Indian non-life insurers are exploring a proposed policy requiring health policyholders to pay a 10% co-payment on hospitalisation costs, aiming to reduce unnecessary medical spending and standardise rates amidst rising medical bills.
Non-life insurers in India are weighing a plan that would require health policyholders to pay 10% of admissible hospitalisation costs, according to The Times of India. The proposal, still under discussion, would also cap a patient’s contribution at Rs 5 lakh per claim and could take effect from January 1, 2027. In return, insurers believe annual premiums would fall, although the plan has not been finalised.
If adopted, the co-payment would apply to inpatient claims under retail indemnity policies, retail group covers and certain combination products, including hospital stays linked to accidents. It would cover both cashless treatment and reimbursement claims, but outpatient care would remain outside the plan. The Times of India said the contribution could not be removed through riders or endorsements, and could not be offset through another health policy.
The wider push reflects insurers’ concern about rising medical bills and what they see as unnecessary spending when patients are broadly insured. According to the report, industry executives and a council note argue that hospitals may be more likely to order extra tests, suggest procedures or extend stays when patients are less sensitive to price. Higher room tariffs can also lift doctor’s fees and procedure charges, which in turn pushes up the total bill.
Alongside the co-payment idea, the General Insurance Council is also considering common hospital empanelment, benchmark tariffs and a formal forum for disputes between insurers and hospitals. The Times of India reported that the plan would cover more than 4,300 hospitals and could help standardise rates and limit arbitrary billing. But the proposal has already drawn criticism from some industry voices, who argue that customers who pay higher premiums should be able to buy full indemnity cover rather than be forced into sharing costs.
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