More than 50% of the health expenditure is financed through out-of-pocket payments in India, imposing a colossal financial burden on households. Amidst the rising incidence of non-communicable diseases, injuries, and an unfinished agenda of infectious diseases, this study examines comprehensively the economic impact of out-of-pocket health expenditure (OOPE) across 17 disease categories in India. Data from the latest round of the National Sample Survey (2017-18), titled “Household Social Consumption: Health” was employed. Outcomes, namely, catastrophic health expenditure (CHE), poverty headcount ratio, distressed financing, foregone care, and loss of household earnings were estimated. Results showed that 49% of households experienced CHE and 15% of households fell below the poverty line due to OOPE on hospitalization and/or outpatient care. Notably, outpatient care was more burdensome (CHE: 47.8%; Impoverishment: 15.0%) than hospitalization (CHE: 43.1%; Impoverishment: 10.7%). Nearly 16% of households used distressed sources to finance hospitalization-related OOPE. Cancer, genito-urinary diseases, psychiatric and neurological disorders, obstetric conditions, and injuries imposed a substantial economic burden on households. OOPE and associated financial burden was higher among households where any member sought care in private healthcare facilities compared to those treated in public facilities across most disease categories. The high burden of OOPE necessitates the need to increase health insurance uptake and consider outpatient services under the purview of health insurance. Concerted efforts to strengthen public health sector, improved regulation of private healthcare providers, and prioritizing health promotion and disease prevention strategies are crucial to augment financial risk protection.