The Indian government is considering the establishment of a health sector regulator responsible for guiding both private and government health insurance schemes under its umbrella. The primary objective of this proposal is to offer affordable insurance coverage to all citizens.
The Need for a Health Sector Regulator
According to the IRDAI Vision 2047, the Indian government aims to provide ‘Insurance for All by 2047’, ensuring every citizen and enterprise has apt life, health, and property insurance coverage. However, over a third of the population, translating into more than 400 million individuals, still lack Health Insurance due to lower penetration, inadequate coverage and escalating healthcare costs.
Role of the Regulator
The implementation of a unified regulator assures standardised oversight and streamlines the regulations, policies, and procedures of the entire health insurance sector. The regulator can supervise premiums, claim settlements, and coverage criteria, thereby eradicating malpractices and ensuring transparency in operations for both private and government insurance providers.
Accessibility and Affordability
A regulator can enhance the accessibility and affordability of healthcare. As the penetration of private insurance is growing rapidly, India aims to cover 70% of the population soon with the aid of government-run insurance. By monitoring insurance schemes, the regulator can maintain the affordability, prevent undue premium hikes and control costs, thus making insurance more sustainable in the long run.
Quality Control
The regulatory body has the ability to establish and enforce standards for healthcare services covered by insurance. This action would ensure that enlisted hospitals meet certain quality standards, promoting better care for insured individuals.
Understanding Health Insurance and Its Importance
Health insurance is a type of coverage that caters for medical expenses incurred by the insured party. Its role is to pool the high Out of Pocket expenditure (OOPE) in India, offering greater financial protection against health disasters. Health insurance introduces a pre-payment system, which acts as an essential tool for risk-pooling and safeguarding against catastrophic expenditures from health shocks.
Challenges Surrounding Health Insurance
Despite significant progress in life expectancy since the country’s independence, there has been an uneven distribution of quality life across different parts of India. Low government expenditure on health has limited the capacity and quality of public healthcare services, forcing approximately two-thirds of individuals to seek treatment in the more expensive private sector. Moreover, about 30% of the population, equivalent to 40 crore individuals, lack any form of financial protection for their health.
Government Schemes Related to Health Insurance
Government schemes like Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) offer a sum insured of Rs. 5 lakh per family for secondary as well as tertiary care. In addition, the National Health Agency (NHA) was reconstituted as the National Health Authority in 2019, with the responsibility of executing Ayushman Bharat. The NHA has also developed a national Health Claims Exchange (HCX) to enable the interoperability of health claims. It’s noteworthy that Insurance Regulatory and Development Authority of India (IRDAI) oversees insurers that provide health cover among other products.