India’s outpatient department (OPD) spending reached $37.7 billion in FY24, yet insurance penetration for OPD remains below 0.1%. OPD insurance typically covers expenses during outpatient visits, including doctor consultations, diagnostics, pharmacy bills, and preventive check-ups.
Despite rising out-of-pocket costs, adoption of OPD coverage remains limited.
According to Dr Suman Katragadda, CEO of Heaps.ai, the low penetration stems from a misunderstanding of what ‘prevention’ in insurance truly means.
He explained that most current OPD products focus on diagnostics or health check-ups, but effective prevention requires continuous care, structured follow-ups, and interventions based on clinical needs. Without this, patients either underuse care, worsening conditions, or overuse benefits, leading to inefficiencies and skepticism among both customers and insurers.
Sarita Joshi, Head of Health and Life Insurance at Probus, said India’s insurance system has historically prioritised hospitalisation over OPD visits.
She noted that OPD care involves frequent, small-value expenses, which are difficult to standardise between urban and rural areas.
Policyholders often view doctor visits and medicines as routine expenses rather than insurable costs, while tedious claims processes and limited cashless networks further discourage adoption.
Chris George, Co-Founder and CEO of QubeHealth-Pay, added that administrative complexities, non-standardised clinic billing, and the perception that OPD costs are manageable have further limited uptake, despite the significant aggregate out-of-pocket burden.
Anand Bansal, Product Head (Health) at Square Insurance, noted that the underlying structure of Indian health insurance adds to the challenge.
“Health insurance in India was originally built to cover rare, high-cost hospitalizations, not everyday doctor visits. With OPD, claims are small but frequent, which makes premiums look disproportionately high. Fragmented provider networks, real fraud risk, and an 18% GST on premiums make OPD hard to scale,” he explained.
Making OPD insurance more relevant
Experts suggest that OPD insurance could become more appealing if structured as part of a broader care journey rather than a transactional payout.
According to Katragadda, plans should be personalised, factoring in disease severity, lifestyle, and risk factors, with clear follow-ups and timely medication adjustments.
Digital nudges and care coaches can help patients adhere to treatment plans.
Joshi emphasised that flexible, targeted plans could improve relevance. She suggested packages for chronic disease management, preventive health check-ups, and teleconsultations. Bundling OPD coverage with hospitalisation insurance and forming partnerships with hospitals, diagnostics labs, and online pharmacies can reduce out-of-pocket expenses.
