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Last Updated : Jan 20, 2017 12:58 PM IST | Source: Moneycontrol.com

Budget 2017: Insurers seek a bigger push for health plans

Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance said that the government should make it mandatory for employers, both in the organised and unorganised sectors to provide health cover to all their employees.

M Saraswathy

In a move to promote health insurance plans in India, general insurance companies have sought addditional emphasis to be given to medical cover in the upcoming Union Budget 2017.

Along with tax incentives for heath insurance, insurers are keen to have it integrated as a key component of employers' offering.

Tapan Singhel, MD and CEO of Bajaj Allianz General Insurance, said that the government should make it imperative for employers, both in the organised and unorganised sectors to provide health cover to all their employees.

He explained that certain developed countries such as the United States, the UK and France have this regulation in place which ensures that a significant population comes under the ambit of health cover.

While Employees' State Insurance scheme exists in India for the organised sector, Singhel said that it remains limited to a certain section of employees.

Overall, there has been an increase in the health insurance purchases. A survey by ICICI Lombard said that customers are now opting for reinstatement of 100 percent sum insured after exhaustion and there is an increasing adoption of super top-up plans and high-sum insured options.

Although Rashtriya Swasthya Bima Yojana (RSBY) targets low income households, it is not considered mandatory to buy this health insurance product which offers a cover of Rs 30,000 at meagre premiums of Rs 30.

V Jagannathan, Chairman and Managing Director, Star Health Insurance, explained that the full rebate should be given especially for the younger population with respect to Section 80D which deals with tax deductions on medical insurance.

“If youngsters are given tax sops, this will motivate them to buy these products at an earlier stage,” he said. Further, Jagannathan added that there should not be a provision of service tax for this insurance.

Hospital bills have been going through the roof. With absence of a health regulator, hospitals do not have any regulations that mandate them to cap their charges. In several hospitals, patients with a health insurance policy are charged more, on the pretext that the insurer will reimburse them later.

Companies are now asking for regularizing the rates charged by hospitals. Jagannathan said that the Budget could announce some tax benefits for hospitals that make complete disclosures on room rent, implants and other charges. This is because hospitals have been found charging almost 3-4X of the actual price of the implant during medical procedures.

The ICICI Lombard annual survey had said that compounded inflation (for health) is maximum at 11 percent for general signs and symptoms followed by digestive disorders at 8 percent.

Further, insurers are also betting on more benefits to the salaried class so that they purchase a health insurance policy.

M Ravichandran, President-Insurance, Tata AIG General Insurance said that with respect to health insurance, more can be done for the salaried class.

“Currently, if one purchases a health insurance policy for self/spouse/children, he/she can claim a tax deduction of up to Rs 25,000. When one purchases a health insurance policy for parents (a senior citizen), he/she is eligible for an additional tax deduction benefit up to Rs 30,000. Given the rising costs on medical expenditures, it would be even more beneficial if they could provide further tax benefits under 80 D,” he said.

It is anticipated that senior citizens could be given some special tax rebates for health insurance purchase, especially since that they are at a higher risk of contracting illnesses at that age. The insurance regulator has also discouraged the practice of insurers rejecting proposals of health insurance of senior citizens.
First Published on Jan 18, 2017 03:08 pm