To ease the financial burden on senior citizens, the Central government is considering a Goods and Services Tax (GST) exemption for health insurance premiums they pay. If implemented, it will offer relief to the elderly population who face high medical costs due to age-related health issues.
Health insurance policies attract an 18 per cent GST, often discouraging people from taking better or higher insurance policies. In August, Union Finance Minister Nirmala Sitharaman said that around Rs 24,000 crore had been collected from GST on health and life insurance in the past three years.
If GST exemption is implemented, here’s how it will benefit senior citizens:
1) Those with health coverage up to Rs 5 lakh will have tax-free premiums. Those above Rs 5 lakh will attract 18 per cent GST.
2) It will improve the insurance penetration in India, which stands at 4 per cent.
3) An increase in the number of insurance companies can mean a lot more options and better services.
India also has the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana to help people with medical expenses of up to Rs 5 lakh. It aims to offer insurance coverage to citizens above the age of 70 who can clear the eligibility criteria on the official website. The scheme also covers expenses like drugs, supplies, diagnostic services, physician’s fees, room charges, surgeon charges, OT and ICU charges.
