Health Insurance Budget 2024-25: Coverage, Claims, and Costs Explained

On July 23, 2024, Finance Minister Nirmala Sitharaman announced her 7th Union Budget in Parliament for the financial year 2024-2025. The latest Union Budget announced key changes regarding tax reforms, education, employment generation, the healthcare sector, and more.

The announced budget is an action plan designed by the ruling Government of India for the development of India in the upcoming five years. To strengthen and reform the healthcare sector, a total of ₹90,958.63 crore has been allocated. The announcement of the Union Budget has received mixed reactions from the healthcare sector. Many leaders in health tech and medical tech companies believe it to be a mix of hits and misses.

In this article, we explore the key highlights of the Healthcare Budget 2024-25 and their impact on the common man.

Health Insurance Deduction Limits Increased Under 80D: Budget 2024-25

The insurance industry collectively recommended increasing the tax deduction limits for health insurance buyers. Deduction limits are currently capped at ₹25,000 for health premiums paid for self, spouse, and dependent family members, and ₹50,000 for health premiums paid for senior citizen health plans.

The recommendation is to elevate this limit to ₹50,000 for individuals, their spouses, and dependent children, and ₹1 lakh for senior citizens. This change will further encourage the Indian population to invest in health insurance, helping the government achieve its aim of 'Insurance for All by 2047'. Additionally, the reform aims to provide extensive coverage addressing consistently changing healthcare needs and help in fighting medical inflation.

Ayushman Bharat Pradhan Mantri – Jan Arogya Yojana (AB PM-JAY): Focus of Health Insurance Budget 2024-25

Ayushman Bharat Pradhan Mantri – Jan Arogya Yojana (AB PM-JAY), a flagship health insurance scheme by the Government of India, debuted in 2017. In the latest developments announced in the Union Budget 2024-25, the total health cover amount is to be increased to ₹10 Lakhs from the existing ₹5 Lakhs. FM Nirmala Sitharaman has announced an increase in allocation towards AB PM-JAY to ₹7,300 crore from ₹6,800 crore previously.

As of January 2024, AB PM-JAY has issued over 30 crore health cards across the country, with over 181 health cards issued every minute. As per data, Uttar Pradesh tops the list of states with the highest number of Ayushman cards issued (4.83 crore), followed by Madhya Pradesh and Maharashtra in 2nd and 3rd positions, respectively.

However, there is no increase in budget allocation for the Ayushman Bharat Digital Mission (ABDM), which remains at ₹200 crore.

Healthcare Sector Developments Under The Union Budget 2024-25

Focusing on India's healthcare sector, FM Nirmala Sitharaman made multiple key announcements in the 2024-25 Union Budget. The Indian Council of Medical Research (ICMR) budget allocation increased to ₹2,732.13 crore from ₹2,295.12 crore. Additionally, the National Health Mission received ₹36,000 crore.

Tele-MANAS, the government initiative providing free mental health services to the people of India, received a budget allocation of ₹90 crore, increasing from ₹65 crore in the last Union Budget. Globally renowned, the All India Institute of Medical Sciences (AIIMS), Delhi, received an increased budget from ₹4,278 crore to ₹4,523 crore.

A positive step was taken towards making cancer-treating drugs accessible to Indians. The Finance Minister announced a full exemption of customs duty on three key cancer drugs. The Union Budget also announced a slash in customs duty for X-ray tubes and digital detectors.

Wrapping It Up

The Union Budget 2024-25 was presented by the Finance Minister of India, Nirmala Sitharaman, with the vision of transforming India into 'Viksit Bharat' (Advanced India).

The budget emphasized inclusive development and prioritized nine key areas: Agriculture, Employment and Upskilling, Social Justice, Manufacturing, Urban Development, Energy, Infrastructure, Research & Development, and Next-Gen Reforms.

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