New Delhi: India is considering wide-ranging reforms to its health insurance sector, including benchmark treatment rates and a nationwide claims exchange, as authorities seek to improve transparency and control rising healthcare costs, according to two sources familiar with the discussions.
Medical inflation in India is estimated at around 12 percent to 14 percent a year, putting increasing pressure on households and prompting policymakers to explore ways to standardise healthcare pricing and insurance coverage.
A panel comprising regulators, industry leaders, hospitals and the Confederation of Indian Industry is expected to submit recommendations by the end of the year, with implementation of the proposed measures expected to follow later. The panel is chaired by the head of the Insurance Regulatory and Development Authority of India (IRDAI).
One key proposal is to establish benchmark treatment rates agreed between insurers and hospitals. The system could help reduce disputes over medical bills and limit fraudulent or unwarranted insurance claims. Industry estimates suggest around 10 percent to 15 percent of health insurance claims may be unwarranted or fraudulent.
The reforms also aim to encourage more people to purchase health insurance. Health insurance spending in India currently accounts for less than 4 percent of GDP, compared with a global average of more than 7 percent. More than 40 insurers operate in India’s health insurance market, which generated premiums of around 1.17 trillion rupees ($12.3 billion) in the financial year ended March 2025.
The proposed overhaul could require every health insurer to offer a common health insurance product alongside existing plans. It could standardise coverage and rates for a range of illnesses and procedures, while a uniform list of admissible treatments could make insurance policies easier for consumers to understand and compare.
Another major proposal is wider adoption of the National Health Claims Exchange, developed by India’s health ministry and insurance regulator. The platform would allow hospitals and insurers to share claims and billing information in a common format, potentially speeding up verification, improving price transparency and reducing settlement times.
The reforms come as rising healthcare costs increase pressure on policymakers to make private healthcare more affordable. If adopted, standardised tariffs, clearer coverage rules and faster claims processing could reshape India’s health insurance market while helping households manage growing medical expenses.
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