OPD Health Insurance: Data Shows 5-10% Fewer Hospitalisations Among OPD-covered Policyholders

Health insurance in India is undergoing a shift that goes beyond the old hospitalisation-centric model. A new analysis by Policybazaar shows that health policies with outpatient department (OPD) cover are not only being adopted faster but are also driving better health outcomes.

One striking finding: policyholders with OPD benefits in health insurance are seeing 5 to 10 per cent fewer hospitalisations compared to those with traditional plans.

The data points to a decisive change in how Indians engage with their health cover. Over the past three years, OPD adoption has grown 4.5 times. What was once considered a niche add-on, chosen by only 5 per cent of buyers in financial year 2023 (FY23), now can be seen in nearly one in five health insurance policies (22 per cent in FY26).

The reason is clear: OPD benefits make insurance useful for everyday medical needs, not just rare emergencies.

What OPD covers are included in health plans?

Coverages like doctor consultations, diagnostic tests, and pharmacy bills (which are typically not included in hopsitalisation only plans) are now covered.

Experts note that the proactive use of such healthcare facilities reduced the chances of illness that later escalate to the point of hospitalisation.

More People Are Opting For OPD and How

Data notes that just three years ago, only 5 per cent of health insurance buyers opted for OPD. Today, that figure has jumped to 22 per cent, which means nearly one in five policies sold now includes it. Between FY24 and FY25, the uptake had nearly doubled reaching 20 per cent .

The steep rise in adoption happened between FY23 and FY25, when awareness grew and people began recognising everyday medical expenses as a big drain on their pockets. Growth has steadied since, but the fact that OPD is no longer a niche add-on shows how mainstream it has become.

Who is buying driving the coverage uptake?

The report shows that urban professionals (particularly those in their 30s and 40s) are driving the demand for OPD covers.

This age group is typically in the midst of balancing their family healthcare costs, many of whom also choose to undergo preventive check-ups. Young professionals (those between 18-30 years) are early adopters, and take up around 27 per cent of the uptakes. They are driven by awareness of everyday medical expenses and comfort with app-based claims.

The elderly (60 years+) mark up 15 per cent of the adoption. A smaller share but growing steadily with more seniors now opting for OPD plans as they recognize the financial benefits of covering frequent medical needs, the report notes.

The shift is seeing wider adoption in bigger cities wherein half the policies with OPD cover are sold in metros. This is basically due to higher awareness and a dense network of healthcare services. Cities like Mumbai, Hyderabad, and Chennai are the top hotspots per data.

Ties-2 cities are catching up while smaller towns are still only warming up to the idea of OPD covers.

Convenience is another reason OPD has taken off. About 90 per cent of OPD claims are processed cashless. Walking into a clinic or pharmacy and swiping an e-card works almost like a health wallet, removing the paperwork barrier that discouraged many earlier.

Add to this the rise of tele-consultations, now almost on par with physical visits, and OPD is beginning to look less like an add-on and more like a core part of health insurance.

Siddharth Singhal, Head of Health Insurance at Policybazaar, says the change is as much about perception as it is about coverage. “Over the last three years, OPD has transformed the way customers perceive health insurance. Instead of waiting for hospitalisation to ‘use’ their cover, people are now engaging multiple times a year for doctor visits, medicines, or diagnostics. This makes health insurance tangible, relevant, and rewarding in daily life. For insurers, it also nudges customers toward preventive care, which reduces long-term hospitalisation costs. The shift is a win–win for both customers and the ecosystem,” he explains.

The idea that health insurance should feel useful on a day-to-day basis is relatively new in India. But as the numbers show, OPD cover is pushing the industry in that direction, changing not just how people claim, but also how they think about their health.