Despite government efforts to control health expenditures in India, households in Kerala’s Pathanamthitta district face substantial out-of-pocket expenses (OOPE) for medical care, forcing them to rely on hardship financing through borrowing and asset sales. This qualitative study, based on 50 in-depth interviews and 5 key informant interviews across six grama panchayats and one municipality, examined how financial shocks from illness impact poor households. The findings reveal that existing public hospitals and government insurance schemes fail to adequately protect households from financial and emotional strain due to high OOPE, particularly for drugs. Households typically progress from borrowing to asset sales as poverty deepens, resulting in reduced household consumption and foregone medical care. The study calls for policy reforms that address high drug costs and implement comprehensive financial protection and social welfare programs to prevent socio-economic damage from healthcare expenses.
