Morbidity,Health Expenditure and Willingness to Pay for Health Insurance amongst the Urban Poor

The study aimed to assess the demand for health insurance, gather evidence on willingness to pay (WTP) for health insurance and its determining factors amongst the urban poor in Mumbai. This was as-certained through dichotomous bidding process on 300 households (HHs). The findings reveal characteristics of a low-income group with a burden of disease and treatment financed through out-of-pocket (OOP) expenditure, which is at times catastrophic. These factors justify the demand for health care insurance in the study population expressed by one-third of the population. Results of the multivariate regression model suggest that HHs with presence of morbid conditions and prior experience of inpatient admissions were more likely to join and pay for health insurance. Within the ‘urban poor’, the relatively better-off HHs expressed greater WTP for health insurance. The results clearly indicate the need for a state-subsidized insurance scheme as more than 50 per cent of the people willing to pay expressed their inability to pay more than 1 per cent of the annual income.