Budget Wishlist From MD & CEO Ashish Mehrotra,Max Bupa Health Insurance

Budget Wishlist 2016                                                                             The last year’s budget was progressive and forward

looking and clearly exhibited the government’s understanding of the impending needs to fuel economic growth through righteous allocation of funds and impetus to foreign investment. It helped set pace for fast growth trajectory of the Health Insurance sector by fulfilling the industry’s long standing demand of increasing the tax deduction limit under section 80D. This year, a growth-oriented budget, with a focus on increase in financial inclusion, ease of access through online transactions, along with further tax rebates on health insurance will provide a stimulus to the industry’s growth.

Over the next 10 years, the population in India is forecasted to grow from an estimated 1.2bn today to 1.4bn by 2024-25.A higher real GDP, combined with a growing and more demanding population expecting access to the newest medical technology and drugs, will create considerable pressure on government to spend more on direct health services. The current estimated level of around 5% of GDP is unlikely to be sufficient to meet India’s future healthcare needs and wants. To ensure a healthier and more productive workforce to drive economic growth will require a significant increase in overall healthcare spending combined with a reduction in the proportion of OOP spending.

A viable solution that could provide the much needed relief would be Universal Health Coverage (UHC).
Indian citizens do not enjoy access to health as a fundamental right and health insurance in India is purely voluntary for most of the categories of population at present. But it is every Indian’s need to have access to an all-inclusive and quality healthcare system and it is imperative that UHC be made the comprehensive framework for the country’s public health planning. Innovations across all touch points will be harbinger of growth and will help us accomplish our mission of getting to universal health insurance coverage in India. The implementation of UHC will benefit the economy, as we will save on 1-2% our GDP, if basic health care is provided to the lower strata of the population. What is encouraging is now, both central and state governments are willing to raise their levels of health spending. The funding gap is daunting but viewed from the perspective of the private health insurance market, there is a significant role for the sector to play, driving innovation and creating value across the healthcare sector. The experience from other countries shows that private health insurance can be a catalyst for innovation which results in higher quality, more efficient care and consumers which are more engaged in staying healthy.

Secondly, tax burden is a clear area of pain which has been weighing hard on larger section of the society. Unfortunately, health insurance is still looked upon as a secondary option to other investments by most consumers. While lack of awareness is the primary cause for this, lower tax exemption also plays a crucial role as health insurance is still seen as a stress purchase in India. A welcome move would be if the government can provide relief by removing the 14% service tax on health insurance premium and further increase the deduction limit under section 80D for individuals and families from Rs 25, 000 to Rs.50, 000. Tax benefits will help boost penetration of health insurance as well as help nurture a culture of preventive healthcare in India.