By Mr. Srikanth Kandikonda, Chief Financial Officer, ManipalCigna Health Insurance.
“Medical inflation continues to be one of the biggest challenges facing India’s healthcare system, projected at 11.5%–14%, among the highest in Asia. While measures such as the removal of GST on insurance premiums and allowing 100 percent FDI in insurance can improve affordability and sector resilience, rising medical costs continue to put pressure on Indian households.
As the Union Budget 2026–27 approaches, there is an opportunity to strengthen healthcare affordability through higher public health spending and a sharper focus on prevention. Currently, public health expenditure in India remains below global benchmarks and even short of the National Health Policy target of 2.5% of GDP in 2025. Enhancing the budgetary outlay for public health would strengthen primary care networks, expand preventive services, and relieve financial stress on citizens.
At the same time, policy measures that encourage preventive healthcare can significantly lower long-term treatment costs. Industry reports indicate that preventive care reduces hospitalisations and improves health outcomes. Introducing separate and enhanced tax benefits for OPD services and preventive health screenings, beyond the current limits under Section 80D, would encourage wider adoption of preventive care.
With India’s ageing population and rising burden of chronic diseases, a prevention-led approach, supported by budgetary reforms, can play a critical role in improving health outcomes in the country.”