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Insurance for all: Finance Ministry pushes for health regulator

In recent discussions between the Department of Financial Services and insurance players, it was brought up that insurance penetration needs rapid scaling up to achieve “insurance for all”.

The Finance Ministry has called for discussions to set up a healthcare sector regulator to organise, standardise and regulate hospitals under the insurance programme, The Indian Express has learnt.

In recent discussions between the Department of Financial Services and insurance players, it was brought up that insurance penetration needs rapid scaling up to achieve “insurance for all”.

“In the case of health insurance, there appears to be a need for establishing a Health Regulator for achieving this goal,” said DFS Secretary Vivek Joshi in a letter to the Department of Health and Family Welfare, it is learnt.

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“The ongoing efforts of the National Health Authority of building the National Health Exchange (NHA) have been welcomed by the insurance industry. A Health Regulator would play a vital role in ensuring that this digital transformation aligns with the efficiency of the providers’ ecosystem,” Joshi is learnt to have said in the letter to Sudhansh Pant, Secretary (H&FW), Department of Health and Family Welfare.

“I request you to initiate a meeting of the General Insurance Council — the apex body of all general insurance companies — along with the senior executives of leading insurance companies, National Health Authority and Department of Financial Services to explore the possibility of setting up a Health Regulator so that health insurance can be made more affordable and ubiquitous,” Joshi is learnt to have written.

Festive offer

Earlier, a joint working group of the Insurance Regulatory and Development Authority (IRDAI) and National Health Authority proposed a common hospital registry, empanelment process, grading of hospitals and package cost harmonisation to promote the standardisation and effective utilisation of health infrastructure under the insurance programme.

Insurance companies and hospitals follow different yardsticks for health insurance and there’s no uniformity in the cost structure. Over 40 crore people still don’t have health insurance coverage.

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According to industry observers, though there is an urgent need for a health regulator to supervise and regulate Indian hospitals along with other issues, the government can’t by itself establish one like the Reserve Bank of India, SEBI or IRDAI. Health, for legislative purposes, is a State subject.

“It will require moving healthcare to Concurrent List from the State List and would involve some Parliamentary procedures,” an industry expert said. Indian insurers in the health insurance business want a health regulator to ensure an orderly functioning of hospitals which play a key role in servicing a health policy.

There is a constant tussle between hospitals and insurers on many issues particularly on arbitrary charges, which inflate claims and push up premiums.

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IRDAI had earlier said either they should be allowed to regulate hospitals or a separate regulator should be instituted. It is necessary to regulate hospitals to protect the public against continuous increase in health insurance premiums, officials said.

IRDAI had said that as an insurance regulator, it is only regulating only one portion of the health services sector — only the insurers and TPAs (third party administrators) — but on the other end, there are hospitals that are not regulated.

Meanwhile, insurers, prodded by IRDAI, are preparing to implement changes paving the way for a 100 per cent cashless payment arrangement in the health insurance segment which needs a robust technological platform and a deeper coordination with all the stakeholders of the nationwide healthcare sector involving hospitals, doctors and pharmacists.

The new system of cashless payment, apart from needing a technological platform, also needs a lot of standardisation of rates, services and empanelment of more hospitals to cover every nook and corner of the country. Insurers say this can’t happen without a health regulator.

After the pandemic, the health insurance sector is growing at a much faster clip and has emerged as the largest portfolio in the industry. Health portfolio of the industry grew 23 per cent to Rs 90,667 crore, contributing almost 35 per cent (33 per cent in FY 22) of the industry’s premium kitty in FY 23.

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Currently, healthcare schemes and private insurance have individual hospital empanelment processes, which replicate various activities and contribute to inefficiency and duplication of processes, said the Report of Network Hospital Management prepared by the joint working group of IRDAI and NHA.

The IRDAI-NHA group recommended that the private insurance industry should also adopt the uniform cost of packages. However, the IRDAI can come up with the guidelines on inclusion of additional/ variable cost for implants and category of wards. Private insurance can design the products as per the uniform package cost and the additional cost of implant and ward type.

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The group also recommended that a standard grading system for hospitals based on the quality parameters should be prepared and same grading can be used by PM-JAY (Pradhan Mantri Jan Arogya Yojana) and private insurance market. The committee also recommended a single unique hospital registration process and repository, ideally ROHINI (Registry of hospitals in network of insurance), instead of having several lists. “This list will be beneficial as the central health facility repository/registration number can be used by various schemes and insurance service providers for identification of the health facilities in geographical areas,” it said.

IRDAI is pushing to implement two high tech projects – Health Claims Exchange and Bima Sugam – to deepen insurance penetration and simplify the claim procedures.

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The insurance regulator now wants general insurers to be part of the Health Exchange platform, which is being set up by the National Health Authority. The platform will digitise and simplify the process of filing health insurance claims. The proposed process is not only quick and hassle-free but also reduces the cost per claim to the insurer. The policyholders and hospitals can track the claim status online and it also enables automatic fund transfer of the claim amount.

Furthermore, the policyholder will be able to provide complete medical data to the hospital, track the claim status anytime and experience a faster and hassle-free claim process. The move will be beneficial for all the parties — insurers, hospitals and policyholders.

Bima Sugam is considered a revolutionary step with ambitions of becoming the largest online market for insurance products and services which has not been practised anywhere in the world. All insurance requirements, including those for life, health and general insurance (including motor and travel) will be met by Bima Sugam.

There is also a proposal before the government and the regulator for composite insurance licences which will enable an insurer to offer both life and non-life products. India, which is the 10th largest insurance market in the world, is poised to be 6th largest insurance market in the world by 2032.

First published on: 22-12-2023 at 04:15 IST
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