Can Indian health insurance compete with global standards?
While metros see fast digital approvals, smaller towns and non-network hospitals sometimes still involve delays or negotiation, an area where global systems enjoy more uniformity.
- Sep 4, 2025,
- Updated Sep 4, 2025 12:15 PM IST
When the 38-year-old dentist moved back from London to Bengaluru, she braced herself for traffic jams, spicy street food, and the chaos of homecoming. What she didn’t expect was how different health insurance would feel.
Just weeks after enrolling her children in school, a small playground accident sent her younger son to the emergency ward with a fractured arm. In the UK, she never thought twice before walking into a hospital approvals were automatic, bills invisible, and out-of-pocket costs negligible. But here as she handed over her policy card, a wave of doubt hit her: “Will this really be cashless? Will I have to swipe my card first?”
That anxious moment captures the question many Indian families silently ask: Can our health insurance system truly stand up to global standards—on claim ratios, service quality, and out-of-pocket costs?
Claims: Are we catching up on speed and certainty?
Globally: In advanced markets like Germany or Japan, claims are rarely debated. The process is seamless and patients focus on recovery, not paperwork. Settlement rates exceed 95%, and speed is built into the system.
India today: We are much closer than many believe. Several Indian insurers now settle 99–100% of health claims within three months, a figure comparable to global peers. New IRDAI rules mandate cashless approvals within 1 hour and discharge clearances within 3 hours. For families like her, this means less fear in the waiting room, more focus on care.
The gap: Consistency. While metros see fast digital approvals, smaller towns and non-network hospitals sometimes still involve delays or negotiation, an area where global systems enjoy more uniformity.
Service Quality: Is the experience predictable?
Globally: In places like the UK or Japan, families trust the system implicitly. Hospitals rarely refuse cover, and grievance redress is institutionalised and efficient.
India today: The landscape is shifting. Initiatives like Cashless Everywhere are breaking network boundaries, allowing patients to access cashless treatment across hospitals. Proposed Internal Administration inside insurers promise quicker, fairer resolution of complaints. And standardised timelines for service whether endorsements, approvals, or discharge are giving customers more confidence.
The gap: Uniform bedside experience. While metros see smoother execution, smaller cities may still face disputes over room-rent caps, consumables, or sub-limits frictions that advanced markets have largely ironed out.
Out-of-Pocket Costs: The toughest benchmark
Globally: Across OECD countries, patients pay under 20% of total health expenses from their own pockets. Robust public funding and comprehensive insurance shield families from catastrophic costs.
India today: Families still pay nearly 47% of health expenses out-of-pocket, an improvement from 69% two decades ago, but still more than double the global benchmark. The burden is driven by inadequate cover (policies stuck at ₹3–5 lakh), high private hospital costs, and outpatient expenses often excluded from standard policies.
The gap: This is where India lags the most. While claims and service are improving rapidly, the affordability challenge remains significant.
What Families Can Do Now
Global parity may take years, but families don’t have to wait to protect themselves. Three actions matter today:
1. Buy global-scale cover. In metros, ₹15–25 lakh is the new baseline. Add super top-ups to reach ₹50 lakh–₹1 crore, mirroring the protection families abroad take for granted.
2. Prioritise strong cashless networks. A one-hour approval is worth far more than a glossy claim ratio. Choose insurers with robust hospital tie-ups and proven service speed.
3. Review annually. Medical inflation runs at 12–15% in India. Without regular upgrades, today’s cover can become tomorrow’s shortfall.
The Future Within Reach
For her, the story ended on a hopeful note. Her son’s fracture was treated cashlessly, the approval came within an hour, and the family walked out without a dent to their savings. “It wasn’t as automatic as London,” she admitted, “but it felt reassuringly close.”
That is India’s health insurance journey today. On claims and service, we are already at the edge of global standards. On out-of-pocket costs, the gap is real, but the direction is encouraging.
The true benchmark, however, is not just about matching the UK or Japan. It is about ensuring that no Indian family has to choose between health and financial security. If we keep building on speed, transparency, and adequacy of cover, I believe Indian health insurance will not just compete with global systems, it may redefine them in its own way.
