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From Enrolment to Financial Protection: Does Health Insurance Provide Financial Protection against Road Traffic Injuries in India?

Author

Listed:
  • Mishra, Shruti
  • Goli, Srinivas

Abstract

Health insurance is widely promoted as a key instrument for household financial risk protection. However, its association in mitigating the financial consequences of large, stochastic shocks such as road traffic accidents and injuries (RTAIs) remains insufficiently understood. This paper examines how health insurance coverage is associated with healthcare utilization and financial risk in India. Using pooled National Sample Survey data from 2004-2018 and applying an instrumental variable strategy, we explore these relationships and demonstrate that conventional models offer only limited perspective. A standard Probit model suggests that insurance coverage is associated with an 11.1 percentage point lower probability of incurring catastrophic health expenditure (CHE). However, our analysis based on an instrumental variable framework do not show a statistically significant association between insurance and financial protection. In contrast, having an insurance is associated with a 151% higher level of out-of-pocket (OOP) health spending, indicating improved access to healthcare. This pattern appears particularly regressive: the poorest households allocate more than 100% of their consumption to medical care, and insurance coverage is not associated with any reduction in this burden. These results underscore a significant contradiction: while existing schemes are linked to increased healthcare utilization, they do not fulfil the essential role of providing financial protection. We propose that policy should shift from merely focusing on enrolment to creating contracts that enhance coverage depth, manage costs effectively, and ensure equitable protection-transforming insurance from simply a means of access into a tool for consumption smoothing.

Suggested Citation

  • Mishra, Shruti & Goli, Srinivas, 2026. "From Enrolment to Financial Protection: Does Health Insurance Provide Financial Protection against Road Traffic Injuries in India?," EconStor Preprints 340191, ZBW - Leibniz Information Centre for Economics.
    • Handle: RePEc:zbw:esprep:340191
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    File URL: https://www.econstor.eu/bitstream/10419/340191/1/WPAccidental_Injury.pdf
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    References listed on IDEAS

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    1. Louis Eeckhoudt & Anna Fiori & Emanuela Rosazza Gianin, 2018. "Risk Aversion, Loss Aversion, and the Demand for Insurance," Post-Print hal-02987006, HAL.
    2. A. Akhtar & Nadeem Ahmad & Indrani Roy Chowdhury, 2020. "Socio-economic inequality in catastrophic health expenditure among households in India: A decomposition analysis," Indian Economic Review, Springer, vol. 55(2), pages 339-369, December.
    3. Louis Eeckhoudt & Anna Maria Fiori & Emanuela Rosazza Gianin, 2018. "Risk Aversion, Loss Aversion, and the Demand for Insurance," Risks, MDPI, vol. 6(2), pages 1-19, May.
    4. Imran Ashraf & Soojung Hur & Muhammad Shafiq & Yongwan Park, 2019. "Catastrophic factors involved in road accidents: Underlying causes and descriptive analysis," PLOS ONE, Public Library of Science, vol. 14(10), pages 1-29, October.
    5. World Bank, 2021. "Traffic Crash Injuries and Disabilities," World Bank Publications - Reports 35164, The World Bank Group.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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