With the Union Budget 2024 around the corner, health insurers are amplifying their demand for policy reforms aimed at strengthening the healthcare sector. A major expectation is the better implementation and uniformity of the Universal Health Scheme across states.
“The Universal Health Scheme requires greater participation of multi-speciality and corporate hospitals, and improved reach to the deserving BPL population,” said Dr. S Prakash, MD & CEO Designate of Galaxy Health Insurance Company Limited.
He emphasized the need for a dedicated health regulator to standardize procedures and address unethical practices in hospitals. “A health regulator can create effective packages based on the location and expertise available in hospitals, which can boost public confidence and improve financial transactions between insurers and hospitals,” he added.
Reduce GST on Health Insurance
Another significant demand from the industry is the reduction of GST on health insurance policies. “Lowering the GST rate from 18% to 12%, and waiving it for senior citizens, physically disabled individuals, and other disease-specific categories would provide much-needed relief,” Prakash stated.
This sentiment was echoed by Prasun Sikdar, MD & CEO of ManipalCigna Health Insurance, who underscored the importance of making healthcare more affordable for the middle-income and senior citizen segments.
“Reducing out-of-pocket expenses is critical. Private health insurance is vital in bridging the protection gap,” Sikdar noted, pointing out that the National Health Policy aims to increase public expenditure on healthcare to 2.5% of GDP by 2025, a target that requires a substantial boost in Budget allocation.
Give Personal Tax Relief
Additionally, the industry is pushing for extending 80-D (premium paid under medical insurance) deductions under the New Tax Regime, similar to the Old Tax Regime. “Raising the 80-D limit to Rs 50,000 for self, spouse, and children, and Rs 1 lakh for senior citizens would significantly help in making healthcare more accessible,” Prakash suggested. Including personal accident cover under the 80-D limit is another recommendation.
Addressing Systemic Challenges
These demands come at a time when the GST Council has also recommended favorable measures for the insurance sector to the government. The health insurance industry’s push for GST relief and regulatory reforms highlights the urgent need for policy changes to enhance healthcare accessibility and affordability for all segments of society.
The upcoming Budget is expected to be crucial in addressing these long-standing demands and bringing about transformative changes in the health insurance landscape, which could ultimately benefit millions of Indians.
The health insurance sector faces several challenges, including complex and inconsistent regulations, insufficient funding, and lack of standardization. Government schemes like Ayushman Bharat and Arogya Yojana struggle with poor integration with private insurers, low awareness, inadequate healthcare infrastructure, fraud and abuse, and quality of care issues.
Addressing these requires streamlined regulations, increased and efficient fund allocation, better integration of government and private efforts, and enhanced use of technology in claim auto adjudication and fraud prevention. Additionally, improving risk pooling and data management across the industry is essential to enhance healthcare access and outcomes for all citizens.
The health insurance sector requires improved risk pooling and data management to enhance healthcare access and outcomes. Leveraging technology for claim auto-adjudication and fraud prevention is crucialAvdhesh Sharma, India President, Vitraya Technologies, commented.
These insights reflect the industry’s urgent call for strategic reforms in the upcoming Union Budget 2024 to ensure a robust and equitable healthcare system in India.
