Bengaluru: By levying an 18 per cent GST on health insurance, the central government is disincentivising it and thus making healthcare inaccessible for the poor and middle class, noted Karnataka health minister Dinesh Gundu Rao.
In a letter to Prime Minister Narendra Modi on Friday, Gundu Rao called this level of taxation on an essential service “draconian” and urged the PM to recommend the GST Council to reconsider the 18 per cent GST for low and middle income policy holders at their meeting on September 9.
This, he noted, would be a positive step in achieving Universal Insurance by 2047. “If this union government is serious about its rhetoric of Universal Insurance by 2047, this would be an important step towards making it a reality,” he wrote in a post on X.
Ensuring a healthy India is a duty of every elected representative, beyond party lines. Imposing 18% GST on health insurance is a regressive move, making healthcare less accessible to the common man.
— Dinesh Gundu Rao/ದಿನೇಶ್ ಗುಂಡೂರಾವ್ (@dineshgrao) September 6, 2024
I have appealed to Prime Minister @narendramodi avaru to take immediate… pic.twitter.com/XT6Q9sv9cJ
The state’s Arogya Karnataka programme was launched in March 2018, about six months before the nationwide Ayushman Bharat Yojana was launched. While several programs have been running to subsidise healthcare services and make them accessible, insurance is a necessary precaution during medical emergencies. Its rising costs have a “cataclysmic effect” on the economically weaker sections of society, who might forgo getting health insurance altogether, he noted.
In his opinion, the unexplained rationale behind the current union government’s decision in 2017 to levy an 18 per cent GST on health insurance continues to “burden” citizens as it directly impacts the cost of insurance premiums. “The changing unpredictability of the human condition, environmental factors and a new generation of vectors has made health insurance inevitable to protect against unforeseen circumstances.
Which is why it is not only unfortunate, but ironic that a government which espouses the vision of Universal Insurance also taxes it at a rate so high, that it disincentivises health insurance altogether,” he wrote.
He has also written to the health ministers of Jharkhand, Andhra Pradesh, Kerala, Tamil Nadu and Punjab, and Mamata Banerjee, chief minister of West Bengal, to request the Prime Minister to remove GST on health insurance at least for some income brackets.