Informal employment and high burden of out-of-pocket healthcare payments among older workers: evidence from the Longitudinal Ageing Study in India.

India's economy is among the fastest growing in the world. However, a large share of informal workforce is a common characteristic of country's economy, comprises a significant portion of most of its labour markets. This workforce often receives low wages and lacks benefits such as strong social security and health coverage for all. The majority of healthcare spending in India is private. As India's population ages and the informal sector expands, it is expected that many of these workers will continue to work beyond the retirement age to bear their own healthcare costs due to lack of savings, pensions, and the precarious nature of their employment. In this context, this study estimates the burden of out-of-pocket (OOP) payments on India's informal older workers compared to their formal counterparts, using data from the first wave of the nationally representative Longitudinal Ageing Study in India. According to estimates from the two-part regression model, informal older workers pay, on average, INR 1113 (P < 0.01) and INR 55 (P < 0.05) less than their formal counterparts for inpatient and outpatient care, respectively. Further, probit regression models revealed that the burden of combined (both inpatient and outpatient) OOP payments exceeding (by 40, 20 and 10%) of their income is significantly higher among informal older workers compared to formal older workers. The study underscores the need for strengthening of universal health insurance schemes to ensure everyone has access to medical services without experiencing financial hardship. It also advocates for policies specifically tailored towards informal workers, considering their unique challenges with regard to livelihoods and healthcare security. In particular, this encompasses bolstering the existing social security and healthcare system, and related policies for ensuring financial security against OOP payments, especially for informal workers and all the population in general.