Business · India Bureau
Non-life insurers' co-pay proposal faces regulatory hurdles with Irdai
The insurance industry's plan to introduce a 10 per cent co-payment structure for retail health insurance claims is unlikely to secure approval from the Insurance Regulatory and Development Authority of India. Industry insiders cite regulatory concerns as the primary obstacle to implementation.
LSN India ·
Non-life insurers have mooted a proposal to introduce a 10 per cent co-payment requirement on inpatient hospitalisation costs under retail health insurance policies. The co-payment structure would require policyholders to bear a portion of treatment expenses directly, with insurers covering the remainder. However, industry executives familiar with the matter have indicated that the regulator is unlikely to greenlight the proposal in its current form.
The proposal comes as insurers grapple with rising claims ratios and medical inflation in the health insurance segment. Co-payment mechanisms are employed by insurers globally to manage moral hazard and reduce unnecessary medical interventions. Industry representatives have been engaging with stakeholders to discuss potential modifications to the proposal that might address regulatory concerns.
The Insurance Regulatory and Development Authority of India has maintained stringent consumer protection standards in the health insurance space. The regulator's stance on co-payments reflects broader concerns about ensuring affordability and accessibility of health coverage for Indian consumers. Any changes to policy structures typically require detailed actuarial justification and public consultation.
The outcome of this proposal will likely influence broader industry discussions around premium sustainability and claims management in the retail health insurance segment. Insurers are expected to continue dialogue with the regulator to explore alternative risk-sharing mechanisms that balance policyholder protection with industry viability.