Page 22 - The Insurance Times August 2025

1.1 Gaps in Current Health Insurance Regulation 2.3. Health System Integration
Even with IRDAI's efforts, a few persistent gaps are still The quality of health insurance depends on the quality of
worth mentioning: the health system it supports. India has strict rules governing
Weak oversight of TPAs, which serve as middlemen with the relationships between insurers, hospitals, and third-party
significant discretionary powers. administrators (TPAs), but these rules are not always
followed. There are many instances when cashless claims
Inconsistent grievance redress procedures, with the
Ombudsman's capacity frequently overloaded are denied due to disagreements between insurers and
hospitals. This leaves patients with huge bills.
Inadequate data-sharing guidelines between public
health systems and insurers. A specialised health insurance regulator could make provider

Low consumer awareness of health insurance rights; codes of conduct, clear package rates, and criteria for
empanelment. This would help everyone get along better.
Absence of standard treatment protocols for private
hospitals
2.4. Public Health Synergy
For Ayushman Bharat's universal health coverage plan to be
Even if it is not a completely independent regulator, these
effective, private insurance companies and public health
enduring problems support the demand for a more robust,
programs must collaborate. A specialised health insurance
health-focused regulatory framework.
regulator could ensure that private insurers do not duplicate
or undermine public programs, but instead work in
2. Need for a Dedicated Health Insurance
conjunction with them. For example, private insurers could
Regulator cover outpatient services while public programs mainly
2.1. Complexity and Asymmetry cover hospitalisation.
Health insurance is a far more information-asymmetric 2.5. Fraud Prevention
product than other types of insurance. Consumers typically
lack the medical knowledge to evaluate the necessity of In India, health insurance fraud is estimated to cost over $6
billion annually.
treatments, the quality of care, or the cost-benefit analysis.
On the other hand, if there is insufficient regulation,
hospitals and insurance companies can easily collaborate or Inflated bills, needless hospital stays, and hospital-claimant
take advantage of situations. collusion are all examples of it. Advanced data science could
be used by a committed regulator with specialised fraud
detection and medical audit teams to uncover such abuses.
A specialised regulator could develop rules for setting
package prices, ensuring treatments are consistent for 2.6 Opportunities in Digital Health
everyone, and even examining quality-of-care metrics.
The Ayushman Bharat Digital Mission and India's National
Germany's health insurance regulator, for instance,
monitors disease management programs to ensure they Health Stack are establishing a unified health ecosystem
utilise evidence-based care. It is challenging for a general that encompasses electronic medical records, e-consent
insurance regulator to maintain such a high level of frameworks, and a unique health ID.
knowledge.
A specialised regulator could:
Create guidelines for the use of digital health records
2.2. Claim Settlement Disputes
in the processing of claims.
Health claims are one of the most disputed types of
insurance in India. Policyholders often struggle with fine safeguard patient information while permitting the
print exclusions, pre-existing condition clauses, sub-limits, detection of fraud;
and "reasonable and customary charges" that are unclear Organise cybersecurity procedures
and difficult to understand.
Collaborate on standard data exchange with the
National Health Authority
A dedicated regulator could set clearer minimum standards
for coverage, disclosure, and communication, as well as The combination of health IT and insurance necessitates a
make policy wordings that are easier for consumers to
regulator with extensive sectoral and technical knowledge.
understand.
20 August 2025 The Insurance Times