Hike in tax sops for health insurance premium sought in Budget 2020
We hope the government will use Budget 2020 to incentivise health insurance buyers to create better insurance awareness and deeper penetration.
Here are a few things that we would like for the insurance sector from the Union Budget 2020.
Increase in income tax exemption on health insurance premium
Under section 80D of the Income-tax Act, 1961, Rs 25,000 to Rs 50,000 paid as premium for health insurance for self, spouse and dependent children is deductible
from gross total income (effectively tax-exempt). If health insurance premium is also paid for parents who are less than 60 years old, then an additional Rs 25,000 can be claimed as a deduction. If the parents are senior citizens, then an additional deduction of Rs 50,000 can be claimed for the premium paid for them.
With the rise in healthcare costs, we recommend that these limits be further increased by 20% for self and dependent parents, each. This will provide a huge relief in terms of disposable income and help increase the penetration of health insurance.
Standardisation of healthcare expenses
Healthcare inflation in India is between 14% and 16%. To make healthcare affordable for the masses the government should think of innovative ways to standardise the cost of healthcare keeping in mind the expensive treatments such as cancer, heart diseases etc. One way of doing this is to mandate hospitals and doctors to record in a central platform the results of various medicines and procedures. The value of higher prices of the medicines and procedures can then be properly assessed across facilities.
This will significantly help us in not only improving the quality of healthcare, standardising it in India but also help reduce the health insurance premiums and thereby improving health insurance penetration