IRDAI's Initiatives in Health Insurance
The Insurance Regulatory and Development Authority of India (IRDAI) is set to launch the Bima Sugam digital marketplace in December, amid ongoing issues in health-insurance claim settlements.
Current Challenges in Health Insurance
- Although the number of claims settled is high, the proportion of the amount settled to the amount claimed is below expectations.
- In 2024-25, ₹94,247 crore was settled across 32.6 million health-insurance claims.
- Key issues include:
- Lack of transparency
- Inadequate claim settlements
- Unclear insurance communication
Insurance Penetration and Financial Burden
- India’s insurance penetration is low at 3.7% of GDP, about half the global average.
- Out-of-pocket expenditure accounted for 39.4% of health expenditure in 2021-22.
- High personal spending indicates partial claim approvals and rejections.
Proposed Solutions and Digital Interventions
- Removing GST on individual life and health policies could make premiums more affordable.
- Challenges remain in claim processing, including:
- Confusion over coverage conditions
- Inconsistent hospital billing
- Lengthy documentation requirements
- Digital solutions include:
- The National Health Claims Exchange (NHCX) for digitizing claim exchanges.
- The ABHA ID for consolidating medical records into a digital format.
- The "Cashless Everywhere" initiative for cashless treatment in non-network hospitals.
Limitations and Future Directions
- NHCX adoption varies across states and hospitals, limiting its overall effect.
- The Bima Sugam platform aims to:
- Facilitate real-time data sharing
- Standardize billing
- Improve traceability
- Strengthening consumer protections is crucial through:
- Public claim dashboards
- Third-party audits
- Multilingual grievance mechanisms
- Targeted awareness initiatives
Overall, a transparent and reliable claims infrastructure is essential for the credibility of India’s health insurance system, especially in the face of rising medical costs.
