MUMBAI, Aug 12 - India is weighing wide-ranging reforms of health insurance, from benchmarked treatment rates to a nationwide claims exchange, as it looks to boost transparency in a struggle to hold down some of the highest medical inflation in Asia, said two sources.
Directly familiar with the matter and speaking anonymously as the discussions are private, they added that medical inflation of roughly 12 per cent to 14 per cent a year, according to industry estimates, puts pressure on families and prompts authorities to hunt ways to standardise pricing and coverage.
Reform recommendations are expected by year-end from a panel comprising regulators, industry leaders, hospitals, and the Confederation of Indian Industry (CII), with implementation to follow.
"The idea is to benchmark treatment rates, agreed between insurers and hospitals, to reduce disputes and fraudulent claims," said one of the sources.
Another source said that industry estimates suggest 10 per cent to 15 per cent of health claims are unwarranted or fraudulent.
Both noted that the chief of the Insurance Regulatory and Development Authority of India (IRDAI) chairs the panel.
The regulator IRDAI did not respond to requests for comment. A CII spokesman declined to comment.
India looks to spur health insurance
India wants more of its 1.4 billion population to invest in health insurance, with such spending at less than four per cent of the gross domestic product, compared with a global average of more than seven per cent.
It has lifted curbs on foreign investment and reformed the distribution of its US$130-billion (RM531.3 billion) insurance industry to do so.
More than 40 insurers, including joint ventures of global groups such as Lombard, ERGO, and AIG, operate in India's health insurance market, generating about ₹1.17 trillion (RM50.13 billion) in premiums in the fiscal year ended March 2025.
Just this week, lawmakers urged government action to make private healthcare more affordable, as rising consumer costs prompt authorities to focus on health insurance.
One of the sources said that standardised tariffs and billing transparency are seen as the biggest levers to slow the rampant growth of costs over time.
Both said that the reforms envisage a common health insurance product that all insurers will be required to offer alongside existing plans, aiming to standardise coverage and rates for a range of illnesses and procedures.
Uniform list of admissible treatments
It could also include a uniform list of admissible treatments, making coverage provisions easier for policyholders to understand.
The widely varied rates and coverage now on offer from providers prompt consumers to switch policies more often in search of the best deal.
The sources said that the committee will also push for wider adoption of the National Health Claims Exchange, a platform developed by India's Health Ministry and the insurance regulator.
It would offer hospitals and insurers a common format for sharing claims and billing data, enabling faster settlement by accelerating verification and making prices more transparent.
"By functioning as a bridge...the common exchange can significantly speed up time to settle claims at the time of discharge," said online insurance marketplace Policybazaar's chief business officer Amit Chhabra.
