The United States Aid for International Development will assist the Insurance Regulatory and Development Authority in strengthening the health insurance sector, which despite the entry of private insurance players continues to be underdeveloped.

A working group under the insurance regulator met in Delhi yesterday with representation from health and finance ministries, life and non-life insurance companies, third party administrators, hospitals and members of the General Insurers' Public Sector Association of India.

In the first exploratory meeting called by the insurance regulator, it was discussed that policy changes are warranted both at the government and Irda level to fully develop the health sector. USAID has appointed foreign consultancy firm Baring Point, to undertake a complete study of the Indian health sector.

Further, through closer interactions with the Ministry of Health, the idea is to streamline the sector and bring about integration of various players.

Baring Point has been given six month time to finalise its report, having been given terms of reference, including the need to verify whether impediment to growth follows over-regulation of the industry. Fundamentals changes need to be worked out first before the health sector can attract foreign equity participation, said officials.

There is no certification of hospitals, no standardisation of healthcare, or any central depository to capture data. The working group will look into the inspection and other regulatory aspects before finalising its report.

This follows the finance ministry having advised Irda to take the assistance of USAID and establish international standards in the country. Today, health insurance covers less than 20 lakh lives, indicating ample potential for higher coverage.