13Feb

Union Budget 2015 India Expectation: More tax benefits on health insurance required

As this budget would be the first full-fledged budget by the Finance Minister, expectations across industries are quite high. Last year’s budget was progressive and forward looking and clearly exhibits the new government’s understanding of the impending needs to fuel economic growth through righteous allocation of funds and impetus to foreign investment. Key thrust on improving the rural economy with focus on development programmes, FDI hike, enhancement of quality healthcare rounded up as an ideal budget.

This year, a growth-oriented budget, with a focus on health assurance and an overall increase in financial inclusion and consumer awareness are the wish list from this years’ union budget.

Health Insurance being a relatively new idea is evolving and must innovatively and creatively face the challenges of lack of access and affordability, health/medical inflation, unavailability of skilled manpower among other barriers and roadblocks.It is therefore, every Indian’s need to have access to an all-inclusive and quality healthcare system. Innovations across all touch points will be harbinger of growth and will help us accomplish our mission of getting to universal health insurance coverage in India.

The growing awareness coupled with the rising affluence is resulting in an increased demand for health insurance in the country. For consumers, exemption of service tax from Health Insurance premium and increasing the tax exemption slab for premium paid will be a stimulus to the industry’s growth. Forthcoming budget should take small steps such as removing service tax on health insurance premium, increasing deduction limit under section 80D to increase penetration of insurance.Health insurance is still looked upon only as a secondary option to other investments by most consumers because of lack of awareness, lower tax exemption or as a stress purchase. Therefore tax benefits on healthcare insurance would help nurture a culture of preventive healthcare in India. However, affordability and awareness still plagues our growth.

India’s current healthcare system is one of the most privatized globally, with the private sector providing eighty percent of outpatient care, resulting in catastrophic out of pocket expenses for people with a low income.People need to understand that with inflation in healthcare costs and increase in the incidence of lifestyle diseases, health insurance will be beneficial in covering the treatment cost. All this will ultimately free the current out-of-pocket spending and channel funds toward far more productive uses, while strengthening the public health-care system.

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