Expectations and Hopes: A look at the next Union Budget 2023 for health insurance
By - Vivek Barchha
When it comes to the union budget of India, the health insurance industry has long been neglected. It hasn't been clear how much the government has announced for the industry to satisfy and please the insurers. The need to persuade the Indian populace to get health insurance has never been greater, and it is crucial that this goal is achieved. Easy access to healthcare finance that is affordable, predictable, and simple should receive special attention.
With a penetration rate of less than 5% nationwide, the health insurance sector anticipates potentially significant budgetary changes in 2023. According to several tax experts, the sector is expected to propose raising the FDI cap to 100%. By reducing the GST rate on the purchase of health insurance, the centre can also provide some help to the upcoming insureds. In addition, the increased tax exemption under Section 80D from the present cap of Rs. 25000 to at least Rs. 1 lakh would be considered in the future budget.
The centre has been advised by many experts to allocate more money for healthcare. According to a study, medical expenses lead an estimated 7% of the population to fall below the poverty line, increasing the government's health spending as a proportion of GDP.
This brings up a crucial topic: India has the greatest rate of medical inflation among Asian nations, hovering at about 14%. It should be noted that among its western equivalents, India's healthcare budget is the smallest.
The Indian industry requests that the increased Section 80D tax exemption, from the existing maximum of 25,000 to at least 1 lakh, be included in the future budget. Customers would be encouraged to choose health insurance through this tax incentive. The affordability of this exemption increase will also improve. Given its poor health, India urgently needs widespread insurance coverage, since medical inflation has driven costs to unaffordable levels.
Lowering of GST
It is also expected that the GT rate on health insurance will decrease from 18% to 5%, as doing so will encourage customers to purchase health insurance. This would account for the GST fees for room rentals beyond 5,000 since these fees also raise the price.
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