This paper estimates the health damages due to arsenicosis among people residing in two districts of Bihar, India. A primary survey of 388 households' comprises 3469 individuals from two arsenic-contaminated districts namely Patna and Bhojpur from Bihar was conducted to collect the data. Arsenic field test kits was used to test the arsenic level in drinking water of the sample households. The water test results indicate that 18.3% of the sample contained 50 ppb of arsenic, and 5.12% of the sample contained the arsenic between 300 and 500 ppb. Water source, doctor visits, work loss, and arsenic concentration levels are significant and positively related to arsenicosis, and awareness is significant but negatively related to arsenicosis. The incidence rate of arsenicosis was found to be more among females than males and children. Per-capita income, sanitation, awareness, and depth of water sources are significant and positively related to defensive activities, i.e., water purification. The annual wage loss, cost of treatment, and cost of illness for sample households are estimated as INR 2437.92 ($45.83), INR 5942.40 ($111.72) and INR 8380.32 ($157.55), respectively. The annual cost of illness for the society is estimated as INR 265.97 million ($5 million). Finally, the paper suggests policy implications of providing safe drinking water in the arsenic-affected areas in the State of Bihar, India, which can help reduce arsenicosis in sustainable manner, improve well-being and potential productivity.