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In this study an attempt is made to explore elasticity of health insurance demand in India. It is important to note that both the Central and state governments have been trying to help people through their budgetary policies. Keeping in view their efforts and rural urban disparities in the country, we have tried to make an attempt to evaluate whether the people have been provided appropriate information about these governmental policies and how other socio economic factors are influencing the individual household choices to adopt a particular type of health insurance scheme.

This is based on latest National Family Health survey which provides health insurance demand data for rural and urban areas as well as aggregate level using household as units. Using logit model our results indicate that both in rural and urban areas these efforts have helped people to adopt suitable alternatives and the results indicate that socioeconomic factors and rising levels of income in urban areas relatively to rural areas have been reflected in more responsive nature of choices for different health insurance schemes. By contrast, though the impact of these factors is also significant in rural areas but with a lower elasticity of demand for health care insurance.