Rs 100-crore capital base may be lowered

The government is also devising a slew of schemes aimed at ensuring cost- effective insurance options to the people. These new insurance models would require the government to incur substantial additional cost.

A formal announcement is expected in Budget 2005. Incumbent players include public sector general insurance companies like National Insurance, Oriental Insurance, United India Insurance and New India Assurance. Private players like Tata-AIG, ICICI-Lombard and Sundaram Finance also offer health insurance.

The government reckons that absence of smaller players in the sector has been a reason for health insurance not gathering momentum in the country. It is considering an amendment to the IRDA Act to bring down the eligibility threshold for health insurance players.

The Centre is considering structural revamp of the system for rendering health insurance options more attractive to the people and making these insurance instruments universally available, official sources said. Acting upon a special mandate given by the PMO, the banking department, the Macro Economic Commission on Health and the health ministry, are endeavouring to devise mechanisms to cut down the cost of health insurance for low income families. These agencies are also evolving models that would ensure attractive returns to insurance firms. The government may even subsidise the insurance premium to encourage insurance companies.