{"id":306700,"date":"2024-08-07T19:44:32","date_gmt":"2024-08-07T14:14:32","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=306700"},"modified":"2024-08-07T19:44:32","modified_gmt":"2024-08-07T14:14:32","slug":"declining-affordability-of-health-insurances","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/declining-affordability-of-health-insurances\/","title":{"rendered":"Declining affordability of health insurances"},"content":{"rendered":"

Source<\/strong>: The post Declining affordability of health insurances<\/strong> has been created, based on the article \u201cExplained: The debate over GST on health insurance\u201d<\/strong> published in \u201cIndian Express\u201d<\/strong> on 7th August 2024.<\/p>\n

UPSC Syllabus Topic:<\/strong> GS Paper 2 – Governance-Issues relating to development and management of Social Sector\/Services relating to Health<\/p>\n

Context<\/strong>: The article discusses how the increase in health and life insurance premiums, coupled with an 18% GST, has made insurance less affordable. It highlights concerns against this tax and debates on whether reducing GST would benefit policyholders and insurance industry growth.<\/p>\n

For detailed information on All\u00ad-in-\u00adone policy plan to spread insurance in India <\/strong>read this article here<\/a><\/p>\n

What is the GST on Health and Life Insurance Premiums?<\/strong><\/h2>\n
    \n
  1. GST on health and life insurance policies is fixed at 18%.<\/li>\n
  2. GST replaced indirect taxes like service tax and cess on July 1, 2017.<\/li>\n
  3. Before GST, life insurance premiums had a 15% tax, including Basic Service Tax, Swachh Bharat cess, and Krishi Kalyan cess.<\/li>\n
  4. The increase from 15% to 18% raised premiums for policyholders.<\/li>\n
  5. In the last three financial years, GST on insurance policies generated Rs 21,256 crore.<\/li>\n
  6. Reissuance of health policies added another Rs 3,274 crore.<\/li>\n
  7. The rise in premiums, coupled with GST, has made insurance less affordable.<\/li>\n<\/ol>\n

    What Are the Arguments for Reducing GST on Insurance?<\/strong><\/h2>\n
      \n
    1. High Premium Costs<\/strong>: Health insurance premiums have increased significantly, with some public sector insurers raising premiums by 50%.<\/li>\n
    2. Medical Inflation<\/strong>: Medical inflation was estimated at 14% at the end of last year, adding to the cost burden on policyholders.<\/li>\n
    3. High GST Rate<\/strong>: India’s GST on insurance is 18%, the highest globally, deterring people from buying policies. Markets like Singapore and Hong Kong have no GST or VAT on insurance, making policies more affordable.<\/li>\n
    4. Industry Growth Restriction<\/strong>: Union Minister Nitin Gadkari stated that the GST on premiums restricts the industry’s growth.<\/li>\n
    5. Revenue Data<\/strong>: GST on insurance policies generated Rs 21,256 crore in the last three years, indicating the substantial financial burden on policyholders.<\/li>\n<\/ol>\n

      How Significant are the Insurance Markets in India?<\/strong><\/h2>\n
        \n
      1. The general insurance industry collected Rs 1,09,000 crore in health premiums in 2023-24.<\/li>\n
      2. Life insurance companies collected Rs 3,77,960 crore in premiums, with LIC contributing Rs 2,22,522 crore.<\/li>\n
      3. Five states (Maharashtra, Karnataka, Tamil Nadu, Gujarat, and Delhi) contributed 64% of total health insurance premiums in 2022-23.<\/li>\n
      4. Insurance penetration in the life sector dropped to 3% in 2022-23 from 3.2% in 2021-22.<\/li>\n
      5. Non-life insurance sector penetration remained at 1%.<\/li>\n
      6. Overall insurance penetration decreased to 4% in 2022-23 from 4.2% in 2021-22.<\/li>\n<\/ol>\n

        Question for practice:<\/strong><\/p>\n

        Examine how the increase in GST on health and life insurance premiums has impacted the affordability and growth of the insurance industry in India.<\/p>\n","protected":false},"excerpt":{"rendered":"

        Source: The post Declining affordability of health insurances has been created, based on the article \u201cExplained: The debate over GST on health insurance\u201d published in \u201cIndian Express\u201d on 7th August 2024. UPSC Syllabus Topic: GS Paper 2 – Governance-Issues relating to development and management of Social Sector\/Services relating to Health Context: The article discusses how… Continue reading Declining affordability of health insurances<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[300,212,10500],"class_list":["post-306700","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","tag-governance","tag-gs-paper-2","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/306700","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=306700"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/306700\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=306700"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=306700"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=306700"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}