“Health insurance penetration in India is abysmally low, and what cannot be glossed over is that every year millions of people in  our country are pushed below the poverty line because of the burden of out-of-pocket healthcare expenses.

Access to health insurance can help more people become part of the health care system and get quality treatment. Thus, we are hopeful in the upcoming Union budget 2022-23 the government looks at considering 5% GST tax slab on health insurance premium along with commodities such as food items to make it more affordable for the people living in the middle-income group to get access to quality healthcare care they need. As people age, many elders may need to cope with some or the other health conditions and would need protection against any untoward hospitalization expenses on account of large number of diseases including critical illnesses. Here’s where, GST rate cut from 18% to 5% on the health insurance premiums will be a huge respite especially for senior citizens who are struggling to meet the rising healthcare costs.  At present, on most insurance products the GST is 18% which thrusts the premium to 118% for the end-user. The abolition or at least a sizeable reduction in the GST on all personal lines of products – from the existing 18% to 5% will encourage more people to buy health insurance.

Further, the increase in the limit of tax deduction in 80D can help boost the overall health insurance penetration in the country. Currently, under 80D, an individual can claim up to Rs.25000 deduction for self and family, this limit should be increased substantially. It is a fact that one major illness in the family can drain entire savings, and can push the family into a debt trap. Thus, in today’s world of growing medical inflation, lifestyle disease and also infectious diseases like Covid, having a comprehensive and high sum insured health insurance policy has become a necessity to access quality treatment without worrying about medical expenses. Therefore, in the budget ahead we expect the government to announce initiatives to increase the limit for health cover under section 80D and GST rate cut, to help millions of people access quality healthcare at an affordable cost.”