[This article was originally published in World Health & Population, 14(4)]

In this paper, we examine the relationship between socio-economic status (SES) and the usage of in-patient services, and analyze the impact of introducing health insurance in India – a major developing country with poor health outcomes. In contrast to results of similar works undertaken for developed countries, our results reveal that the positive relation between usage of in-patient services and SES persists even in the presence of health insurance. This implies that health insurance is unable to eliminate the inequities in accessing healthcare services that stem from disparities in SES. In fact, insurance aggravates inequity in the healthcare market. The study is based on unit-level data from the 2005–06 Morbidity and Health Care Survey undertaken by National Sample Survey Organization.

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