The Insurance Regulatory and Development Authority of India (IRDAI) has issued a transformative directive requiring all health insurance companies to provide cashless claim settlement at any hospital in India, irrespective of whether the hospital is part of the insurer's existing network. The "Cashless Everywhere" mandate takes effect from 1 April 2026 and is expected to fundamentally reshape the health insurance claims experience.
What Changes for Policyholders
Currently, cashless claim settlement is available only at network hospitals that have a pre-negotiated agreement with your insurer. If you are hospitalised at a non-network hospital, you must pay the entire bill upfront and file a reimbursement claim later, a process that can take 15-30 days. Under the new mandate, policyholders can avail cashless treatment at any NABH-accredited hospital and any hospital registered with the state health authority.
The directive requires insurers to process cashless authorisation requests within 1 hour for planned hospitalisations and 30 minutes for emergency admissions. Failure to respond within these timelines will result in automatic deemed approval, meaning the insurer must honour the claim.
How Insurers Are Preparing
Major health insurers have expressed cautious optimism about the directive. Star Health, Niva Bupa, and HDFC ERGO have announced investments in expanding their claims processing infrastructure, including AI-powered claim adjudication systems that can handle the expected surge in cashless requests. Smaller insurers, however, have flagged concerns about fraud risk and the operational challenge of processing cashless claims at unfamiliar hospitals.
IRDAI has addressed these concerns by mandating a standardised digital claim submission protocol that all hospitals must follow. The regulator is also establishing a centralized hospital information repository to reduce verification delays.
Impact on Premiums
Industry analysts expect a modest premium increase of 3-5% as insurers absorb the higher operational costs and potentially higher claim payouts that come with universal cashless access. However, IRDAI has specified that any premium increase attributable to this mandate must be separately disclosed and approved, preventing insurers from using the directive as cover for disproportionate price hikes.
For policyholders, the convenience benefit far outweighs the marginal premium increase. The directive effectively eliminates one of the biggest pain points in Indian health insurance and brings the industry closer to global standards of policyholder service.
Source
IRDAI Circular IRDAI/HLT/CIR/MISC/038/02/2026