Krishnan Ramachandran. If a person has to achieve a goal or fulfill a dream, then good health is most important for this. If India wants to achieve the target of 5 trillion economy, then it is important that we focus on three main areas. The most important of these is to generate employment, equip people with work skills and most importantly to ensure good health of all.
Therefore, health care for all is an important and necessary goal for our country. We can gain the benefit of large population of the country only when we have jobs, good skills and healthy people. However, India currently spends 1% of GDP on healthcare. It is much lower than other countries at the same stage of development. The government needs to increase spending on healthcare. Because it ultimately affects our ability to become a rapidly growing economy.
Health insurance quality can be of great help in providing access to health care. This will not only benefit the patients admitted in the hospital, but also the other patients who stay out of the hospital and get good treatment.
We have to make several concerted efforts to spread awareness about the benefits of health insurance and bring more and more people within its ambit. Kovid-19 has served as a motivator for health insurance and we need to maintain this momentum. From a policy point of view, the government can play an important role in this and this will motivate people to buy health insurance.
People often avoid or delay treatment for their disease, this ultimately leads to them being admitted to hospital and their treatment costs are high. Presently, the health insurance premium attracts 18 per cent GST. Because of which treatment of patients in the hospital becomes unnecessarily expensive, it creates a serious obstacle to the inclusion of out-patient products in health insurance.
In fact, 60-70 per cent of the total health care expenditure on out-of-hospital treatment is contributed. This makes a huge difference in directly availing healthcare services rather than going through the insurance system. The government should consider reducing the current GST rates on health insurance. This will not only increase the reach of health insurance, but will also help the government to collect more tax by increasing the number of customers.
In addition to the GST slab cuts, the government can provide incentives and tax exemption benefits to companies and bring in regulations that would encourage companies to provide health insurance to their employees.
At present, the health insurance premium paid by the corporate is treated as an expense and does not get credit of input GST. Although it has been temporarily approved during the Corona epidemic, the government should consider making it a permanent feature, so that MSMEs are motivated to offer health insurance to their employees. This will also benefit companies with more employees, as the expenditure on health insurance will be lower.
At present, the insured for parents below 60 years can claim deduction of Rs 25,000 and if the parents are more than 60 years of age, then this deduction is up to Rs 50,000. The government should consider raising this limit to Rs 50,000 in the first case and Rs 1 lakh in the second case. With this tax benefit, more and more people will be encouraged to take health insurance for their elderly parents. Likewise, tax benefits can also be considered for spending on health insurance.
Not only this, for the sector to thrive, it is important that the health care industry is regulated and the same conditions are applied to the health insurance industry. This will also lead to affordableness in health insurance. When we look at the entire healthcare ecosystem, we find that there is no regulation in healthcare delivery affecting consumers’ interests. Government can really define policies and make them mandatory and standardization can be brought in the sector. Not only this, we should also focus on the need to adopt technology and digital facilities and for this policy intervention is necessary.
India has become an attractive market all over the world. In such a situation, now it is our turn to be able to attract investment. Insurance is a regular sector and has strong rules to protect consumers, therefore, it will be convenient to attract foreign investment here. Permission of 74 percent FDI will lead to growth in the field of health insurance. On the other hand, more companies will get opportunities to invest in the country.
