How has Health Insurance in India Changed Over the Years?
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Health insurance in India is an exceedingly growing sector, growing at 9% according to the Economic Times. In fact, in 2024-25, the sector recorded a premium volume of ₹1.2 lakh crore.
As awareness grows and more people become secure, a question arises: When did it all start?
The history dates back to the Industrial Revolution in the 1850s, when the British established Triton Insurance Company in Calcutta (now Kolkata), marking the start of general insurance in India.
What is the Origin of Health Insurance in India?
In recent history, the first milestone in the development of health insurance can be traced back to the post-independence era.
1. Employee State Insurance Scheme
The first step towards the standardisation of health insurance was the introduction of ESIS. This scheme, launched in 1948, aimed to provide social security to blue-collar workers. Fast forward to 2026, and this scheme is still in use, where the employer and employee both make contributions to it.
2. Central Government Health Scheme
The CGHS came into being in 1954 for central government employees and their family members. It was a pivotal measure to ensure that government employees get comprehensive healthcare services and continue to be active to this day.
These 2 schemes became pivotal to the evolution and growth of organised health insurance in India.
Historical Milestones in the Evolution of Health Insurance
● 1957: General Insurance Council
The GI Council was formed as a part of the Insurance Assurance of India, and it framed a code of conduct to ensure fair business practices.
● 1973: Nationalisation of General Insurance Business
The General Insurance Business (Nationalisation) Act combined 107 combines int0 4 companies. The General Insurance Corporation of India commenced business in 1973.
● 1986: Introduction of Mediclaim
The groundbreaking mediclaim policy was introduced by the General Insurance Corporation of India. It reimbursed policyholders for their hospital bills.
● 1999: IRDA Act
The Insurance Regulatory and Development Authority Act introduced oversight to the health insurance sector. It also allowed foreign companies to establish business in partnership with Indian companies. Later, it became a statutory body in 2000.
● 2001: Introduction of TPA
Third-Party Administrators play a major role in connecting insurance companies with hospitals. The IRDAI introduced it in 2001, and operations began in 2003.
● 2016-2025: Strict Regulations
IRDAI implemented major changes and regulations during this period. These changes further enhanced health insurance in India.
● 2024-Present: Cashless Everywhere Initiative
The GI Council introduced the concept of cashless everywhere, and IRDAI introduced penalties for delays of more than 3 hours of discharge.
Final Words
Health insurance in India has evolved from limited, employer-based coverage to a more inclusive, digital, and government-supported system. Increased awareness, regulatory reforms, and schemes like Ayushman Bharat have expanded access.
Despite progress, there are still challenges, such as affordability, penetration, and claim transparency. With proper oversight, the IRDAI and the Indian government aim to further solidify the health insurance sector in India.