Impact of Publicly Funded Health Insurance Scheme on Risk Coping Strategies against Health Expenses in Kerala

Main Article Content

Anushree S. Panikkassery


The aim of the paper is to determine whether publicly funded insurance schemes have significantly enabled poor households to come out from expensive coping strategies such as borrowing and sale of assets in the State of Kerala, India. This cross-sectional study used data collected from a primary survey in the Palakkad district of Kerala. Duration of the study is from January 2018 to January 2019. A total sample of 408 poor households including both insured and uninsured were collected in a primary survey using a structured schedule. Probit and log-linear regressions were employed to determine the impact of insurance coverage for the poor on risk coping strategies such as borrowing and sale of assets. Probit regression results showed that uninsured households have around 32% higher probability of borrowing (P value-0.003) compared to insured households whereas sale of assets as a coping strategy did not yield any significant results. Results showed a negative significant relationship between insurance coverage and risk coping strategy of borrowing. The amount and probability of borrowing were found significantly lower among insured households for inpatient care. But the sale of assets did not have any significant impact from the insurance coverage.

Risk coping strategies, publicly funded health insurance, borrowing, sale of assets, health shock, health expenses.

Article Details

How to Cite
Panikkassery, A. S. (2021). Impact of Publicly Funded Health Insurance Scheme on Risk Coping Strategies against Health Expenses in Kerala. Asian Journal of Economics, Business and Accounting, 21(1), 17-28.
Original Research Article


Alam K, Mahal A. Economic impacts of health shocks on households in low and middle income countries: A review of the literature. Globalization and health. 2014;10:1-18.

Bonfrer I, Gustafsson-Wright E. Health shocks, coping strategies and foregone healthcare among agricultural households in Kenya. Global Public Health. 2017;12:1369–1390.

Wagstaff A, Doorslaer VE. Paying for health care: quantifying fairness, catastrophe, and impoverishment, with applications to Vietnam, 1993–98. The World Bank; 2001.

Whitehead M, Dahlgren G, Evans T. Equity and health sector reforms: Can low-income countries escape the medical poverty trap? The Lancet. 2001;358:833–836.

Kruk ME, Goldmann E, Galea S. Borrowing and selling to pay for health care in low- and middle-income countries. Health Affairs. 2009;28:1056–1066.

Dercon S. Income risk, coping strategies, and safety nets. The World Bank Research Observer. 2002;17:141–166.

Quintussi M, Van de Poel E, Panda P, Rutten F. Economic consequences of ill-health for households in northern rural India. BMC health services research. 2015;15:1–11.

NSSO. Key indicators of social consumption in India: Health, 75th Round (July 2017–June 2018). New Delhi: GOI; 2019.

Selvaraj, Sakthivel, Habib Hasan Farooqui, Anup Karan. Quantifying the financial burden of households’ out-of-pocket payments on medicines in India: A repeated cross-sectional analysis of National Sample Survey data, 1994–2014. BMJ open 8.5; 2018.

Damme, Wim Van, et al. Out‐of‐pocket health expenditure and debt in poor households: Evidence from Cambodia. Tropical Medicine & International Health 9.2. 2004:273-280.

Rao M, Katyal A, Singh P V, Samarth A, Bergkvist S, Kancharla M. Changes in addressing inequalities in access to hospital care in Andhra Pradesh and Maharashtra states of India: A difference-in-differences study using repeated cross-sectional surveys. BMJ open. 2014;4:1-15.

Bergkvist S, Wagstaff A, Katyal A, Singh P V, Samarth A, Rao M. What a difference a state makes: Health reform in Andhra Pradesh. The World Bank; 2014.

Fan VY, Karan A, Mahal A. State health insurance and out of pocket health expenditures in Andhra Pradesh, India. International journal of health care finance and economics. 2012;12:189–215.

O’Donnell O, Van Doorslaer E, Rannan-Eliya RP, Somanathan A, Adhikari SR, Akkazieva B, et al. Who pays for health care in Asia? Journal of health economics. 2008;27:460–475.

Berman P, Ahuja R, Bhandari L. The impoverishing effect of healthcare payments in India: New methodology and findings. Economic and Political Weekly. 2010;45:65–71.

Dekker M, Wilms A. Health insurance and other risk-coping strategies in Uganda: The case of micro care insurance ltd. World Development. 2010;38:369–378.

Babiarz P, Widdows R, Yilmazer T. Borrowing to cope with adverse health events: Liquidity constraints, insurance coverage, and unsecured debt. Health economics. 2013;22:1177–1198.

Aggarwal A. Impact evaluation of India’s ‘yeshasvini’community-based health insurance programme. Health economics. 2010;19:5–35.

Savitha B, Kiran KB. Microhealth insurance and the risk coping strategies for the management of illness in Karnataka: A case study. The International journal of health planning and management. 2015;30:145–163. 21.

Savitha B, Kiran K. Illness makes credit sick: Can health insurance rescue the poor from exploitative credit? The Geneva Papers on Risk and Insurance-Issues and Practice. 2016;41: 184–204.

Waters HR. Measuring the impact of health insurance with a correction for selection bias—a case study of Ecuador. Health economics. 1999;8:473–483.

Ju¨tting JP. Do community-based health insurance schemes improve poor people’s access to health care? evidence from rural Senegal. World development. 2004;32:273–288.

Basu P, Srivastava P. Scaling-up microfinance for India’s rural poor. The World Bank; 2005.

Basu P. Improving access to finance for India’s rural poor.The World Bank; 2006.