Insurers want you to pay 10% of your hospital bill. The Supreme Court is looking at the hospitals.
Over the past fortnight, two stories have asked who should pay when hospital bills go up.
Insurers discussed making patients pay 10% of every hospital claim. The Supreme Court asked why a cancer drug sold to shops for ₹2,700 carried a printed price of ₹27,000. And on 8 October, the government said it will cap trade margins on cancer drugs. These moves point at different people, and each one changes what you pay in a different way.
In short
- The 10% co-pay is a proposal insurers have discussed. IRDAI has not approved it or said anything about it.
- Insurers say premiums would fall, but no figure has been given. Their plan also mentions action on hospital costs, but none of it has numbers attached.
- A co-pay cuts what the insurer pays. It does not, by itself, cut what the hospital charges.
- On 8 October, the government said it will cap trade margins on 110 cancer drugs at 30% of the printed price. The Supreme Court hears the case again on 12 October.
- My view: before patients are asked to carry more of the bill, insurers should show the premium saving and protect people who need repeated hospital care.
What insurers want
On 4 October, the Times of India reported that general insurers want patients to pay 10% of every hospital claim from 1 January 2027. Your share would be capped at ₹5 lakh per claim. In return, premiums would be lower.
It would apply to retail health policies, including policies you switch or port. It would cover both cashless and reimbursement claims, but not outpatient visits. You could not buy a rider to remove it, and you could not claim the 10% from a second policy or a super top-up.
The same report says the plan has a hospital side too: common empanelment of hospitals across insurers, benchmark rates for treatments, contracts that pay for outcomes, and a forum to settle disputes between insurers and hospitals. That part matters, and I come back to it below.
This is not a rule yet. Insurers discussed it at the General Insurance Council, their industry body. IRDAI, the regulator, has not issued anything on it. A senior executive at a private insurer told Business Standard that IRDAI would have to make it compulsory, and that this is "not likely to happen". Some websites have reported it as an IRDAI plan. It is not.
Is there a co-pay today?
Only in some policies. Many senior citizen plans have a co-pay of 10% to 30%. Some policies have one if you are treated in a costlier city than the one you bought the policy for, and some insurers sell cheaper plans where you choose a co-pay. Most family policies sold today have none. If yours has one, it is written in your policy and in its one-page Customer Information Sheet.
Even without a co-pay, you already pay for some things yourself: items the policy does not cover, such as gloves, masks and attendant charges; cuts if you take a room above your room rent limit; caps on certain treatments; and a deductible, if you chose one. The proposal would make a 10% co-pay compulsory on every retail policy, including those that have none today, on top of all of this.
What 10% would cost you
| Hospital claim | You pay | Insurer pays |
|---|---|---|
| ₹1 lakh | ₹10,000 | ₹90,000 |
| ₹5 lakh | ₹50,000 | ₹4.5 lakh |
| ₹10 lakh | ₹1 lakh | ₹9 lakh |
| ₹25 lakh | ₹2.5 lakh | ₹22.5 lakh |
| ₹1 crore | ₹5 lakh (the cap) | ₹95 lakh |
Based on the reported terms. The claim here is the amount your policy accepts, after any discount and after items the policy does not cover.
The ₹5 lakh cap is per claim, not per year. If the reported wording holds, a family with three ₹20 lakh hospital stays in one year would pay ₹2 lakh each time, ₹6 lakh in all. The full proposal is not public, so it may yet include a yearly limit. Nothing reported so far mentions one.
One bill, step by step
Here is how the 10% would work on a real-sized bill.
The hospital bill is ₹10 lakh
This is what the hospital charges for your stay.
The insurer's discount comes off: ₹9 lakh
The insurer has a deal with the hospital and gets ₹1 lakh off. IRDAI's rules say that saving goes to you, not the insurer.
Items not covered come off: ₹8.5 lakh
Your policy does not pay for some things, such as gloves, masks and attendant food. Say these add up to ₹50,000. You pay that yourself, even today. The insurer looks only at the rest.
The 10% co-pay: ₹85,000
The new co-pay applies to the ₹8.5 lakh. Ten per cent of that is ₹85,000. You pay that too.
What comes out of your pocket: ₹1.35 lakh
₹50,000 for items not covered, plus ₹85,000 of co-pay. The insurer pays the remaining ₹7.65 lakh.
| Step | Amount |
|---|---|
| Hospital bill | ₹10 lakh |
| Minus the insurer's hospital discount (passed to you) | − ₹1 lakh → ₹9 lakh |
| Minus items your policy does not cover (you pay) | − ₹50,000 → ₹8.5 lakh |
| 10% co-pay on ₹8.5 lakh (you pay) | ₹85,000 |
| You pay in total | ₹1.35 lakh |
| Insurer pays | ₹7.65 lakh |
An illustration. The ₹1 lakh discount and ₹50,000 of items not covered are assumed amounts; real bills vary.
