Insurance regulator IRDA today said it will follow the Delhi High Courts direction to take steps on resuming cashless facility to policyholders provided by four PSU general insurers.

Now that HC has given direction, we will follow that, IRDA Chairman J. Hari Narayan told reporters on the sidelines of a FICCI event here.

On Tuesday, the Delhi High Court had asked IRDA to make some arrangement to provide cashless facilities to policyholders, amid the suspension of cashless treatment facility at several big hospitals by four public sector general insurers - New India Assurance, United India Insurance, National Insurance and Oriental Insurance.

The Insurance Regulatory and Development Authority (IRDA) should, as a regulator of the insurance industry, intervene and ensure that such changes do not affect existing policyholders ...,? High Court Justice S. Muralidhar had ruled.

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Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

With judiciary getting involved in the matter, the consumers would benefit for the short term but the health insurance industry needs long-awaited reforms. If these reforms are not undertaken now, the insurers will simply charge more premium to recover the losses without bringing in the efficiency drives.

With an inefficient system, nobody benefits in long-term & we continue to hold our view that the changes are MUST.

The idea of differentiated products is good but those should be based on sound underwriting principles with innovation in risk management & a higher premium product for big hospital is not what we need now. The thought process for such products emanates from Insurer’s outlook of If-you-want-big-hospital-you-pay-big-money.