Know Health Insurance Scheme Before and After Budget 2018

  May 31, 2018

In a country like ours, there are a range of issues that people face due to inadequate healthcare facilities at an affordable cost. One of the most common issues that people face in India is the rising healthcare costs. These high costs make healthcare inaccessible to the general population; as most people cannot afford quality medical treatment.

Insurance is one of the critical social welfare issues in the country, and the Union Budget 2018 has addressed it well. Health insurance issue was addressed in the Budget 2018 by providing quality healthcare to poor families. Although the budget was predominantly a farmer’s budget, but it also had a big focus on healthcare. There were some welcome changes made in the health insurance sector, including a flagship national health protection scheme to cover 10 crore poor and vulnerable families and offering much-needed relief to senior citizens that are struggling to cope with the rising cost of healthcare.

Budget 2018- Highlights for the Healthcare Sector

  • World’s Largest Healthcare Program - National Health Protection Scheme

The proposed mass health scheme is a welcome move that the government has implemented in Budget 2018. This National Health Protection Scheme will be complementary to the Pradhan Mantri Suraksha Bima Yojana (PMSBY) and will cater to those from the underprivileged sections of the society. In fact, this scheme was previously announced in the 2016 Budget; however, the only difference being that the sum assured was raised from ₹30,000 to ₹1.5 lakhs at that time, which has been further raised to ₹5 lakhs now.

This flagship health scheme would be the world’s largest healthcare scheme, and will help the country slowly progress towards universal health coverage. Under the National Health Protection Scheme, health insurance cover of ₹5 lakh a family per annum will be provided. This scheme will be offered to 10 crore vulnerable families, with approximately 50 crore beneficiaries. Health and wellness centers will also be set up across the nation to make healthcare more accessible. 1.5 lakh centers will be set up which will provide free essential drugs and diagnostic services, and Rs. 1200 crore has been allocated for this.

  • Increase in Deduction for Senior Citizens

Budget 2018 has increased the limit of deduction under Section 80D from ₹30,000 to ₹50,000 related to health insurance premiums or medical expenditure for senior citizen taxpayers. This change is a positive step towards improving the health and safety of senior citizens in the country. This raise will help ensure that health insurance companies are able to penetrate better, and it will also encourage families and senior citizens to invest in adequate health covers. Further, this move will also reduce the tax liability on the senior citizens and give them some respite from the ever-increasing cost of medical treatments.

This deduction is applicable towards payment of premium on health insurance policies such as medical insurance, critical illness insurance, or preventive health-check-up by a senior citizen. In case of a super-senior citizen (above 80 years of age), this deduction can be availed for medical expenditure as well. If a taxpayer has bought a senior citizen health policy for his/her parents, they can get a total tax deduction can be availed for ₹75,000 instead of the earlier ₹55,000.

  • Proportionate Deduction for Single Premium Health Insurance

Single premium health insurance policies that offer coverage for more than a year will now be allowed deduction on a proportionate basis. The deduction will be offered based upon the number of years the policy is for, and will be subject to the specified limit. This proportionate deduction will offer dual profits to the taxpayers by allowing for discount and deduction in the same year.

Why Health Insurance is a Necessity?

Health insurance is one of the most neglected general insurance policies in India. People in India mostly focus on buying insurance policies that offer some kind of maturity benefit, which in case of health insurance is offered only when you fall sick. When you fall ill, you may end up wiping off your entire savings for the medical treatment costs. And this is where having a comprehensive health insurance plan which secures you against a range of health problems and pays up for your treatment costs, is essential.

Busy work schedules, adulteration in food, rising pollution levels, and lack of sleep and exercise, are the reasons that have made us prone to a range of health problems. In addition to this, the escalating health care costs further stress on the need to have a health insurance plan in place. Undeniably, there are many important reasons to have a health insurance plan in place, and if you have a family to support, it is always preferable to buy a family health insurance policy that takes care of the medical needs of your entire family. Depending upon your need for health insurance, you can buy individual or family health insurance, standard health insurance or critical illness insurance.

If we take an average, the healthcare costs have been rising at the rate of 15% year on year, and has been contributing to inflation in medical costs. As most of the Indians rely on savings to manage medical costs arising due to an accident or critical diseases, they end up burning a hole in their savings, and many cannot even access healthcare. No one would want to wipe off their savings completely in case of a sudden health problem. Hence, having medical insurance that secures you against a range of health problems is now an absolute necessity.

Know Health Insurance Scheme Before and After Budget 2018


I am Trisha Sharma, an avid automobile blogger, who has been blogging for about five years. Passionate about discovering hidden attractions across the Globe and writing about them and I believe in writing informative content to educate people about what and when to check when they plan to buy their car insurance.

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