By Divyanshu Tripathi
Woven around three prominent themes — aspirational India, economic development and caring society, Union Finance Minister Shree Nirmala Sitharaman announced Union Budget 2020. The finance minister in her speech unveiled several policies and tax announcements. Some of the major announcements were directed towards taxpayers, intending to put more money in their hands.
The option to use between the new tax regime and the old one is a skewed one, depending on their income composition and investments. Talking about the impact of the optional tax regime in the health insurance industry, it would be accurate to say that tax exemptions are an essential motivation for the purchase of health insurance. Considering the new tax regime, people may not be enthused to renew or purchase their health insurance as strongly as they are today. However, it is imperative to reinforce that health insurance helps you cover the medical expenses in case of adversities.
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The government made a positive move to list LIC. This would create awareness about insurance in the interiors of the country. The idea needs to move towards shifting insurance to protection; people should be investing in their protection in a planned manner. Some of the other initiatives announced in the Budget for healthcare industry were focused towards creating an infrastructure and improving access to healthcare like diversion of proceeds from taxes on medical devices for health infrastructure development in small cities, extending the ambit of Ayushman Bharat through PPP model hospitals in 112 new districts, the expansion of existing programme – Mission Indradhanush – to cover 12 new diseases and 5 new vaccines and creating more medical colleges at district-level hospitals, among others.
The health cess on the import of medical devices would help domestic manufacturing companies and provide a boost to Make in India initiative. It is believed that these initiatives will help fill the gap between the need for access to healthcare through increased infrastructure.
With more focus on the usage of machine learning and AI in the healthcare sector, health authorities and the medical fraternity can target diseases and develop appropriately designed preventive regimes. Use of such technology would also create avenues for start-ups to cater to the needs and would also drive efficiencies and eliminate human errors in the whole value chain.
Focus and road ahead
The allocation of Rs 69,000 crore for the sector, though, is a positive move, it is still just 1% of the GDP and there should be an aggressive action to push it to double digit levels. Developed economies like the US spend more than 15% of their GDP on healthcare with per person average spend of more than $10,000. Certainly, there is a long way ahead of us.
There is a need to set up a dedicated task force to assess how to bring down the cost of healthcare without impacting the service providers’ cost structures. The progress of government schemes like Delhi Arogya Kosh could be magnified by taking it across other states too.
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It is believed that the measures proposed in the Budget would support to fill the gap and help bring healthcare into focus and also create awareness around the importance of taking adequate health insurance cover. A sufficient health insurance policy also helps to get access to quality healthcare services. In view of making deeper health insurance penetration, various health insurance companies launched insurance policies that cover out-of-pocket expenses like OPD and day-care procedures. At least five crore Indians slip below the poverty line because of unexpected health emergencies. It is crucial to create awareness about the benefits of buying health insurance in tier 3 to tier 5 cities.
Insurance, a sector which came into existence, with the core objective of providing protection, be it for health, life or otherwise, would need to be emphasized among the masses all over again for widened awareness and reach. At the same time, it would be interesting to see at what levels the desires of the Aspirational Indian would go.
(The author is co-founder and CEO, Easypolicy. The views expressed in this article are personal.)