The hidden cost of ageing: measuring the impact of health expenditure on poverty among households with older adults in India

According to the World Bank’s poverty and inequality platform, 11.09% of India’s population lived below the international poverty line of $2.15 (2017 PPP) per day in 2018. Moreover, 48.2% of total health expenditure is financed through out-of-pocket payments (OOPHE), underscoring their role in driving households into poverty. With 31.4% of households reporting at least one older adult (census 2011), this study focuses on the impoverishing effects of OOPHE among older adults-inclusive households. Using nationally representative data from the NSS 75th round: household social consumption – health (2017–2018), we estimate the poverty headcount and poverty gap at the household level, before and after accounting for OOPHE for households with at least one older adult member. We further employ a binary logistic regression to identify socio-economic and demographic determinants of post-OOPHE impoverishment. The results show that longer hospitalization spells, larger household size, caste status, and reliance on private healthcare significantly elevate the risk of falling into poverty. In contrast, health insurance coverage and higher educational attainment reduce this risk. Despite multiple public schemes and insurance initiatives, coverage remains inadequate and uneven, leaving a substantial share of older adults financially unprotected. These findings point to an urgent need to expand and strengthen publicly financed health insurance and financial risk protection, with targeted safeguards for households with older adults, to prevent healthcare costs from exacerbating poverty.