According to sources familiar with the matter, the next government is considering the establishment of a new Health Insurance Regulator for health insurance as one of its initial proposals. The Union finance ministry has initiated discussions with the health ministry to kickstart consultations involving insurance companies, healthcare service providers, the National Health Authority, and other stakeholders. The objective is to formalize the plan for the new regulator, aimed at promoting consistency in health services and ensuring affordable health insurance coverage for all citizens.
One of the sources, speaking on condition of anonymity, emphasized the urgency of addressing various issues within the sector, suggesting that a dedicated Health Insurance Regulator would be best suited to handle them. The government is keen on finalizing the blueprint and seeking approval from the incoming government. Currently, the Insurance Regulatory and Development Authority of India (IRDAI) oversees the entire life and non-life insurance sector. However, the government believes that a sector-specific regulator is necessary to drive efforts towards increasing insurance penetration and providing accessible health cover by 2047. The proposed Health Insurance Regulator would also tackle challenges such as standardizing treatment costs and expediting claims settlement.
Queries directed to the finance and health ministries have not been responded to. C.R. Vijayan, former secretary-general of the General Insurance Council, highlighted the lack of regulation concerning healthcare service providers, leading to inconsistencies in treatment costs and higher insurance premiums. Establishing a sectoral watchdog, according to Vijayan, would address issues like healthcare inflation and enhance the availability of affordable and efficient products for consumers.
The consultation process will also involve states since health falls under their jurisdiction, necessitating their cooperation in creating the new Health Insurance Regulator. Despite rising healthcare costs, a significant portion of India’s population remains uninsured, with existing health policies characterized by high premiums. Official estimates indicate low insurance penetration in India, lagging behind global figures. However, the Indian non-life insurance market is projected to grow by 13-15% over the medium term, with the health insurance segment surpassing the ₹1 trillion mark. Additionally, motor insurance premiums are expected to witness double-digit growth in the coming years after crossing ₹85,000 crore in FY24.