India is exploring comprehensive reforms in health insurance, including standardised treatment pricing and enhanced claim transparency, amid soaring medical costs and a push to expand coverage.
India is moving towards a sweeping overhaul of health insurance as medical inflation continues to outpace household budgets and strain the claims system. Industry estimates put annual medical inflation at 12% to 14%, while private hospital charges and complex treatments have pushed premium costs and claim values higher, according to reporting by Business Today, LiveMint and independent industry analyses.
At the centre of the discussion is a proposal to benchmark treatment prices between insurers and hospitals. The aim is to create more standardised tariffs, reduce billing disputes and curb questionable claims, which industry estimates suggest may account for 10% to 15% of health insurance claims. A broader goal is to make policies easier to compare and claims easier to process in a market where customers often switch plans in search of better coverage and pricing.
A committee involving regulators, insurers, hospital representatives and the Confederation of Indian Industry is working on the proposals, with the Insurance Regulatory and Development Authority of India chairman said to be leading the panel. According to Business Today, recommendations are expected by the end of the year and could be adopted later. The regulator declined to comment, while the CII also refused to speak on the record.
The push for reform comes as India tries to widen insurance coverage in a country of 1.4 billion people, where overall insurance spending is still below 4% of GDP compared with a global average above 7%. The health insurance market had more than 40 insurers in the financial year ended March 2025, including global joint ventures such as those linked to Lombard, Ergo and AIG, and premiums reached about 1.17 trillion rupees, or $12.3 billion.
Other changes under discussion include a common health insurance product that all insurers may have to offer alongside existing plans, as well as a uniform list of treatments to make coverage clearer for policyholders. The committee is also expected to push wider use of the National Health Claims Exchange, a platform built by the health ministry and the regulator to let hospitals and insurers share claims and billing data in a common format. That could speed verification, improve price transparency and shorten settlement times at discharge, a process Policybazaar’s chief business officer Amit Chhabra said could act as a bridge between hospitals and insurers.
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