Assessing Private Health Insurance in India: Impact and Regulatory Issues

• What is the likely impact of the entry of private health insurance companies in India, on the costs of health care, equity in the financing of care, and the quality and cost-effectiveness of such care?

• In light of the above, what are the main regulatory gaps in the health sector that need addressing? The entry of private health insurance firms could have adverse implications for some of above goals of health policy, particularly for equity. However, an informed consumer and well-defined and implemented insurance regulation regime will ameliorate some of the bad outcomes. Regulation relating to benefit-packages, restrictions on risk selection and consumer protection would be clearly useful. Also required are improved enforcement of regulatory regimes, creating large insurance buyer groups, and better coordination between IRDA and other regulatory bodies. New legislation in improving standards in health care provision may also be needed.