Guest Column| Hospital bill should not be a financial death sentence

As the Union Budget-2025 is presented on February 1, India’s healthcare sector stands at the crossroads, demanding urgent reforms and strategic investments. While considerable progress has been made in infrastructure and disease control, persistent challenges such as affordability, accessibility, and regulatory inconsistencies continue to undermine public confidence. This year’s budget presents an opportunity to address these pressing concerns and pave the way for an equitable healthcare framework.

A hospital bill should not be a financial death sentence, yet India’s healthcare system is marked by stark disparities in costs and service quality across private hospitals. The absence of a unified regulatory framework has led to unpredictable pricing, leaving patients vulnerable to exorbitant charges for basic and specialised treatments. Strengthening regulatory mechanisms to ensure transparent pricing, uniform service delivery, and standardisation of costs is essential. The budget should allocate funds to operationalise independent oversight bodies modelled on global best practices, such as Germany’s standardised pricing system and Japan’s insurance-backed medical services, which ensure equitable access.

Increase healthcare allocation

A nation’s health is its true wealth, yet despite India’s economic growth, public healthcare expenditure remains stagnant at 1.9% of GDP, far below the global average of 10.38%. The National Health Policy-2017 had set a target of increasing healthcare spending to 2.5% of GDP by 2025, which has not been adhered to, but the need of the hour is to push for at least 5% of GDP to ensure robust healthcare infrastructure and accessibility. A recent State Bank of India (SBI) report has even recommended an allocation of up to 10% of GDP to meet the growing healthcare demands. If India truly aspires to be a global powerhouse, investing in healthcare is non-negotiable.

The budget must increase this allocation to at least 5% of the GDP, prioritising infrastructure development, digital health technologies such as telemedicine and AI-driven diagnostics, and preventive healthcare initiatives. Countries, such as the UK with its NHS model and Singapore’s MediShield Life, provide valuable insights into efficient public health investment and risk-pooling mechanisms that India can adapt.

More expenditure is also required as our country needs to spend on research and development. With this, we can produce medicines indigenously which should be available at low cost, particularly for cancer and other rare diseases.

Regulatory reforms in insurance

Insurance should be a shield, not a burden, yet millions remain financially vulnerable due to low insurance penetration. The Employees’ State Insurance Corporation (ESIC) income threshold of ₹21,000, unchanged since 2016, excludes many low-income workers from affordable healthcare coverage. At the same time, unregulated pricing of hospital consumables like syringes, implants, and essential equipment further inflates out-of-pocket expenses, even for those insured. Learning from France and Canada, which successfully mitigate these costs through strong public-private insurance models, India must push for regulatory reforms that curb arbitrary pricing and expand insurance coverage.

With healthcare costs soaring, tax incentives can serve as a powerful tool to encourage broader insurance adoption. The government should enhance deduction limits under Section 80D. Additional deductions should be introduced for chronic care, offering relief to families managing long-term illnesses, while separate deductions for life insurance premiums can promote financial security. Lowering the current 18% GST on insurance premiums would make policies more affordable, ensuring broader participation.

Healthcare should not be a privilege, but a promise fulfilled by the state. By increasing public health spending, strengthening regulatory oversight, and expanding insurance incentives, India can take a decisive step toward universal and affordable healthcare. The Nordic nations provide a strong example of how government intervention can ensure cost regulation and universal coverage. Now is the time for India to make a bold move by implementing meaningful reforms that ensure quality healthcare is accessible to all and transforming the dream of equitable healthcare into reality.

The writer is a Rajya Sabha MP from Punjab and a member of parliamentary standing committee on health and family welfare. Views expressed are personal.