Regulatory Backing Required to Widen the Reach of Health Insurance

Health insurance being the most imperative thing needs to be made more accessible and affordable for all. While health insurance is the second largest contributor to the non-life insurance business in India, its reach still remains a challenge. ‘Out-of-pocket’ expenditure on healthcare continues to be a reason behind excessive poverty in India. As per the data from World Bank, 8 crore people are forced below the poverty line every year due to high medical expenses.

Innovation, undoubtedly, is allowing medical technology to progress but is also contributing hugely to Medical inflation. All the efforts therefore must be centered towards making healthcare affordable for all. Health insurance is definitely the best solution to the ever rising medical expenses and we have to work towards expanding it across the nation.

From the government, support is required from the regulation front to offer the much-needed thrust to health insurance initiatives. Firstly, there must be a rise in the tax exemption limit under Section 80D from Rs.15,000 to Rs.25,000 for individuals and an additional R25,000 for parents (R30,000 for parents who are senior citizens). This would be helpful to the citizens as it would help them in choosing the right sum assured.

Families would never run out of financial means to check on their present health status and because of health insurance their ability to take timely precautionary measures would enhance. Such efforts would enable healthy living for all Indians.

Secondly, the previous government's initiative to bring in OPD and preventive health checks under the ambit of Section 80D of The Income Tax Act was highly appreciated. It is expected from the new government that they encourage people more with added tax incentives.

The current tax rebate of R5,000 available for preventive checkups is part of the health insurance exemption limit under Section 80D of IT Act. It is asked of the ruling government to hike the limit to a minimum of R10,000 and make it additional to the rebate one receives for the health insurance premium paid. Periodic diagnosis of ailments would go a long way in preventing people from facing a financial burden due to critical illnesses and hospitalisation.

Thirdly, people are liable to pay for service tax when buying a health cover. This be looked into and the taxation must be removed as health insurance reach needs to increase considerably and quickly. This would surely make health insurance more accessible and affordable for the people of India.

Fourthly, lack of health insurance awareness is one of the major issues that is standing in the way of increasing penetration across the country. The government might want to build a budget for marketing programmes, which would increase the need for Indians to get covered under health plans.

A budgetary allocation this year would make the initiative lot more effective and efficient.

Lastly, eyes are at the long-pending Insurance Laws (Amendment) Bill, 2008, this year, as the latter might enable an increase in foreign direct investment (FDI) in Indian insurance companies from the current cap of 26%. Pushing the insurance sector towards FDI investment will increase the inflow of expertise from international insurance companies in terms of processes and data analysis.