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Last Updated : Feb 27, 2015 11:03 AM IST | Source: Moneycontrol.com

Union Budget 2015: More tax sops can promote healthcare, says Apollo Munich

Union budget should increase tax deduction provided under sec 80D for health insurance premium to Rs 30000 from Rs 15000. Tax deduction available for preventive health check up should go up to Rs 10000 from Rs 5000


Antony Jacob
Apollo Munich Health Insurance


The new Government pronounced great emphasis on covering every citizen with some form of health insurance coverage, when it was formed last year. We believe that this year’s Union Budget will mirror this sentiment and will be progressive and showcase Government’s push towards covering every Indian, while fuelling economic growth.


While health insurance is the second largest contributor to the non-life insurance business in India, its penetration still remains a challenge. According to industry estimates, 63 million people have been driven into poverty due to the high cost of healthcare. However, the situation is getting better with the increasing number of people accepting health insurance as a financial protection tool to meet and manage health spends.

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We believe our new government may take a few steps towards its vision of strengthening the health insurance sector.


Firstly, the Union Budget 2015 may stress on the need for public and private partnership in ensuring quality healthcare facilities and health insurance for all across the country. Expanding the public/government funded health insurance schemes to cover every Indian may be an important and essential step that the Finance Minister choose to address.


Secondly, the amount of tax deduction provided under Section 80D of The Income Tax Act for health insurance premium should be raised to Rs. 30,000 from the current provision of Rs. 15,000. This would go a long way in motivating people to consider higher sum insured policies and hedge against the spiraling medical cost. This may address the need for an adequate cover.


Thirdly, we also believe the new Government can encourage people to avail of health insurance, by increasing the tax rebate from Rs. 5,000 currently available for preventive checkups to at least Rs. 10,000 and make it additional to the rebate one gets for the health insurance premium paid. Statistics reveal that timely diagnosis of ailments helps people prevent excessive financial burden due to critical illnesses and hospitalization. This would also incentivize more people to undergo preventive health check-ups on a regular basis and hence provide the basis of health insurance purchase decisions.


Item number four on our wish list is related to the service tax that people pay while buying a health cover. We would request that the Finance Minister remove this taxation under the Union Budget 2015, for enhancing affordability of health insurance among all and in turn increase penetration.

Last but not least, as health insurance awareness is one of the key problems in increasing penetration across the country, we wish that the Government would build a budget for marketing programs, which would enhance the need for Indians to get covered under health plans. This initiative found immense favour last year with IRDA and the insurance council with support from all the insurance companies. A budgetary allocation this year would make it far more effective and efficient.

First Published on Feb 26, 2015 07:37 pm
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