Population Aging and Health Expenditure in Kerala: An Empirical Analysis

Yadawendra Singh, National Institute of Public finance and Policy

Kerala, being the first Indian state to achieve the below replacement level fertility, has the highest proportion of elderly in India as well. This high proportion of elderly has implication on health expenditure because of the high morbidity prevalence among them. Given this prelude, the paper examines the burden of aging in terms of health expenditure in Kerala. The study found that the proportion of elderly having at least one ailment is much higher in Kerala compared to other Indian states. The empirical evidence showed that per capita cost of hospitalization per year for the elderly is four times higher than that of non-elderly in Kerala. The regression result also corroborates this finding. The simulations of future disease burden revealed that due to increasing number of elderly in Kerala the burden of managing the cost of diseases will increase significantly in coming future. The result has significant policy implications for public health policies.