The Insurance Regulatory and Development Authority of India (IRDAI), is planning to introduce simple, low-cost health insurance policies and performance scorecards for insurers and hospitals, reported The Economic Times.
The move aims to , while addressing long-standing issues such as claim delays, billing disputes, and low insurance penetration.
The sector has also been under pressure to remain profitable after settling claims worth around Rs 85,000 crore in the last financial year, industry executives told ET.
IRDAI is planning to roll out basic, to make policies more affordable and easier to understand.
These simple plans are expected to help more people access health insurance, especially those who find existing policies complex or expensive.
The move is also aimed at improving insurance penetration in India, which remains among the lowest globally.
Industry body CII is working with IRDAI to design these products, according to the report.
Along with basic plans, the regulator is also planning to introduce performance scorecards for both insurers and hospitals.
These scorecards are expected to be rolled out from June 2026.
They will track key factors such as claim settlement speed, billing practices, and documentation standards.
The aim is to help policyholders make better choices by giving them clear information about how insurers and hospitals perform.
The scorecards are also expected to improve behaviour in the sector by increasing transparency.
IRDAI is also working on a policyholder-first framework that links hospital payments to performance.
Hospitals that settle claims faster and follow timelines may receive better rates.
On the other hand, delays, billing issues, and gaps in documentation could lead to lower payments.
This step is expected to bring more discipline in hospital billing and claims handling.
The regulator is also pushing for a shift towards preventive healthcare and wellness-based engagement.
This marks a move away from the current model, which mainly focuses on hospitalisation.
The new approach aims to encourage better health management and reduce the need for hospital treatment over time.
To address frequent disputes between insurers and hospitals, IRDAI plans to introduce formal contracts with clear rules.
These will cover billing practices, claims processing, and dispute resolution.
The regulator also wants to ensure that cashless treatment is not withdrawn suddenly due to commercial disagreements.
Ad hoc suspensions of hospital networks are expected to be discouraged under the new system.
The report said the sector is facing ongoing criticism from patients and is also dealing with financial pressure.
IRDAI has earlier described the industry as being in an “unstable equilibrium”.
The proposed changes are expected to bring more stability and predictability to the sector, while improving the overall experience for policyholders.
By focusing on simpler products, better transparency, and stricter rules, the regulator aims to make health insurance more reliable and easier to access.