So the 10% is not the only thing you would pay. Policies already leave some items out, and the co-pay would be added on top. On a ₹10 lakh bill, you could pay ₹1.35 lakh, not ₹1 lakh.
What you would get back
Insurers say premiums would fall. None has said by how much.
To see why that number matters, say your family policy costs ₹25,000 a year and the premium falls by 10%. That cut is my assumption, because no insurer has given one. You would save ₹2,500 a year. A ₹10 lakh hospital stay would cost you ₹1 lakh more than it does today. That is not a full test of value, because insurance is priced on the odds of claiming, not on one bad year. But it shows the size of the risk a family would take on in exchange for the saving.
Someone young and healthy who rarely goes to hospital could come out ahead. Someone with cancer, on dialysis, over 70, or with repeated admissions is likely to pay more. Before anyone is asked to take on 10% of every claim, insurers should say what the premium cut is.
Claims are already cut
A co-pay is meant to make patients care about cost. It is worth knowing how much is already taken out of claims. IRDAI's annual report for FY25, which I went through in Edition 75, shows ₹1,32,488 crore of health claims to be settled during the year, including claims left over from the year before. Insurers disallowed ₹18,521 crore under policy terms and repudiated ₹11,412 crore, ₹29,933 crore in all.
Those figures show the gap between what was claimed and what insurers accepted. They do not show how much of it households finally paid, or whether each cut was fair. They also cover all health policies, not only the retail ones the co-pay would apply to. What they do show is that a comprehensive-looking policy already does not pay every rupee of a hospital bill. A co-pay would come on top.
Across all health spending in India, households paid 43.4% from their own pockets in 2022-23, up from 39.4% the year before, according to the National Health Accounts released in May 2026.
The insurers' side
Insurers have a point. When someone else pays the whole bill, a patient has little reason to question an extra test, a bigger room or an extra day, and hospitals face little pushback on price. A co-pay gives patients a reason to ask. Patients already paying something today does not change that; an extra 10% could still change some decisions.
The question is which decisions. The largest study of co-pays, the RAND experiment in the United States, found that people who paid part of the bill used less care, and they cut useful care about as much as care they did not need. Most people's health did not suffer, but the poorest and sickest did worse on some measures. That study is old and American, so it cannot predict what this Indian proposal would do. It is a reason to protect the sickest patients from the start. Patients also do not decide most of what happens in a hospital. Someone having a heart attack does not compare prices.
Cancer drug prices: the court and the government
The case was filed by advocate Kishan Chand Jain and others, and is being heard by Justices Vikram Nath and Sandeep Mehta. It is about how India controls medicine prices.
| Date | What happened |
|---|---|
| 22 Sep 2026 | The court asked how a cancer drug sold to shops for ₹2,700 could have a printed price of ₹27,000. It called this "broad daylight dacoity". |
| 29 Sep 2026 | It called tenfold hospital markups "carnage". It asked the government why the printed price should not be capped at 16% above what the shop pays, and asked about hospitals that make patients buy only from their own pharmacy. It did not order a cap. |
| 30 Sep 2026 | Shares of Apollo, Yatharth, Fortis and Max fell by up to 7% during the day. |
| 8 Oct 2026 | Government sources said trade margins on all non-scheduled cancer drugs will be capped at 30% of the printed price. |
| 12 Oct 2026 | Next hearing. |
Some reports give the shop price as about ₹3,000. Some also wrote "16% above MRP", which is a mistake.
Why such a gap is allowed
The government sets ceiling prices for medicines on its essential list. The formula for those prices includes a 16% margin for the retailer, worked out from average market prices. That is not the same as saying every shop can mark up only 16% over what it actually paid. For medicines outside the list, which the petition says are around 80% of the market, there is no routine ceiling on the launch price. After launch, the company can raise the price by up to 10% a year. The government does have special powers to step in, and it has used them before.
What the government announced on 8 October
Government sources said trade margins on all non-scheduled cancer drugs will be capped at 30% of the printed price. That covers branded and generic, Indian and imported, and patented and off-patent medicines: about 110 drugs, including 35 patented ones. Officials expect printed prices to fall by up to 70% and patients to save about ₹2,500 crore a year. The list is still being finalised. Officials also said the approach could later be extended to other medicines and to consumables and devices such as IV kits and catheters.
