Excluding ICU, rooms with rent above Rs 5,000 will attract GST. Now the question is that if you have a health insurance policy and it has room rent sub-limits, then what will be the effect of this tax on you.
Read Also: LIC Big Update: LIC becomes top ranked Indian firm in Fortune Global 500 list, know immediately
Health Insurance: GST Council The council has recently imposed 5 percent GST on hospital rooms. This GST will be applicable on rooms with rent above Rs 5,000, excluding ICU. Now the question is that if you have a health insurance policy and it has room rent sub limits, then what will be the effect of this tax on you. Will your hospital bill increase or not?
According to experts, health insurers may consider this tax as part of the total bill amount, but policyholders who plan for the room rent sub-limit may be affected by it. The insurer will normally pay the insured’s claim (including GST charges) if there is no capping on the room rent in the policy. But on the other hand, this tax can increase the financial burden on the insured.
Read Also Good LIC Scheme: Invest once in this policy of LIC, get Rs 6859 every month for life
Insurance premium may increase further
The premium for all health insurance may increase further for all age groups. Biresh Giri of ACKO Insurance says, ‘From the policyholder’s point of view, this GST will also result in higher premium as the room rent is 15-20 per cent of the total hospital bill.’
Expected 2-3% hike in premium
According to experts, insurance companies will not increase the policy premium immediately. In the future, in refiling of products, insurance companies can increase the premium by 2-3 percent. A separate 18% GST is applicable on health insurance premium. In view of this, insurance companies will also have to make changes in their hospital package. Due to this tax, the open cost of the hospital will increase. Therefore, after the increased claim, insurance companies will also increase their premium.
Policy will be expensive, but why?, you should know
Satish Gidugu, CEO and Whole Time Director, MediAssist TPA Company says that earlier healthcare was out of the purview of GST. A levy of 5 percent on hospital room rent will increase the cost of hospital stay for policyholders who have health insurance policies with room rent sub-limits.
Read Also: Life Insurance Policy: Why is it necessary to get life insurance? get it from the experts
