Asia led by China and India, with a health protection gap of $1.8 trillion, has the most in the segment in the world, according to a study by global reinsurer Swiss Re.


The health protection gap is driven by the large population, low disposable incomes, high out-of-pocket medical expenses and low health insurance ownership levels in these markets.The health protection gap is the sum of two components: (1) the level of "stress" that spending has on household finances; and (2) the incidence of people not seeking treatment due to affordability.


A report by the reinsurer, titled, “Asia’s Health Protection Gap: Insights for building greater resilience”, shows that both China and India  have a high share of out-of-pocket expenses—30% in China and 65% in India—which are much higher than that of mature markets globally at 10-14%. In addition, China and India represent more than 75% of total nontreatment cases in Asia, affecting around 32m households.


By country, the estimated health protection gap is largest in China (USD 805 billion), followed by India (USD 369 billion) and Japan (USD 218 billion. Their large populations and lower aggregate income levels drive the gaps in China and 

India. In Japan, South Korea and the other mature markets, the gaps are explained by population size and the higher costs of healthcare. 


The estimated gap is the lowest in Thailand, where provision of healthcare through a subsidised universal healthcare system has resulted in the country having one of the lowest levels of out-of-pocket medical expenses in the region.

The health protection gap in Asia reached $1.8trn in 2017, according to the study which compares the health protection gap across 12 Asian markets, namely China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand, Taiwan and Vietnam. The gap represents 40m households across Asia foregoing medical treatment to avoid financial stress.


Out-of-pocket spending on healthcare in emerging Asia constituted almost 18% of net household income  and, according to the responses to our survey, more than half of that spending was a source of financial stress. Absent remedial action, we expect the health protection  gap across all Asia to widen in the coming years given the ageing societies in many markets, and high growth of medical inflation relative to average incomes.


In absolute USD terms, the estimated average size of the gap for all households in mature Asia is more than three times that in emerging Asia,  a reflection of the higher cost of treatment in the mature markets. 

However, the average size of the estimated gap as a percentage of annual household income (again, for all households) is lower in mature than in emerging Asia.


By market, the average size of the estimated gap for all households is the biggest in Singapore, followed by Hong Kong and South Korea. 

As per the survey estimates, more than 40 million households in Asia could not afford necessary treatment: this represents 1 out of 24 households in Asia that are unable to access required treatment. 


Every year, around 100 million people around the world, mostly in low-income  countries, fall into poverty on account of having to pay for healthcare treatment.Stakeholders have attempted to better protect individuals and households from the financial fallout of large and often unexpected spending for medical care and  services.