Health Insurance in India: What Changed, What’s Proposed, and What It Means for You

The exemption applies to premiums paid on or after 22 September 2025 for eligible individual health insurance policies, including family floater plans, senior citizen covers, and individual health policies with embedded covers (such as personal accident or travel benefits) sold as a single product for a single price.

Commercial group health insurance policies and employer-sponsored corporate group plans continue to attract the standard 18% GST rate, as the statutory exemption is explicitly restricted to individual (non-group) insurance contracts.

The 18% GST line item is no longer added to eligible individual health insurance premiums paid on or after 22 September 2025. However, policyholders should avoid assuming an automatic, exact 18% reduction on their final renewal invoice compared to the previous year, as base premiums are actuarially determined by each insurer and can reflect age-band transitions, medical inflation, or product-level pricing revisions.

The insurer must decide on a cashless authorisation request immediately and within not more than 1 hour of receiving the request from the hospital. This mandate governs operational decision turnaround times (approving cashless access, raising specific clinical queries, or declining cashless pre-authorisation). It does not guarantee approval of every claim or require every hospital to provide cashless treatment under every circumstance: cashless availability depends on hospital network empanelment (or applicable cashless arrangements) and policy terms, waiting periods, and exclusions. Where cashless pre-authorisation is not granted, the policyholder retains the right to submit a reimbursement claim in accordance with the policy contract.

Insurers must grant final authorisation within 3 hours of receiving the discharge authorisation request and final bill from the hospital. The circular emphasises that in no case shall a policyholder be made to wait to be discharged from the hospital. However, this timeline does not mean every billed item is payable in full: final approved amounts remain governed by admissible medical expenses, sum insured limits, room-rent caps, proportionate deductions, non-medical exclusions, and any applicable contractual deductibles or co-payments.

Under Chapter I, Clause 16(b) of the Master Circular, if there is any delay beyond the stipulated 3 hours in granting final discharge authorisation, any additional amount charged by the hospital as a result of that delay must be borne directly by the insurer from its shareholders’ fund, rather than billed to the policyholder or deducted from the policy sum insured.

Under the 2024 regulatory framework, the maximum waiting period for disclosed pre-existing diseases (as well as specified disease/procedure waiting periods, other than claims arising from an accident) is capped at 36 months (3 years) of continuous coverage, reduced from the earlier 48-month (4-year) limit. Insurers may offer shorter waiting periods or optional waiting-period modification riders according to product design, but cannot exceed 36 months. If a policyholder increases their sum insured at renewal, applicable waiting periods start afresh only for the enhanced portion of the sum insured.

After completion of 60 continuous months (5 years) of uninterrupted coverage (reduced from the earlier 8-year / 96-month rule), no health insurance policy or claim shall be contestable on grounds of non-disclosure or misrepresentation, except in cases of proven, established fraud and permanent exclusions specified in the policy contract. Accrued waiting-period and moratorium credits earned under previous policies carry forward when a policyholder renews within the statutory grace period (15 days for monthly instalments; 30 days for quarterly, half-yearly, or annual modes), migrates to another policy with the same insurer, or ports to a different insurer, up to the previous sum insured and accrued No Claim Bonus. Where the sum insured is enhanced, the 60-month moratorium applies from the date of enhancement specifically to the increased limit. Crucially, the moratorium is not an unconditional guarantee that every claim will be paid: claim admissibility remains subject to policy coverage terms, permanent exclusions, sub-limits, room-rent conditions, and medical necessity.

Under Chapter I, Clause 1(a)(i) of the Master Circular, insurers are required to make products, add-ons, or riders available catering to all ages (removing the legacy 65-year statutory entry-age ceiling), while underwriting criteria and pricing remain product-specific. Under Clause 10, a health insurance policy is lifelong renewable and renewal cannot be denied on the grounds of the insured’s age or claims made in preceding policy years—except on grounds of established fraud, misrepresentation, or non-cooperation, or where a product is withdrawn (in which case the insurer must provide suitable options to migrate with continuity credits preserved).

The General Insurance Council (the representative body of non-life insurers) deliberated on a draft concept to introduce a standard 10% co-payment on inpatient claims (capped at ₹5 lakh per claim) aimed at addressing medical inflation. However, as documented in national financial media reporting (Business Standard, 5 October 2026; Financial Express, 6 October 2026), this concept remains strictly an unapproved industry proposal and does not carry regulatory notification or statutory approval from IRDAI.

Whether a co-payment applies to a hospital claim depends on the terms and conditions of the specific policy contract and schedule, including any applicable co-payment selected by the policyholder. During an active policy period, coverage is governed by the issued policy contract and applicable regulations. Any modification or withdrawal of an insurance product must comply with the applicable IRDAI regulations and product-filing requirements. Where required, insurers must provide appropriate notice and migration options to policyholders. Policyholders should verify their coverage through official insurer communications and policy documents rather than assume that an unapproved industry proposal applies to their policy.

Developed by the National Health Authority (NHA) under the Ayushman Bharat Digital Mission (ABDM NHCX Portal) and supported under Chapter II, Section A, Clause IV(c) of the IRDAI Master Circular, the NHCX functions as a centralised digital interoperability gateway. It connects hospitals, TPAs, and insurers via Fast Healthcare Interoperability Resources (FHIR) protocols, supporting the standardised digital exchange of claims and pre-authorisations.

The standardisation of private hospital procedure rates has been examined under the Clinical Establishments Act and related public interest litigation before the Supreme Court of India. As confirmed in official government records, including Rajya Sabha Unstarred Question No. 2817 (answered on 17 March 2026), public health is a State subject, no uniform nationwide rate schedule has been notified for private hospital treatments, and regulatory adoption and fee structures continue to vary across states while the matter remains sub-judice.