In a move that is expected to encourage the “aam aadmi” to buy more health insurance products and cushion them from rising medical costs in the country, the budget has proposed to raise the tax deduction limit under Section 80D from Rs 15,000 to Rs 25,000. For senior citizens, it would be Rs 30,000 from Rs 20,000.
Besides, finance minister Arun Jaitley said that for very senior citizens aged 80 years or above, who are not covered by health insurance scheme, a deduction of Rs 30,000 will be provided for treatment expenses.
The finance minister said the focus in this budget has been on social security, which includes insurance and pension. “The fifth pillar of my taxation proposals this year is extension of benefits to middle class tax payers.”
“With respect to the insurance sector, the increase in exemption of health insurance is a welcome move. Also, multiple initiatives have been taken towards providing social security by means of introducing life and accidental insurance and pension schemes for financially weaker section,” said Rajesh Sud, CEO & managing director, Max Life Insurance.
Health insurance penetration in India is about 5%. In the urban areas, it is about 13-14%.
“We welcome the government’s move to increase health insurance cover, this will enable people to seek out for quality healthcare,” said Ajay Bakshi, MD and CEO, Manipal Health Enterprise.
Others also welcomed the move to boost health insurance.
“At present, over 78-80% of health care expenses are funded by the Indians out of their own pocket and this move will encourage people to increase their coverage keeping in the mind the rising cost of healthcare,” said Tarun Chugh, MD & CEO, PNB MetLife.