Effect of the Union Budget on Health Insurance Schemes 2016

The Union Budget 2016 demonstrates a sharpened Government focus on indispensable social spending like healthcare and education to enhance people’s quality of life, especially those belonging to lower income groups. The announcements towards the insurance sector, in particular, are expected to offer more options to insurance buyers in the country.

Read More

Policybazaar exclusive benefits
  • 30 minutes claim support*
  • 50,000 claims approved in last 15 months*
  • Schedule home visit with our advisors
  • Get a plan based on your medical needs

*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

*Tax benefit is subject to changes in tax laws. Standard T&C Apply

Back
All health plans cover Covid-19 treatment
  • 1
  • 2
  • 3
  • 4

Who would you like to insure?

  • Previous step
    Continue
    By clicking on “CONTINUE”, you agree to our Privacy Policy and Terms of use
    Previous step
    Continue

      Popular Cities

      Previous step
      Continue
      Previous step
      Continue

      Do you have an existing illness or medical history?

      This helps us find plans that cover your condition and avoid claim rejection

      Get updates on WhatsApp

      What is your existing illness?

      Select all that apply

      Previous step

      When did you recover from Covid-19?

      Some plans are available only after a certain time

      Previous step

      There was a pressing demand by the insurance sector to eliminate the service tax on the insurance products. Honorable finance minister, Mr. Arun Jaitley did lend an ear to this demand, albeit partially. Effective April 1, 2016, service tax will be exempt on services of the general insurance business under the Niramaya Health Insurance Scheme.

       

      A cut in the service tax on the insurance policies also leads to a reduction in the policy premiums making them more affordable.

      Union Budget Health Insurance Schemes Good for Senior Citizens

      Particularly for senior citizens, health insurance costs are skyrocketing and so are the premiums for health cover, since the associated risks are high as well.

      In an attempt to make life easier for senior citizens, the Government has proposed a special health insurance scheme, which will be administered by the Department of Financial Services under the Finance Ministry.

      In his budget speech on February 29, 2016, Finance Minister, Mr Arun Jaitley said, “Catastrophic health events are the single most important cause of unforeseen out-of-pocket expenditure which pushes lakhs of households below the poverty line every year. Serious illness of family members causes severe stress on the financial circumstances of poor and economically weak families, shaking the foundation of their economic security. In order to help such families, the government will launch a new health protection scheme, which will provide health cover up to INR 1 lakh per family. For senior citizens, an additional top-up package up to INR 30,000 will be provided.”

      This health care scheme will be linked to the beneficiaries’ bank accounts to facilitate direct transfers of the subsidised amounts to the respective accounts. As per the proposal, the Government will subsidise the premium even further for those below the poverty line, by up to 90% via cash transfers directly into their bank accounts.

      Union Budget Schemes 2016

      The Pradhan Mantri Suraksha Bima Yojana gives a renewable cover of one year accidental death/disability to the extent of INR 200,000/- for partial or permanent disability. This is offered to all savings bank account holders in the 18-70 years age group for a mere Rs.12 premium per subscriber, per annum. 

      Read more about Pradhan Mantri Suraksha Bima Yojana

      There is also the Atal Pension Yojana and low-premium life insurance scheme called the Pradhan Mantri Jeevan Jyoti Bima Yojana for the welfare of senior citizens.

      Presently in India, the Rashtriya Swasthya Bima Yojana (RSBY) offers health insurance coverage to Below Poverty Line families. Beneficiaries can avail hospitalisation coverage up to INR 30,000, and this coverage extends to five family members—head of the family, spouse and a maximum of three dependents. Beneficiaries need to pay a minimal registration fee of Rs.30 under this national health insurance scheme, while State and Central governments pay the premium to the insurer.

