To ease the financial burden on senior citizens, the govt is considering a Goods and Services Tax (GST) exemption for health insurance premiums paid by elderly individuals. If implemented, the exemption will offer relief to senior citizens who face high medical costs due to age-related health issues. Health insurance policies attract an 18% GST, often discouraging people from taking better or higher insurance policies.
In August of this year, 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 citizens: 1) Those with health coverage up to Rs 5 lakh will have tax-free premiums. Those above 5 lakh will have 18% GST.
2) It will improve the insurance penetration in India, which is now at 4%. 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..