How Budget 2018 Can Help Make Optimum Use of Health Insurance?

The coming Union Budget 2018-19 holds many expectations and the India’s domestic economy is already going through the phase of the growth. In the last few years, the Indian government has already taken many growth initiatives and tough macroeconomic decisions that will be surely fruitful in the long term which includes implementation of the Goods and Service Tax(GST) and Real Estate Regulation Act (RERA) despite causing some temporary headwinds in the Indian economy. In this union budget, the Indian government is also looking for the welfare agenda and insurance is one of the important social welfare issues and should get the required boost in the upcoming budget. One of the major insurance sector is health insurance.

The common issue that most of the Indians face under health insurance is the rising health-care cost which makes it quite difficult for the people to get the quality and affordable treatments on time  The government can easily deal with this issue by making health insurance compulsory for employers in the organized and unorganized sector. Currently, in India, people have the  Employee’s State Insurance Scheme for the organized sector, however, it is limited to a certain section of employees. This helpful move will surely allow a much larger section to get access over quality healthcare on time that will surely reduce the  burden for medical expenses. The cost of the healthcare is rising at the rate of 15 percent year on year and this creates a lot of difficulty for everyone.

In case of need, or any medical emergency, most of the Indians rely on savings or borrow money from someone else. If government revised the tax benefit limit in the insurance sector, then more and more people would opt for health insurance in India.This move will encourage people a lot and help them in understanding the need of health insurance. There is a positive correlation between health insurance and a person’s life expectancy.  In this scenario, the proposed universal mass health insurance policy is definitely a welcome move and will be complementary to the Pradhan Mantri Suraksha Bima Yojana (PMSBY) especially for the underprivileged sections of the society.

Budget Expectations in Healthcare industry

  • Increase in the funds volume in the heath care sector
  • PPP model for universal health coverage that would help in boosting the health insurance sector
  • Government should consider to bring the heath insurance under the 5% GST bracket.
  • Should look for a provision to carry over the tax benefits over the course of time the health insurance cover is purchased for.
  • Allocate more funds to set up new medical colleges (graduate and post graduate)
  • New provision for non-communicable diseases which are accounted for 60% of the disease burden in the country.
  • Allocate more funds to set up primary health centres and equip them properly
  • A successful public private partnership model for diagnosis & treatment will be a major step in the direction of achieving the universal health coverage goal.
  • Encourage the establishment of manufacturing plants for medical electronics, consumables and implants
  • GST on medical devices should be reduced, give impetus to health insurance.
  • Put in place an enabling environment that will attract capital – both financial and intellectual
  • National Health Policy 2017 helped the larger strata of the Indian population- it should be expanded further.
  • Adoption of Public Private Partnership in the health care delivery market by incentivizing the private sector with structured tax benefits
  • Should find ways to cover the uncovered population under health insurance
  • Adoption of Universal Health Insurance and to incentivize consumers through higher tax deductions for healthcare expenditure and insurance payouts.
  • Allocate funds for early diagnosis.


Health insurance is the need of todays world where the healthcare cost is rising day by day. To deal with several unwanted medical emergencies, it is quite normal to invest in a health insurance but still on an average many people do not give much importance to it. However, with the new changes under health insurance, in Union Budget will encourage a lot of people to invest in it and can be a great tool from the personal finance view as well. The Union Budget of this year is holding many expectations as it comes after two very big financial decisions by Modi, in the last couple of years – Demonetisation and implementation of the Goods and Services Tax (GST).  It is also BJP government’s fifth and last budget presentation before the Lok Sabha polls in 2019.

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