Health care can be expensive for the un-insured, often constituting a potential poverty trap. Urban India is particularly vulnerable to this possibility given the greater demand for health, absence of a structured health care system, overburdened public institutions, ubiquitous, and unregulated private health care market and the generic paucity of public funds. Using nationally representative household level data for two points of time and a suitable alteration of an existing methodology, this article computes the degree and depth of impoverishment from out of pocket medical expenses, and its variation across states and select socioeconomic characteristics. Roughly 6 percent of the urban population or about 18 million people face impoverishment entirely due to out of pocket medical expenses in India. There are substantial inter-state and inter-group variations in the incidence of this burden. The findings are potentially crucial as India prepares to embark on its journey toward universal health coverage.
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