Affordable Health Insurance For All: Government Mulls Sector Regulator

The Indian government is reportedly considering the establishment of a health sector regulator that will also facilitate affordable health insurance coverage for all citizens.

Preliminary discussions have been held between the ministries of finance and health over the need for a sector watchdog, Economic Times reported citing senior government officials.

The government reportedly believes that in order to accomplish the goal of universal insurance coverage, more focused efforts are required to increase health insurance accessibility and maintain its affordability.

A recent study by the National Insurance Agency revealed that due to insufficient coverage, inadequate penetration, and escalating healthcare costs, over 400 million people - around a third of the population - are without health insurance.

"There are various challenges and opportunities, such as standardisation of treatment costs and settling health claims, that can be addressed by a sectoral regulator in the health insurance segment," one of the officials aware of the developments was quoted in the ET report as saying.

Another official indicated that the Department of Health and Family Welfare, which operates under the Ministry of Health, is likely to convene a meeting with all stakeholders, including insurance companies. The aim of this meeting would be to develop a comprehensive plan and define the responsibilities of a potential health regulator.

The official suggested that a health regulator could potentially expand the reach of the national Health Claims Exchange and be given additional authority to operate as an industry watchdog.

The official, however, clarified that some of these are preliminary suggestions.

In January 2019, the National Health Agency was restructured by the government and became the National Health Authority (NHA). This body was given the responsibility of executing India's flagship public health insurance/assurance scheme, Ayushman Bharat.

The Insurance Regulatory and Development Authority of India (IRDAI) oversees insurance companies offering health coverage, among other products.

At present, the cost of health insurance products is decided by the market, but there is a significant discrepancy across insurance companies in terms of policy stipulations and limits on claims. The introduction of a health regulator could help standardise these aspects and reduce costs.

The National Health Authority (NHA) has established a nationwide Health Claims Exchange (HCX) to facilitate the interoperability of health claims.

The HCX additionally functions as a protocol for sharing claims-related data among multiple parties such as payers, providers, beneficiaries, and regulators.

In October, a meeting was conducted by the Finance Ministry with general insurance companies. The consensus was that insurance companies would partner with the health ministry to expand cashless services and standardise treatment expenses, aiming to enhance the development of health insurance.

The Finance Ministry in a statement noted that insurance companies will collaborate with states under state insurance schemes to expand reach and coverage. They are also considering associating fraudulent activities with the CIBIL score as a measure to prevent or reduce fraud.

The IRDAI has pledged to ensure that by 2047, every citizen will have suitable life, health, and property insurance coverage, thus achieving their goal of Insurance for All.