This builds on what was done before. In February 2019, the drug price regulator capped trade margins on 42 cancer drugs at 30%, covering 355 brands, with early estimates of cuts of up to 85% on some of them. The government says that step saved about ₹984 crore a year. In 2021, the same method was used for some medical devices, including pulse oximeters.
Two things to note. A cap of 30% of the printed price is a different measure from the court's question about 16% above the shop price, so the court may still ask about it on 12 October. And these are statements from officials; until the formal notification and the list are published, nothing has changed at the pharmacy counter.
The court also said taxpayers pay these prices under Ayushman Bharat. That is only partly right. The scheme pays hospitals a fixed price for each treatment, and that price usually includes medicines. So a high printed price does not hit the scheme the way it hits a private patient.
Who checks hospital prices?
The same insurance executive who doubted the co-pay said insurers should instead ask for a regulator to control hospital costs. Some controls already exist, but they are patchy. Ayushman Bharat sets package rates for the hospitals in its network. Some states require hospitals to display their rates; West Bengal, for example, issued rules in January 2026 asking hospitals to display and submit fixed rates and package charges. There is no national body that does this for privately insured patients.
Insurers' own bargaining power is limited. In August 2025, a hospital association told its members to stop cashless treatment for Bajaj Allianz customers over payment rates. Within a week, the two sides reached an agreement and the suspension was withdrawn. I wrote about this in Edition 76. The insurers' plan for benchmark rates and common empanelment is meant to strengthen their hand. It has no numbers yet.
One caution on the drug story. Cancer drug margins are one part of a hospital bill. Nobody has shown how much of the rise in insurance claims comes from medicine markups, and how much from more admissions, sicker patients, other hospital charges or fraud. That is the breakdown insurers should publish.
What other countries do
Many countries ask patients to pay part of the bill. What matters is what stops that share from adding up. Three examples:
| Country | What the patient pays | What protects them |
|---|---|---|
| India (proposal) | 10% of each hospital claim | ₹5 lakh per claim. No yearly limit reported |
| Switzerland | A yearly deductible, then 10% of costs, plus CHF 15 a day in hospital | The 10% share is capped at CHF 700 a year for an adult. The deductible and the daily hospital charge are separate |
| Taiwan | 5% to 30% of hospital costs | In 2026, NT$57,000 per hospital stay and NT$95,000 a year for each insured person. People with serious illness and low-income households are exempt |
| Germany | Small fixed charges | All charges capped at 2% of household income a year, and 1% for people with chronic illness |
Amounts left in local currency. These systems differ from India's private insurance in many ways; the point here is how they limit what patients pay.
Taiwan is the closest to the Indian idea, because it has a limit per stay. It also has a yearly limit, and it exempts people with serious illness. Germany links the limit to income. None of them asks the sickest patients to pay the same share, without a yearly limit, as everyone else.
What I think should happen
I am not against co-pays as such. Many good health systems use them. But a co-pay moves cost from the insurer to the patient, and the patient has the least say over what goes into a hospital bill. It should come with a clear premium saving and real protection, and alongside the action on hospital prices that insurers say they want.
IRDAI
Make clear that no compulsory co-pay can start without its approval. If one is proposed, ask for the premium cut, a yearly family limit well below ₹5 lakh, lower rates for cancer, dialysis and other long illnesses, and help for low-income policyholders.
Insurers
Publish the full proposal and the data behind it: how much of the rise in claims comes from more admissions, higher hospital prices, medicine costs and fraud. Put numbers on the hospital side of the plan. And keep a full-cover policy for people willing to pay for it.
The government
Publish the cancer drug notification and the list of 110 drugs quickly. Explain on 12 October how the 30% cap relates to the court's 16% question. And look at hospitals that make patients buy only from their own pharmacy, since a margin cap helps only if patients can buy elsewhere.
You, as a policyholder
Nothing in your policy has changed. Check the co-pay, room rent limit and sub-limits it already has, because those already decide what you pay. If your insurer changes the terms at renewal, you can apply to port to another insurer; if they accept you, your waiting-period credit moves with you.
What to watch
- 12 October: the Supreme Court hearing, and what the government says about the 16% question.
- The formal notification and the final list of cancer drugs under the 30% cap.
- Any statement from IRDAI on the co-pay.
- Whether insurers publish the full proposal, a premium figure, and a yearly limit.
I would support a co-pay if insurers show their claims data, promise a premium cut that can be checked, add a yearly family limit with protection for the very sick, and act on hospital prices at the same time.