The chapter assesses the distribution in India of public subsidies for health care across different groups, classified by per capita expenditure, using the benefit incidence analysis method. First, the analysis finds that health subsidies are not particularly well targeted to the poor in India, especially among those living in rural areas and in the poorer states. Second, the distribution of health subsidies is primarily driven by the magnitude of subsidies and utilization patterns related to hospital-based care. The distribution of subsidies for primary care and for several services associated with maternal and child health (pre- and postnatal care, immunizations, and the like) is targeted more effectively than curative care. Third, the unequal distribution of subsidies for inpatient stays may be consistent with the public sector performing a key role of insuring poorer patients against expensive illness episodes. This is suggested by the observation that poorer patients and poorer states use relatively more of publicly provided hospital services than private hospital services, compared with their richer counterparts. However, meeting the insurance objectives appears to involve a tradeoff: although there is greater insurance coverage for the poor, large amounts of public subsidies go to the rich, especially those living in rural areas. The findings of this chapter lend further empirical weight to the association of the distribution of public subsidies for health care with the problem of physical access to care. Distance seems to disproportionately affect the utilization behavior of the poor in India, as suggested by the distribution of inpatient days in public hospitals among residents of rural areas and the much more equitable allocation of subsidies among urban respondents. Availability of private care also appears to influence the distribution of subsidies.