Newz Desk, Durgapur: Buying a high-value health insurance policy may no longer guarantee complete financial protection against hospital expenses, as a proposal to introduce mandatory co-payment for health insurance policyholders is under consideration.
The General Insurance Council (GIC) is reportedly examining a proposal under which policyholders would have to bear a specified portion of their medical bills, even when their treatment is covered by an insurance policy. The Centre is said to be considering fixing the mandatory contribution at 10% of the total bill, although the proposal and its final terms would need official confirmation.
Under the proposed arrangement, if a patient’s hospital bill amounts to ₹5 lakh, the family would have to pay ₹50,000 from its own pocket, while the remaining eligible expenses would be covered by the insurer, subject to the policy’s terms and conditions.
Discussions are also reportedly underway within the insurance industry on whether a ceiling should be imposed on the amount policyholders would have to pay under the proposed system. One possibility being discussed is a maximum co-payment of ₹5 lakh per claim.
The proposal comes at a time when the withdrawal of Goods and Services Tax (GST) on health insurance premiums has made policies more affordable, encouraging more people to consider health insurance as a financial safeguard against rising medical expenses. However, the introduction of mandatory co-payment could increase the financial burden on families at the time of treatment. Co-payment is a cost-sharing mechanism under which the insurer pays the admissible portion of a medical claim, while the policyholder bears a specified percentage of the expenses. The arrangement can reduce the insurer’s liability, but it also means that patients must arrange funds for a portion of their treatment costs despite having insurance coverage.
At present, co-payment provisions apply to certain health insurance policies, particularly those designed for senior citizens aged above 60, according to the information available. The higher likelihood of medical treatment and claims among older policyholders is one reason insurers may use such provisions to share the financial risk.
If the proposed change becomes mandatory across health insurance policies, the impact could extend to younger policyholders as well. Families would need to budget not only for their annual premiums but also for out-of-pocket expenses whenever a hospitalisation results in an insurance claim.
Some financial experts believe that insurers could consider reducing premiums if policyholders are required to share a portion of treatment costs. However, any such reduction would depend on the final regulatory framework and the pricing decisions of individual insurers.
For consumers, the key concern is whether any reduction in premiums would adequately compensate for the additional expenses payable during a medical emergency. Until the proposal is formally approved and detailed guidelines are issued, policyholders should check their existing policy documents for co-payment clauses, exclusions and other restrictions before assuming that their insurer will cover the entire eligible hospital bill.
