As the government prepares for the Union Budget 2025, the insurance industry is calling for specific measures to enhance affordability and deepen health insurance penetration. The leaders of the industry have provided solutions like a reduction in GST on health premiums, changes in tax exemptions under Section 80D, and creating an independent health authority to control the increasing medical costs.
Currently, health insurance in India is still very low, and the increasing costs of healthcare make the service very expensive. Tapan Singhel, MD & CEO of Bajaj Allianz General Insurance, for example, has called for aggressive policy measures, as has Srinivasan Gopalan, MD & CEO of Galaxy Health Insurance Company. These changes are intended to protect the “missing middle”—an area of the population that is most at risk because of insufficient insurance.
Singhel supported insurance by encouraging people to consider it as a basic need rather than a want. He said high GST rates on insurance premiums discourage many from getting the necessary coverage.
The sector is lobbying for the GST rate on health insurance premiums, which is pegged at 18%, to be slashed. This rate could be reduced to make policies cheaper and thus available to many people in the population.
“If a GST cut is not possible, other options the government should explore include Section 80D of the Income Tax Act, which allows businesses to deduct the entire amount paid for medical insurance.” These changes could stimulate greater usage without much effect on the government’s income.
Srinivasan Gopalan also moved to amend Rule 6E, which concerns unexpired premium reserves. He proposed using the 1/365 approach in determining reserves, as per the IRDAI financial reporting standards for insurance firms.
To promote financial protection, Singhel suggested providing 100% tax exemptions for premiums paid on various protection-oriented products, including:
“These measures would encourage people to spend on personal protection and, in the process, increase insurance penetration as well as financial depth,” he pointed out.
One major expectation from the sector is the innovation of a health regulator to effectively tackle issues, including medical inflation and the variation in hospital pricing. Increasing costs related to healthcare have remained the most significant threat to insurers due to hospitalisation costs, which have kept insurers struggling to balance the pricing of their products because adjustments are only done once in three years.
“Creation of a regulatory body to manage hospitals would make prices and quality of services more uniform and affordable for all people,” Singhel added. Stakeholders’ consultations between the NHA, IRDAI, and others are being held regarding this matter, and people are expecting a positive result soon.
Medical inflation has been a key issue, with costs sometimes rising by up to 15% during a three-year pricing cycle. These inflations have cost implications for both policyholders and insurers. A health regulator could fill the gap by putting through fair tariffs and ensuring proper mediation for medical treatment.
Paybima Team
Paybima is an Indian insurance aggregator on a mission to make insurance simple for people. Paybima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 21 years of experience. Paybima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
.jpg)
Having a bike is not just about convenience, it’s a huge responsibility. Financial protection of your two-wheeler is important and the best way to ensure that is to have a bike insurance policy that will protect you in case of an accident, theft or a natural calamity. There are so many options when it comes to policies, making it difficult to know what’s best. This guide makes it easier to choose the best bike insurance policy that is suitable for you.
Non-linked, non-participating term plans are the ones that do not participate in the business and profit of the insurance company. These are fixed premium plans where the policyholder pays a fixed amount to ascertain a guaranteed sum as a return to be paid to the nominee in case of his/ her demise. Let’s learn more in this post.
Car depreciation implies the difference between the cost of a car at the time of buying the car and when you sell it. A car insurance claim amount is determined by the car depreciation rate. The car depreciation rate is the reduction in the value of your car over its lifespan caused by wear and tear.
Have you ever caught yourself lost in illusions about your daughter's future events, such as her university convocation and first day at work? Her university convocation. When she embarks upon her initial job after graduation will be the day.
.png)
Accidents can happen anywhere, anytime, by your own fault or another person. What’s important is to be prepared for such mishaps. This is where Own Damage Car Insurance comes in handy.
By clicking the button, I authorize Paybima advisor to contact me via SMS, Email, Phone, WhatsApp or any other modes overriding my 'DND'.T&C Apply.
By clicking the button, I authorize Paybima advisor to contact me via SMS, Email, Phone, WhatsApp or any other modes overriding my 'DND'.T&C Apply.
