Indian insurers propose 10% co-payment on health claims from 2027

Indian non-life insurers are considering a mandatory 10% co-payment on retail health policies starting January 1, 2027, capped at Rs 5 lakh per claim, in exchange for lower premiums. The proposal, under review by the General Insurance Council, would apply to inpatient hospitalisation costs, including accidents, but exclude outpatient claims. The co-payment cannot be waived or recovered from other policies, and would require even comprehensive policyholders to keep funds for emergencies. The measure aims to curb overbilling and provider-induced demand, where hospitals inflate costs for fully insured patients, though experts warn it may be anti-competitive and unfair to high-premium customers. The plan also includes common hospital empanelment across 4,300 hospitals, outcome-based contracts, and a grievance forum to settle insurer-hospital disputes. Critics argue the mandatory nature could discourage high-value policies and attract Competition Commission scrutiny.