By Prasun Sikdar
Indian Union Budget 2021-22: Given the gravity of this whole Covid-19 pandemic situation, there has been an increased awareness of the importance of health insurance and the state of Consumers’ minds have undergone a tectonic shift from seeing health insurance as a priority seeing it as a necessity. Whether it is government, bureaucracy, industry, media, or the common man, we are all now discussing protecting lives and funding the same in the form of insurance. disease. Thus, in the next Union budget 2021, we expect the Minister of Finance Nirmala Sitharaman to announce various measures for the health insurance sector.
Reduce the GST rate on insurance
In the hierarchy of needs, health is today “a priority” and health insurance is more relevant than ever. Health insurance has become a staple commodity and must be included in the 5% GST tax slab with products such as food items to make people’s access to quality health care more affordable.
It is here that reducing the GST rate from 18% to 5% on health insurance premiums will be a huge respite, especially for older people who are struggling to cope with the rising costs of health care. health. Currently, on most insurance products, GST is 18%, bringing the premium to 118% for the end user. The abolition or at least a substantial reduction in the GST on all personal product lines, from 18% to 5%, will encourage more people to purchase health insurance.
Increase in the tax deduction ceiling
In addition, increasing the tax deduction limit provided for in Article 80D of the Income Tax Act may contribute to better penetration of health insurance. Currently, under section 80D, a person can claim up to Rs 25,000 deduction for himself and his family. This limit should be increased. It is a fact that a serious illness in the family can drain all savings and push the family into the debt trap. Therefore, adequate health insurance coverage and the right health insurance product are a necessity.
There has also been an extraordinary increase in the incidence of serious illnesses in the country, where the cost of treating such illnesses is a curse for people living in the low and middle income group. This certainly calls for a higher tax deduction limit for health insurance plans.
Particular attention should be paid to easier access to health care financing in terms of accessibility, predictability and simplicity. In recent times, national and state government bodies are making targeted efforts to improve the health care scenario. In addition, the Insurance Regulatory and Development Authority of India (IRDAI), in its continued efforts to standardize health insurance products, has rolled out affordable standardized health insurance products such as Arogya Health Insurance Plans Sanjeevani, Corona Kavach and Corona Rakshak. This has resulted in a great awareness of health insurance and the government should continue to take specific measures to increase literacy in health insurance.
Access to health insurance can help more people to integrate into the health system and receive quality treatment. Lack of health insurance can make it difficult for patients to get the health care they need and when they do get it puts huge medical bills on them. We expect the government to announce effective measures in the Union
Budget for better access to health insurance.
The government must propose several changes in the regulatory framework to ensure that the majority of the population falls under insurance. The Covid-19 pandemic has exposed the serious gap between the imbalances between supply and demand, it is a persistent problem that must be resolved with a structural course of action. We hope that the next budget will propose a series of measures to boost this sector. The health sector must be supported and encouraged to develop and prosper so that it can make a real difference in the economy and employment of the country.
The author is Managing Director and CEO, ManipalCigna Health Insurance