Decentralized Finance (DeFi) is an emerging technology that leverages blockchain technology to facilitate peer-to-peer financial transactions without the need for intermediaries. While DeFi has primarily been applied widely in the traditional finance arena, there is growing interest in its potential application in the healthcare industry, specifically in the field of health insurance. Health insurance is a complex and highly regulated industry on the verge of disruption. DeFi has the potential to streamline the claims process, reduce costs, and increase transparency in the insurance sector. However, significant challenges must be addressed before DeFi can be widely adopted in healthcare insurance. This study aimed to explore the scope of implementation of DeFi in the health insurance field by conducting interviews among industry experts and administering surveys among traditional healthcare insurance users on their perception of acceptance of DeFi. The expert interviews highlighted transparency, accuracy, cost efficacy, accessibility, efficiency, and customization as major advantages. The drawbacks of DeFi in the health insurance sector included regulatory challenges, integration issues, data privacy and security, and technical expertise. The survey findings using SEM analysis revealed that accessibility and transparency were the significant determinants influencing individuals’ readiness to adapt to DeFi. Key insights on the potential benefits and limitations of DeFi in the healthcare sector and the implications of implementation of DeFi in the healthcare insurance sector are discussed.