Budget 2018: Why healthcare is the biggest winner this time

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New Delhi | Published: February 3, 2018 12:11:00 PM

Budget 2018 was awaited with bated breath and Finance Minister Arun Jaitley did not disappoint, mainly on social and welfare schemes. While income tax slabs, which is what most taxpayers look forward to, remain the same with a slight relief for the salaried class, the biggest takeaway without a doubt this Union Budget was the healthcare sector.

FM Arun Jaitley presented Union Budget on 1st February.Budget 2018: The government has extended tax benefits as well to those spending on medical insurance. (Reuters)

Budget 2018 was awaited with bated breath and Finance Minister Arun Jaitley did not disappoint, mainly on social and welfare schemes. While income tax slabs, which is what most taxpayers look forward to, remain the same with a slight relief for the salaried class, the biggest takeaway without a doubt this Union Budget was the healthcare sector.

The BJP-led Central government announced the world’s largest government funded healthcare programme, the National Health Protection scheme, under which 10 crore families will be provided Rs 5 lakh cover per family annually for treatment. The programme is being touted as the world’s largest health protection scheme and looks to cover an estimated 50 crore individuals from the poor and vulnerable section. This will mainly cater to the poor and mainly help lots of rural deaths which still happen due to lack of affordability to get proper treatment. This will complement the push to reach out to more people in the lower income segment through the PM Jeevan Bhima Yojana and Suranksha Yojana.

Know how Arun Jaitley’s Budget 2018 will impact your tax liability with this Income Tax Calculator

Medical Insurance Boom

In fact, this will not just affect those under the ambit of this scheme but also those not within it. While the benefiters will be able to avail this amount for medical expenses, the plan I itself will create huge awareness about medical insurance, the same way that Jan Dhan had ensured every Indian has a bank account. The average medical policy taken by individuals over and above their company provided policies ranges anywhere between Rs 1 and 3 lakh for the whole family. In comparison to this, the government-provided insurance of Rs 5 lakh will only encourage those outside the scheme to increase their spend on medical insurance. And given the rising prices of medical costs in the country, having a cover of Rs 5 lakh for an average family of four is only beneficial.

Watch video: Budget 2018: Budget 2018 Tremrendous things done for Healthcare Sector

As stated by the Finance Minister himself, having adequate medical cover helps people save their actual income, as they do not have to shell out huge chunks of money at once, or even loan money for the same.

Also read: Budget 2018: Few positives for the healthcare sector

Added Tax Exemption Benefits

The focus on healthcare this year has gone beyond just schemes. The government has extended tax benefits as well to those spending on medical insurance. While the exemption limit for individuals below 60 remained same, for those above it have got greater exemption limits.

Watch video: Budget 2018: The story of the Budget briefcase | 5 things we bet you didn’t know

The government has raised the limit of deduction for health insurance premium or medical expenditure from Rs 30,000 to Rs 50,000 under Section 80D. All senior citizens will now be able to claim the Rs 50,000 per annum in respect of any health insurance premium or any general medical expenditure incurred. It also raised the limit of deduction for medical expenditure in respect of certain critical illness from Rs 60,000 in case of senior citizens and from Rs 80,000 in case of very senior citizens to Rs 1 lakh in respect of all senior citizens, under section 80DDB. This is a great boost for the elderly who are grappling with growing medicals costs as well as higher premiums for their insurances.

Other Healthcare Spends

In addition to this, FM Jaitley announced Rs 1,200 crore for the 1.5 lakh wellness health centers in the country. He also announced Rs 600 crore for nutritional support of Tuberculosis patients in India. Under this initiative, Rs 500 will be provided to each TB patient undergoing treatment.
(The author is CEO, Bankbazaar.com)

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