IRDAI: Health sector, insurance require parallel investments

Insurers need to work together with hospitals, and investors in health insurance should also put money in healthcare when value-added services are allowed, IRDAI has said. This was needed to address the ‘chicken and egg’ problem of lack of adequate health insurance and healthcare in smaller cities as each depended on the other.

Speaking at a health insurance summit organised by the CII in New Delhi, IRDAI chairman Debasish Panda said that if the healthcare infra comes up, insurance companies can start selling, so that there is a revenue stream for hospitals and their concerns can be addressed.

Panda said that during his term as finance secretary, the government had come out with a Rs 50,000-crore line of credit for healthcare in the country for new as well as upgrading existing hospitals. “It was available at an interest of 7.5% as there was a guarantee from the government for 75% of brownfield and 50% for greenfield. “Unfortunately, the uptake was very small and I think it was only Rs 7,000 crore,” said Panda.

Panda said that as against the 19% compounded annual growth rate in health insurance in the last five years, the sector has the potential to grow at 30-35% with three As – awareness, accessibility and affordability.

“The pandemic taught us that health insurance is a risk-mitigation tool. During Covid, health insurance played a very important role by catering to 27 lakh with claims worth Rs 24,000 crore. Insurance Act of 1938 was amended in 2015, and health insurance is recognised as a separate entity. To date, we have six standalone health insurance companies, and to facilitate seamless reimbursements, there are 19 third-party administrations. However, having said that, it is not enough for the size and diversity of the population,” he said.

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