Health Insurance for Universal Health 
Coverage in India

The role of health insurance in expanding Universal Health Coverage is to ease the access to healthcare services and reduce the risk of unexpected health expenditure burden. In order to examine this role, this article assesses the contribution of enrolment in health insurance on the utilisation of healthcare services and out-of-pocket expenditure for working-age Indians. Investigation into these two issues, addressing the self-selection/endogeneity problem in buying health insurance, is uncommon in the literature. Against this end, the probability of utilising healthcare services and the incurred out-of-pocket expenditure has been estimated using National Sample Survey (2017–2018) data in India. Empirical findings reveal evidence of endogeneity in health insurance enrolment for hospitalisation, which indicates the presence of self-selection in health insurance enrolment. Addressing the endogeneity problem, this study has found a higher probability of utilising hospitalisation and lower out-of-pocket expenditure among insured individuals than others. Socio-economic and demographic variables like household income, education, gender, religion and state of residence are important to determine the utilisation of healthcare facilities. On the other hand, while out-of-pocket expenditure incurred for hospitalisation significantly varies with age, gender, social caste, religion, working status, state of residence, nature of ailment and type of hospital, household income and health status have no significant effect on out-of-pocket expenditure. Poor people are less likely to be hospitalised, and compared to males, females have a higher probability of utilising healthcare services at their reproductive age. State-level health policies and health insurance schemes play a crucial role in determining health insurance participation and utilisation of health services. JEL: C13, C21, C25, I10, I11, I13, I14, I18