How did The General Insurance Council (GIC) of India solved one of the biggest Health Insurance’s problems

I have complained about the limited number of healthcare facilities for Cashless treatment and advocated why the number of empanelled facilities must go higher to improve the insurance penetration. I missed the important lever - the regulator. And the new rule is again a testament to India’s Healthcare’s future. This doc highlights the impact of this new regulation: “Cashless Everywhere”

There are two types of making use of the Health Insurance in the case of Hospitalization (IPD)

  • Cashless (take treatment and go home if there is no Copay and the treatment cost is in the treatment limit)
  • Reimbursement (pay the treatment expenses, fill out the form, wait for the approval, and money might get transferred into the bank account)

There were only 15,000 hospitals for cashless insurance hence the experience was super bad. And I was thinking bringing more facilities under the cashless insurance will take time, and it will be done by the private player. However, I was wrong. I missed the one strong lever - Regulator.

On the 24th, The General Insurance Council (GIC): GIC | Home Page along with the consultation with the Insurance companies released this new rule: “ Cashless Everywhere”. Under this rule, every hospital with number of beds 15 or higher comes under Cashless treatment. And just like that, every health facility with beds 15 and higher can offer cashless treatment.

Kudos to the Regulators: I think the number of players to control and bring on the same page was lower (In India, there are just 25 companies those who offer Health Insurance hence super easy to convince or bring on the same page). And the same is a bit difficult for Healthcare facilities and Healthcare providers (Doctors) because the number of players is more. Hence regulators have to back after releasing the rule that doctors should write generic drugs on the prescription.

This impact of this in future: This amplifies the incentive for consumers to purchase Health Insurance. The sales pitch to purchase Health Insurance is now 10X - an effective and simpler sales pitch for individuals to open their wallets.