      Read More- Health Insurance Schemes for Senior Citizens 

      Hike in Budget Allocation towards Healthcare, Launch of National Dialysis Programme

      There is a hike in the budget allocation for the health ministry – up from INR 33,765 crore in 2015-16 to INR 38,892 crore, a little less than the INR 40,000 crore demanded by the ministry. The break-up is INR 19,037 crore towards National Health Mission, INR 16,555 crore towards health, INR 1,800 crore towards health research, and INR 1,500 crore for RSBY.

      Mr. Jaitley also unveiled a new health protection scheme, in addition to the health insurance scheme, with universal coverage—a National Dialysis service programme. This is a crucial step in our country, which sees a high incidence of hypertension and diabetes, both of which affect the kidneys. This certainly is a welcome move by the Indian finance ministry.

      As per the figures presented by Mr Jaitley, India sees almost 2.2 lakh new patients of End-Stage Renal Disease annually, which leads to an additional demand for around 3.4 crore dialysis sessions. Currently, there are approximately 4,950 dialysis centres in India, most of them in urban areas and in the private sector.

      Mr. Jaitley announced, “Every dialysis session costs about INR 2,000—an annual expenditure of more than INR 3 lakh. Besides, most families have to undertake frequent trips, often over long distances, to access dialysis services, incurring heavy travel costs and loss of wages. To address this, I propose to start a ‘National Dialysis Services Programme’. Funds will be made available through PPP mode under the National Health Mission, to provide dialysis services in all district hospitals. To reduce the cost, I propose to exempt certain parts of dialysis equipment from basic customs duty, excise/CVD and SAD.”

      Professor of Nephrology at PGIMER, Chandigarh, Dr Vivekananda Jha, commented, “Provision of dialysis has long been a benchmark for willingness of governments around the world to provide healthcare to its populations. Lessons learnt from implementation in other countries should be used to develop replicable schemes for delivery of good quality dialysis in an ethical manner. This should be supported by a quality assurance system to be developed in consultation with professional societies and national and international organizations. Quality should not be sacrificed at the altar of cost.”

      However, these new health insurance schemes will pose a challenge to Private Insurance companies. It will be interesting to see how private companies plan to tackle the challenge posed to them by the Indian government’s latest schemes.

      Disclaimer : *Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer. 

      Search
      Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

      Health insurance articles

      Recent Articles
      Popular Articles
      Monkeypox: Dos and Don’ts of the Disease That You Should Know

      15 Sep 2022

      Monkeypox has slowly and steadily spread to more than 85 countries...
      Read more
      Why is It Important to Disclose Pre-existing Diseases to Your Insurer?

      06 Sep 2022

      As we grow old, the chances of developing a disease or a medical...
      Read more
      Benefits of Multi-Year Health Insurance Plans

      25 Aug 2022

      Ever since COVID-19 entered our lives, health insurance has come...
      Read more
      Does Health Insurance Cover Monkeypox?

      25 Jul 2022

      Monkeypox is the latest disease to make its way to India while we...
      Read more
      List of Diseases Covered by Bajaj Allianz Health Insurance Plans

      05 Jul 2022

      Barely any person has remained unaffected due to rising health...
      Read more
      PMJAY Scheme: Ayushman Bharat Yojana Eligibility & Registration Online
      Prime Minister Shri Narendra Modi announced the launch of (PMJAY) Ayushman Bharat Yojana in his Independence...
      Read more
      Best Health Insurance Plans in India 2022
      Finding the best health insurance plan from so many different health insurance companies can get confusing for many...
      Read more
      How to Apply for Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PM-JAY)?
      Ayushman Bharat Yojana is a flagship health insurance scheme launched by the Government of India to offer universal...
      Read more
      Best Maternity Insurance Plans
      Maternity insurance offers comprehensive coverage for medical expenses incurred during pregnancy, including the cost...
      Read more
      Best Health Insurance Plans for Senior Citizens in 2022
      Senior citizens are the most prone to diseases. Considering the medical inflation in India, buying health insurance...
      Read more

      top
      Close
      Download the Policybazaar app
      to manage all your insurance needs.
      INSTALL