Introduction: Even though India has made significant economic advances, Odisha especially the KBK region—still suffers from high illness rates and weak health outcomes, driven by pervasive poverty, insufficient healthcare infrastructure, and social disadvantages. This study seeks to examine the prevalence and key determinants of morbidity in Odisha, with special emphasis on the KBK region, using data from a large-scale national survey. Methods: This study used data from the 75th round of the National Sample Survey (NSS) on Household Social Consumption: Health, which included 19,083 individuals from Odisha, with 4,183 belonging to the KBK region. Participants provided self-reported information on morbidities based on a 15-day recall period, classified into infectious diseases, non-communicable diseases (NCDs), disability, and other conditions. All prevalence rates are expressed per 1,000 populations. To identify socio-economic and demographic factors affecting monthly household health expenditure, multiple linear regression analysis was employed. Results: Morbidity prevalence in Odisha exceeded the national average, with the KBK region bearing a heavier burden of infectious diseases, while non-communicable diseases (NCDs) were more prevalent in other parts of the state. Among those reporting morbidity, females, urban residents, and lower-income households constituted a larger share. The regression analysis revealed that household size, income level, education, caste (specifically OBC), and the age of the household head had a significant impact on monthly health expenditure. In contrast, gender, religion, and marital status did not show a statistically significant effect. Hospitalization costs were highest for NCDs, followed by disability and then infectious diseases. Conclusion: The elevated morbidity rates, particularly the persistence of infectious diseases in the KBK region despite epidemiological transitions seen in other areas, highlight enduring health inequities rooted in socio-economic vulnerabilities. Targeted efforts to enhance healthcare access, strengthen disease prevention, and promote social upliftment are essential to narrowing health disparities and improving health outcomes for Odisha’s underserved populations.