General insurers in India have discussed making policyholders pay 10% of every inpatient hospitalisation claim under retail health insurance policies. The idea is only a proposal at this stage. It has not been approved by the Insurance Regulatory and Development Authority of India (IRDAI), and a report in Business Standard on 5 October 2026 said the regulator is unlikely to clear it.
What is being proposed
A co-payment, or co-pay, is the share of an admissible hospital bill that the policyholder pays from their own pocket, with the insurer paying the rest. Under the plan discussed at a meeting of non-life insurers with the General Insurance Council, a 10% co-pay would apply to inpatient hospitalisation costs in retail health policies.
Media reports on the proposal, citing The Times of India and NDTV Profit, described these details:
- The insurer would pay 90% of eligible inpatient costs and the policyholder 10%, with the policyholder's share capped at ₹5 lakh per claim. On a ₹5 lakh bill, for example, the policyholder would pay ₹50,000.
- It would cover retail indemnity policies, retail-under-group policies, the indemnity part of combination products, and policies moved through migration or portability.
- It would apply to both cashless and reimbursement claims, including accident cases, but not to outpatient (OPD) claims.
- The 10% share could not be waived through add-ons or recovered from another health policy.
One report said the change could start from 1 January 2027. This date has not been confirmed by insurers or the regulator, and the reports did not give a final timeline.
The same discussions reportedly also covered a common system for empanelling hospitals and a formal process for settling disputes between insurers and hospitals.
Why insurers want it
According to the reports, insurers say rising hospital costs and overbilling are pushing up claims. They argue that when a policy pays the full bill, patients have less reason to question extra tests, longer stays or costlier room categories. A senior executive quoted by Business Standard said rising hospital costs are affecting both insured and uninsured people. Some reports said a co-pay could help lower premiums, but no premium figures have been published.
Why it may not go through
Business Standard reported that an industry-wide co-pay would need IRDAI's approval, and people in the industry said this was not likely. One executive warned that a common move by all insurers carries "a risk of cartelisation", since each company designs its own products.
Co-pays already exist in the market. Some insurers sell health plans with co-payments of 10% to 30%, while other plans have no co-pay or deductible. Under the current "use and file" product system, an individual insurer can change the design of its own products, which an industry broker said could be a more likely route than a common rule.
The wider cost debate
The proposal comes as general insurers have also asked IRDAI to link expense-of-management limits to insurer size and to exclude group health and crop insurance from that calculation. An executive told Business Standard that pricing some group products below claim costs pushes up retail health rates.
For now, existing policies continue on their current terms. Any co-pay already in a policy is listed in its policy wording and schedule.