Indian Union Budget 2021: Given the severity of the entire Covid-19 pandemic, there has been a growing awareness of the importance of health insurance and the consumer mindset has undergone a drastic shift from viewing health insurance as a priority to see it as a necessity. Whether it is the government, the bureaucracy, industry, the media, or the common man, we are all now discussing the protection of life and its financing in the form of health insurance. Therefore, in the next Union budget 2021, we expect Finance Minister Nirmala Sitharaman to announce various measures for the health insurance sector.
Reduce the GST rate on insurance
In the hierarchy of needs, health today is a "priority of the mind" and health insurance is more important than ever. Health insurance has become a commodity and must be included in the 5% GST along with goods such as food so that people can get quality health care at an affordable price.
In this case, reducing the GST rate from 18% to 5% on health insurance premiums would be a huge respite, especially for seniors struggling to cover rising health care costs. Today, on most insurance products, the GST is 18%, which pays the premium at 118% to the end user. Eliminating or drastically reducing the GST on all product lines, from the current 18% to the current 5%, will encourage more people to buy health insurance.
Increase the tax deduction limit
Also, an increase in the tax deduction limit in Section 80d of the Income Tax Act could help better penetration of health insurance. Currently, under Section 80D, a person can claim up to 25,000 rupees for himself and his family. This limit should be increased. It is a fact that a serious illness in a family can deplete all savings and can push a family into a debt trap. Therefore, adequate health insurance coverage and a suitable health insurance product are essential.
There has also been an extraordinary increase in the incidence of serious diseases in the country, where the cost of treating these diseases is a curse for people living in the low and middle income group. This definitely requires a higher tax deduction limit for health insurance plans.
Special emphasis should be placed on accessibility to healthcare financing in terms of affordability, predictability and simplicity. Recently, government agencies at the state and state level are making specific efforts to improve the healthcare landscape. In its ongoing efforts to further standardize health insurance products, the Insurance Regulatory and Development Authority of India (IRDAI) has launched affordable standard health insurance products such as Arogya Sanjeevani, Corona Kavach and Corona Rakshak health insurance plans. This has increased awareness of health insurance and the government should continue to take specific steps to increase awareness of health insurance.
Access to health insurance can help more people become part of the health care system and get quality treatment. Lack of health insurance can make it difficult for patients to get the medical care they need, and when they do get it, they face huge medical bills. We hope that the government announces effective measures in the union
Budget to increase access to health insurance.
The government needs to make many changes to the regulatory framework to ensure that the majority of the population is under the insurance coverage. The Covid-19 pandemic has revealed a dangerous gap between supply and demand imbalances, and this is an unresolved issue that must be addressed through a structural course of action. We hope that the next budget will come with a series of measures to boost this sector. The health sector must be supported and encouraged to expand and prosper in order to make a real difference to the country's economy and employment.
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