India Mulls Health Insurance Overhaul To Rein In Medical Costs: What Could Change

Health insurance in India could see a fresh round of changes as regulators, insurers and hospitals discuss ways to make treatment costs and policy coverage easier for customers to understand.

Among the proposals being considered are benchmark rates for medical procedures, a common health insurance product, a uniform list of treatments eligible for coverage, and wider use of the National Health Claims Exchange (NHCX).

The discussions come at a time when medical inflation is estimated at around 12-14 per cent a year. A committee comprising regulators, insurance industry representatives, hospitals and the Confederation of Indian Industry is expected to submit its recommendations by the end of the year. The Irdai chief chairs the panel.

Why Treatment Costs Are In Focus

One problem for policyholders is the wide variation in what hospitals charge for similar procedures. These differences can also become a source of disagreement between hospitals and insurers during claims processing.

One proposal is to work out benchmark treatment rates agreed between hospitals and insurers. The idea is to bring greater predictability to medical bills and reduce disputes over how much should be paid for a particular procedure, according to a recent report by NDTV.

That does not necessarily mean every hospital would have to charge the same amount. Costs vary depending on location, infrastructure, technology, staffing and the complexity of care. Any framework would have to recognise genuine cost differences while addressing unusually large variations in charges.

Fraudulent or unwarranted claims are another concern. Industry estimates cited in reports suggest that these may account for around 10-15 per cent of health claims.

A Common Health Policy May Be On The Table

Another proposal is a common health insurance product that insurers could be required to offer alongside their existing plans.

Such a policy could have standard coverage and rates for specified illnesses and procedures. For customers, it may provide a basic reference point while comparing policies, which currently differ on exclusions, waiting periods, room-rent conditions, sub-limits and other clauses.

A uniform list of admissible treatments is also under discussion. This could make it easier for policyholders to know whether a particular treatment is covered, especially when a claim arises during a medical emergency.

Claims Settlement Could Get A Digital Push

The committee is also expected to push for wider adoption of the NHCX, which allows hospitals and insurers to exchange claims and billing information in a common format.

Wider use of the platform could speed up verification and settlement while also bringing more transparency to hospital billing.

The proposals are still being discussed, and their final shape is not known. For policyholders, the direction of the exercise is towards simpler comparison of health covers, clearer treatment costs and fewer disputes at the claims stage.

FAQs

What health insurance changes are being considered in India?Proposals include benchmark treatment rates, a common health policy, uniform coverage rules and wider use of NHCX.

How could benchmark treatment rates help policyholders?

They could make hospital costs more predictable and reduce disputes between hospitals and insurers during claim settlement.

What is the role of NHCX in health insurance claims?

NHCX enables hospitals and insurers to exchange claims data digitally, which could make verification and settlement faster and more transparent.