Ending tax on insurance and medical equipment is a historic step, say doctors

Team L&M

In the 56th meeting of the GST Council, several major decisions were taken to provide big relief to patients and the general public. The GST on several essential medical products, which was earlier 18%, has now been reduced to 5%.

This includes crucial equipment like thermometers, medical-grade oxygen, all diagnostic kits and reagents, glucometers and test strips, and spectacles. Earlier, these items attracted 12% GST, which has now been reduced to 5%.

Along with this, the government has also taken the historic decision to completely remove GST on premiums for personal life insurance and health insurance policies. Until now, GST at the rate of 18% was levied on health and life insurance premiums.

Direct benefit for the common people

Health sector experts believe that this decision will not only make treatment cheaper for patients but will also reduce the financial burden on the general public. Devices like thermometers and glucometers are used directly in almost every household. At the same time, diagnostic kits and medical oxygen play a crucial role in saving patients’ lives, from hospitals to rural areas.

Dr. Ashish Chaudhry, Managing Director of Aakash Healthcare, says, “This step will prove to be a milestone in making healthcare services accessible and affordable. Devices like glucometers, diagnostic kits, and medical oxygen are essential for millions of patients every day. Reducing tax will lower their prices and ensure easier access for patients.”

Dr. Aakaar Kapoor, CEO and Lead Medical Advisor, City Xray Scan & Clinic says, “The reduction of GST on diagnostic kits and reagents will have a direct impact on the cost of tests. Now patients will be able to get blood tests, X-rays, MRIs, and other diagnostic examinations at lower prices. This will not only provide financial relief to patients but also make timely testing easier, helping in the early detection of diseases.”

GST abolished on health and life insurance

The biggest change is the removal of GST on personal health and life insurance policies. Earlier, the cost of premiums used to rise significantly due to the 18% tax. Now, after this decision, policies will become cheaper and more people will be able to opt for insurance.

Says Vishal Bali, Executive Chairman, Asia Healthcare Holdings (AHH), “The GST reforms under healthcare can be a significant enabler. Only 41% households in India are covered through either govt or private health insurance schemes leaving a significant gap to be covered. Similarly, life insurance penetration has been witnessing a decline rather than an increasing trend. Reduction in GST from 18% to nil should give a boost to both these segments which are critical for citizens. The GST reduction in diagnostic kits and reagents to 5% should also catalyse the focus on preventive health. Overall important moves for the sector.“

Major change in the healthcare sector

Experts believe that these reforms will create a positive environment in the healthcare sector. With medical equipment becoming cheaper, hospitals in rural and small towns will also be able to purchase them easily. With greater health insurance coverage, more people will be able to afford treatment costs. It will help strengthen medical infrastructure.

The government’s decision has brought a double relief of “affordable medicines and equipment & affordable insurance” to the healthcare sector. On one hand, it will reduce the burden of treatment on patients, and on the other hand, it will make insurance easier for the general public. This step is being seen as a major reform in making healthcare universal and accessible in India.