India’s health care numbers have been moving in the right direction for a decade. Out-of-pocket expenditure (the part of medical bills that are not paid by your health insurance), as a share of total health spending fell from 64.2% in 2013-14 to 43.4% in 2022-23, according to the ministry of health and family welfare’s National Health Accounts estimates for 2022-23 — a decline the government credits to schemes like Ayushman Bharat and expanding insurance penetration.
Viewed in isolation, that trend suggests the country’s health care affordability challenge is steadily being addressed. Yet, the lived experience of households paints a different picture. Despite improvements in insurance coverage, nearly 30% of India’s population, around 40 crore people, remain outside any financial protection for health, and even insured households continue to pay substantial out-of-pocket costs for care their policies don’t cover.
The gap between what families spend on health care each year and what insurance actually covers is what makes that household reality hard to ignore.
The improving national average does not negate financial stress at the individual level; it simply averages it over. What’s often missing from the health care conversation is not access to care, but access to the money required to pay for it.
Health insurance plays a precise and important role: It was designed around hospitalisation, surgery, ICU admission, or a medical emergency that can wipe out years of savings in a matter of days, and cashless coverage for these events has expanded significantly.
However, everyday health care spending follows a very different pattern.
Health care costs are increasingly driven by recurring expenses: monthly medication for chronic conditions, diagnostic tests, OPD consultations, physiotherapy sessions, dental treatments, and preventive care. These expenses rarely arrive as a single catastrophic bill, yet they represent a substantial and growing burden on household finances.
Medical inflation — running at an estimated 12–14% a year in India, according to industry surveys such as Aon’s Global Medical Trend Rates report is quietly amplifying this challenge. Insurance was never designed to function as a wallet for recurring health care expenditure, and no amount of incremental product modification changes that fundamental reality.
The health care challenge facing many Indian families today is no longer solely about access to treatment — India’s provider ecosystem has expanded considerably over the past decade. The more pressing challenge now lies between treatment and payment.
Many families with valid insurance coverage still delay diagnostic tests, postpone follow-up consultations, or defer treatments because the payment needs to be made immediately, while claims and reimbursements operate on entirely different timelines or may not apply at all.
When this uninsured population is combined with insured households managing routine health care expenses without dedicated financial tools, it becomes evident that health care affordability is fundamentally a cash flow and liquidity challenge. It is not a problem that can be solved through insurance coverage alone.
Solving a cash flow problem requires financial infrastructure, not simply more insurance products.
India is uniquely positioned to address this challenge because the underlying digital infrastructure already exists. UPI has created a payments backbone that reaches hospitals, pharmacies, clinics, and diagnostic centres across the country without relying on closed networks of approved providers.
Health care-specific credit solutions, structured financing models, no-cost EMIs for medical expenses, and embedded payment mechanisms can now operate at the exact point where health care spending occurs. This creates the possibility of addressing affordability challenges in real time rather than after the expense has already been incurred.
The conversation is no longer just about paying claims. It is increasingly about creating financial tools that support how health care spending actually happens.
Globally, health care financing is emerging as one of the most underserved opportunities within financial services.
Health care is urgent, recurring, and largely inevitable. However, a significant majority of financial products on the market today were not built to address health care.
As financial services move away from one-size-fits-all approaches, vertical-specific financial infrastructure begins to make sense. The healthcare industry alone is a huge category in which niche financial instruments can meaningfully lower cost and financial hardship for consumers, while improving access.
Rather than replacing insurance, these solutions can complement it — closing the payment and cost gaps in the larger health care ecosystem.
The next chapter of India’s health care journey may depend less on how much additional insurance coverage is sold and more on whether the country succeeds in building the financial layer that connects patients, providers, employers, insurers, and financial institutions.
Care has improved. Coverage has expanded. Yet health care outcomes improve most meaningfully when access to treatment is matched by access to the money required to pay for it.
That financial layer remains one of the most significant and overlooked pieces of India’s health care story.
(The views expressed are personal)
This article is authored by Chris George, co-founder & Group CEO, QubeHealth-Pay.
