Over 38% of Indians remain uninsured despite sector growth

An estimated 14% of the population opts for private voluntary health insurance.

India’s healthcare sector faces a significant coverage gap, with over 70% of middle-income earners lacking health insurance, according to Praxis Global Alliance’s report.

Whilst government programs like Ayushman Bharat Yojana and various state extension schemes provide comprehensive hospitalisation coverage to around 69% of the low-income population, and public sector employees (15% share), are covered under CGHS and ESIS schemes, a considerable portion remains uninsured. 

An estimated 14% of the population opts for private voluntary health insurance, which contributes to a more diverse healthcare financing model.

Despite these initiatives, approximately 38% of Indians still lack any form of health insurance. 

The Indian healthcare sector, valued at $216b in FY23, is set for rapid growth, projected to reach $456b by 2028 (FY 2028) with a compound annual growth rate (CAGR) of 16%. 

Diagnostics is a key segment within this sector, making up about 6% of the market. This segment is expected to grow at a CAGR of 14%, reaching $25b by FY 2028, driven by factors such as rising life expectancy, a growing middle class, and expanded government insurance coverage.

A notable challenge in the sector is the demand-supply gap, with India requiring an additional 3 million hospital beds to reach a target of 3 beds per 1,000 people by 2025. 

This gap indicates significant potential for infrastructure expansion. Increasing insurance penetration, which now covers around 14% of the population, is helping to lower out-of-pocket expenses for diagnostics, leading to higher utilization rates. 

Government initiatives, including the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), further support growth by expanding insurance coverage and increasing the patient base.