Private Health Insurance in India: Promise & Reality

This study investigates the impact of private insurance on health coverage in India. It suggests the way forward for government policy, effective regulation and enforcement, and private sector activity.

Emphasis on public health and disease prevention in the Indian federal budget is improving. Since 1999, the Insurance Regulatory and Development Agency (IRDA) has licensed 24 new private insurance companies. Demand for health insurance has been growing due to increasing costs of health care and the expanding middle class. Conclusions include:

• Legal and regulatory framework of private health insurance should continually balance competing goals of access, affordability and quality of healthcare;
• Private health insurance should provide health coverage to a larger fraction of the population with varying risk characteristics and ability to pay;
• Regulations promote access to and quality of healthcare and control pricing of health coverage vis-à-vis healthcare providers;
• Allowing the participation of other entities that provide health coverage would increase the reach and depth of private health insurance;
• Private health insurance cannot grow if reasonable consumer expectations relating to access, cost and quality of healthcare remain promises rather than realities.