The General Insurance Council (GIC) and the Insurance Regulatory and Development Authority of India (IRDAI) are in discussions with the central government to establish an independent regulatory body for the healthcare sector. 

Ramaswamy Narayanan, CMD of the GIC of India told Moneycontrol.  

The proposed regulator would mirror existing sectoral authorities such as IRDAI for insurance, SEBI for capital markets, and RBI for banking.  

He cited two primary concerns prompting this initiative including “fraudulent practices” and “discriminatory pricing” by hospitals based on patients’ insurance status.  

Narayanan was quoted by Moneycontrol as saying: “Today, when a patient walks into a hospital, the first question asked is whether they have an insurance policy. If the answer is yes, the hospital’s attitude, and pricing, often changes dramatically.” 

He noted that the healthcare industry lacks “pricing standardisation” and oversight, with hospitals frequently charging insured patients up to three times more than cash-paying patients, sometimes “inflating costs” significantly. 

He added: “Eventually, policyholders are penalised through higher annual premiums. While the IRDAI has set limits on annual premium hikes, the underlying problem remains unaddressed.”  

This practice, described as systematic fraud, contributes to “higher premiums” for consumers.  

A National Health Authority report under Ayushman Bharat supports these findings, stating that private hospitals often bill insured patients two to three times more than uninsured patients for “identical treatments”.  

This discrepancy inflates medical costs for insurers and drives up consumer premiums, the report added.  

Separately, the Indian Government, in the Budget session 2025-26, proposed increasing the foreign direct investment limit in the insurance sector from 74% to 100%.