(Views are personal; the author is Joint Chairman & Managing Director, BajajCapital)
When the 38-year-old dentist moved back from London to Bengaluru, she braced herself for traffic jams, spicy street food, and the chaos of homecoming. What she didn’t expect was how different health insurance would feel.
Just weeks after enrolling her children in school, a small playground accident sent her younger son to the emergency ward with a fractured arm. In the UK, she never thought twice before walking into a hospital approvals were automatic, bills invisible, and out-of-pocket costs negligible. But here as she handed over her policy card, a wave of doubt hit her: “Will this really be cashless? Will I have to swipe my card first?”
That anxious moment captures the question many Indian families silently ask: Can our health insurance system truly stand up to global standards—on claim ratios, service quality, and out-of-pocket costs?
Claims: Are we catching up on speed and certainty?
Globally: In advanced markets like Germany or Japan, claims are rarely debated. The process is seamless and patients focus on recovery, not paperwork. Settlement rates exceed 95%, and speed is built into the system.
India today: We are much closer than many believe. Several Indian insurers now settle 99–100% of health claims within three months, a figure comparable to global peers. New IRDAI rules mandate cashless approvals within 1 hour and discharge clearances within 3 hours. For families like her, this means less fear in the waiting room, more focus on care.
The gap: Consistency. While metros see fast digital approvals, smaller towns and non-network hospitals sometimes still involve delays or negotiation, an area where global systems enjoy more uniformity.
Service Quality: Is the experience predictable?
Globally: In places like the UK or Japan, families trust the system implicitly. Hospitals rarely refuse cover, and grievance redress is institutionalised and efficient.
India today: The landscape is shifting. Initiatives like Cashless Everywhere are breaking network boundaries, allowing patients to access cashless treatment across hospitals. Proposed Internal Administration inside insurers promise quicker, fairer resolution of complaints. And standardised timelines for service whether endorsements, approvals, or discharge are giving customers more confidence.
The gap: Uniform bedside experience. While metros see smoother execution, smaller cities may still face disputes over room-rent caps, consumables, or sub-limits frictions that advanced markets have largely ironed out.
Out-of-Pocket Costs: The toughest benchmark
Globally: Across OECD countries, patients pay under 20% of total health expenses from their own pockets. Robust public funding and comprehensive insurance shield families from catastrophic costs.
India today: Families still pay nearly 47% of health expenses out-of-pocket, an improvement from 69% two decades ago, but still more than double the global benchmark. The burden is driven by inadequate cover (policies stuck at ₹3–5 lakh), high private hospital costs, and outpatient expenses often excluded from standard policies.
The gap: This is where India lags the most. While claims and service are improving rapidly, the affordability challenge remains significant.
What Families Can Do Now
Global parity may take years, but families don’t have to wait to protect themselves. Three actions matter today:
1. Buy global-scale cover. In metros, ₹15–25 lakh is the new baseline. Add super top-ups to reach ₹50 lakh–₹1 crore, mirroring the protection families abroad take for granted.
2. Prioritise strong cashless networks. A one-hour approval is worth far more than a glossy claim ratio. Choose insurers with robust hospital tie-ups and proven service speed.
3. Review annually. Medical inflation runs at 12–15% in India. Without regular upgrades, today’s cover can become tomorrow’s shortfall.
The Future Within Reach
For her, the story ended on a hopeful note. Her son’s fracture was treated cashlessly, the approval came within an hour, and the family walked out without a dent to their savings. “It wasn’t as automatic as London,” she admitted, “but it felt reassuringly close.”
That is India’s health insurance journey today. On claims and service, we are already at the edge of global standards. On out-of-pocket costs, the gap is real, but the direction is encouraging.
The true benchmark, however, is not just about matching the UK or Japan. It is about ensuring that no Indian family has to choose between health and financial security. If we keep building on speed, transparency, and adequacy of cover, I believe Indian health insurance will not just compete with global systems, it may redefine them in its own way.
(Views are personal; the author is Joint Chairman & Managing Director, BajajCapital)