India is considering a series of health insurance reforms aimed at curbing rising healthcare costs, improving pricing transparency and streamlining claims, according to sources familiar with the discussions.
The proposed measures include benchmarking treatment rates agreed between insurers and hospitals, introducing standardised coverage for common illnesses and procedures, and expanding the use of a nationwide health claims exchange.
Medical inflation in India is estimated at about 12%-14% annually, putting pressure on households and insurers and prompting policymakers to explore ways to standardise healthcare pricing and coverage.
A panel led by the Insurance Regulatory and Development Authority of India (IRDAI), with participation from industry representatives, hospitals and the Confederation of Indian Industry, is expected to make recommendations by the end of the year. Implementation would follow subsequently, according to the sources, who spoke on condition of anonymity because the discussions are not public.
One proposal under consideration is a common health insurance product that all insurers would be required to offer alongside their existing products. The product would provide standardised coverage and rates for a range of illnesses and medical procedures.
The reforms could also introduce a uniform list of admissible treatments, making coverage provisions easier for policyholders to understand and potentially reducing disputes over claims.
The proposed measures come as India seeks to expand insurance coverage. Health insurance spending currently accounts for less than 4% of GDP, compared with more than 7% globally, while more than 40 insurers operate in the country’s health insurance market.
Fraud and unwarranted claims are another area of concern. Industry estimates cited by the sources suggest that 10%-15% of health insurance claims could be fraudulent or otherwise unwarranted.
The government is also looking to increase adoption of the National Health Claims Exchange, which would provide a common platform for hospitals and insurers to exchange claims and billing data. Greater use of the platform could help standardise information, speed up claims verification and improve transparency around healthcare costs.
The reforms come as rising private healthcare costs increasingly affect insurance affordability. A recent parliamentary committee report found that private hospital stays in India cost around $530 on average, compared with about $70 at public facilities.
Standardised tariffs and greater billing transparency are therefore expected to be key areas of focus as policymakers seek to contain healthcare cost growth while expanding health insurance coverage.