Vivek Joshi, secretary, Department of Financial Services

“I request you to  initiate a meeting of General Insurance Council along with the senior executive  of leading insurance companies, National Health Authority  (NHA)  and Department of Financial Services  to explore the possible of setting up a Health Regulator so that health insurance can be made more affordable and ubiquitous,’’ said DFS secretary Vivek Joshi in his letter to Sudhansh Pant,secretary, Ministry of Health & Family Welfare

New Delhi:

In a move, that can bring about a transformation in the functioning of overall healthcare sector as well as in the rapidly growing health insurance industry, for the first time,  Vivek Joshi, secretary, Department of Financial Services(DFS) has initiated move to set up a Health Regulator, a crying need of the country.

In this regard, Joshi has addressed an official letter to Sudhansh Pant, secretary, Ministry of Health & Family Welfare, for taking necessary initiatives in collaboration with the Indian insurance industry.  

In the recent discussion with insurance industry, it emerged that in order to achieve insurance for all, insurance penetration need rapid scaling up. In the case of health insurance, there appears to be need for establishing a Health Regulator for achieving this goal, said Joshi in his letter to Pant.

“I request you to  initiate a meeting of General Insurance Council along with the senior executive  of leading insurance companies, National Health Authority  (NHA)  and Department of Financial Services  to explore the possible of setting up a Health Regulator so that health insurance can be made more affordable and ubiquitous,’’ said Joshi.

The ongoing efforts of NHA of building  the National Health  Exchange have been welcomed by the insurance industry. A Health Regulator  would play a vital role in ensuring that this digital transformation aligns with efficiency of the provider’s ecosystem, Joshi explained.

Industry observers point out that though there is an urgent need of a Health Regulator to supervise and regulate the Indian hospitals along with other issues, the Government of  India can’t establish a Health Regulator by itself like Reserve Bank of India, that regulates  for banks or  Sebi, that regulates capital markets, or Irdai, that regulates the insurance industry, or Trai, that regulates the telecom industry, as Health for legislative purposes is a State subject among Central List, State List and Concurrent list as demarcated by the Indian Constitution for making laws.

“It will require moving healthcare to Concurrent List from the State List and would involves some Parliamentary procedures,” said industry experts.

How the issue of setting up of an national Health Regulator will be sorted out from the constitutional point of view , is yet to be known, said the observers.

The Indian insurers which do health insurance business want a Health Regulator to ensure particularly an orderly functioning of hospitals which play a key role in servicing a health insurance policy,

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

With increasing cost of healthcare, earlier, Irdai had said either they should be allowed to regulate hospitals or a separate regulator be instituted.

Irdai had said it is necessary to regulate the hospitals to protect public against continuous increase in health insurance premiums.

Irdai had articulated that as an insurance regulator, it is only regulating the only one portion of  health services sector-only the insurers and TPAs ((third party administrators)- but on the other end  there are hospitals where there is no regulator.

So, Irdai had suggested that either there is a health regulator or  it is allowed to regulate the hospitals to establish a logical ecosystem.

The Indian insurers, prodded by the Irdai, are now preparing themselves to implement comprehensive 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 stake holders 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 standardization of rates, services, and empanelment of more hospitals to cover every nook and corners of the country.

The insurers say this can’t happen without having a Health Regulator .

Post covid health insurance sector is growing at 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.