diagnostic services, even in remote regions.

Primary Healthcare Network Expands to 1.84 Lakh Centres

The survey highlights the rapid expansion of primary healthcare infrastructure, with over 1.84 lakh Ayushman Arogya Mandirs (AAMs) now operational across the country. These centres are delivering comprehensive care—including preventive, promotive, and curative services—closer to communities.

Digital health innovations and improved diagnostic networks, including hub-and-spoke models with sample transportation, have further strengthened service delivery across all levels of care.

Additionally, the AMRIT initiative, with over 220 pharmacies nationwide, is providing more than 6,500 medicines at discounts of up to 50%, significantly improving treatment affordability.

Insurance Coverage Triples, Strengthening Financial Protection

Government-backed health insurance schemes have expanded dramatically, offering financial protection to millions of households.

Coverage has increased more than threefold:

• Rural areas: from 12.9% to 45.5%

• Urban areas: from 8.9% to 31.8%

This surge is largely driven by schemes such as Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PM-JAY), which has reduced catastrophic healthcare spending and improved access for economically vulnerable populations.

Importantly, the survey shows that the lowest income groups are benefiting the most, with declining out-of-pocket costs among the bottom consumption quintiles.

Health Awareness and Demand on the Rise

Improved affordability has coincided with a sharp increase in healthcare demand, reflecting greater awareness and proactive health-seeking behaviour.

The Proportion of Population Reporting Ailments (PPRA) has nearly doubled:

• Rural: from 6.8% to 12.2%

• Urban: from 9.1% to 14.9%

This rise indicates that more people are seeking medical attention rather than delaying treatment due to cost or accessibility barriers.

Shift Toward Public Healthcare Facilities

The utilisation of public healthcare facilities continues to grow, particularly in rural India.

• Outpatient care usage in rural areas has increased from 33% to 35%

• Long-term trends show a rise from 28% in 2014 to 35% in 2025

This shift reflects improved trust in public healthcare systems, supported by better infrastructure, availability of free services, and expanded primary care networks.

Epidemiological Transition: Rise of Lifestyle Diseases

The survey also captures a significant shift in disease patterns. While infectious diseases are declining, non-communicable diseases (NCDs) such as diabetes and cardiovascular conditions are on the rise.

This transition highlights the growing importance of:

• Preventive healthcare

• Early screening programmes

• Lifestyle and behavioural interventions

Government-led awareness campaigns and community-level platforms like Village Health, Sanitation and Nutrition Committees (VHSNCs) are playing a key role in addressing these challenges.

Maternal Healthcare Indicators Improve Further

India has also made steady progress in maternal and child health outcomes.

Institutional deliveries have increased significantly:

• Rural areas: from 90.5% to 95.6%

• Urban areas: from 96.1% to 97.8%

Government schemes such as:

• Janani Suraksha Yojana (JSY)

• Janani Shishu Suraksha Karyakaram (JSSK)

• Pradhan Mantri Surakshit Matritva Abhiyan (PMSMA)

have contributed to safer pregnancies and improved access to quality maternal care.

A Strong Push Toward Universal Healthcare

The NSO findings reinforce the government's long-term strategy of building an affordable, accessible, and equitable healthcare system.

With increased public spending, expanded insurance coverage, and strengthened primary healthcare infrastructure, India is moving closer to achieving universal health coverage—ensuring that quality healthcare is not a privilege, but a right for all citizens.