It is expected that the government in the upcoming budget comes up with a series of measures to boost this sector, thus considering 5% GST tax slab on health insurance premium to make it more affordable for the people living in the middle-income group to get access to quality healthcare care they need

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

Srikanth Kandikonda 

It is no secret that health is instrumental to an individual’s education, income and overall development. Studies show this is true for countries as well; the level of education and the health of the people can be a causative factor for the aggregate economic growth of a country.

Thus, in the upcoming Budget 2023, we do expect the Finance Minister to announce various measures for the health insurance sector. Access to health insurance can help more people get quality treatment and reduce the burden of out-of-pocket healthcare expenses.

We expect that the government in the upcoming budget comes up with a series of measures to boost this sector, thus considering 5% GST tax slab on health insurance premium to make it more affordable for the people living in the middle-income group to get access to quality healthcare care they need.

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 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.

The author is CFO, ManipalCigna Health Insurance