National health insurance: Pricing, service key to success

G Naga Sridhar | | Updated on: Feb 01, 2018
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The success of the new flagship national health insurance scheme will depend on pricing and service, among others. The scheme will cover 10 crore vulnerable families and provide cover of up to Rs 5 lakh per family for secondary and tertiary hospitalisation. It is likely to benefit 50 crore people.

“In principle, 10 crore families is a big number and the scheme is positive,’’ Bhargav Dasgupta, MD & CEO, ICICI Lombard General Insurance, told BusinessLine on Thursday. The full structure of the scheme should be seen to ascertain the likely impact of the scheme on various stakeholders, he added.

Earlier schemes had an upper limit of Rs 30,000, which could cover tertiary care. Thus, the scope of the new scheme will be much larger and help health insurance penetration positively.


There will be challenges, of course, going by the experience of existing low-cost insurance schemes. Pricing will be key both for customers and industry. If the government prefers to implement it through a tender-driven process, which is the most common practice, some players may resort to aggressive pricing. This could make the the scheme a white elephant going forward.

This happened with low-cost life and general insurance schemes introduced a couple of years back and the insurance regulator has received requests for upward revision of the premium, which is under consideration. It will be helpful if better service parameters such as the claims process and settlement are tagged along with pricing in the tender process for the proposed scheme. The size of the health insurance market last year was Rs 30,000 crore, with an annual growth of about 20 per cent. It remains to be seen how the national health cover scheme will help the needy without bleeding the industry.

Published on February 01, 2018

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