New Delhi: Even after the central government announced the removal of Goods and Services Tax (GST) on health insurance premiums to provide financial relief to citizens, several health insurance companies have allegedly failed to extend the benefit to policyholders.
In a formal representation submitted to Union Finance Minister Nirmala Sitharaman, the Confederation of NCR Residents Welfare Associations (CONRWA) has raised strong objections to what it calls “unfair and deceptive practices” by insurers. The organization claims that instead of reducing premiums after GST removal, many insurance companies have increased policy rates, effectively neutralizing the government’s relief measure.
“Senior citizens, middle-income and lower-income families are now facing additional financial burden, as insurers have used GST exemption as an opportunity to raise premiums,” the representative notes. CONRWA further argues that this practice “goes against the spirit of government policy” and amounts to “cheating both the public and the government.”
The letter also highlights the plight of policyholders who paid lump-sum premiums for multi-year policies before the GST exemption came into effect. CONRWA has demanded that these citizens be refunded the excess GST paid for the remaining policy years.
The association has urged the finance ministry to:
- Direct health insurance companies to pass on the full benefit of GST exemption to customers.
- Set up an independent committee to review the sudden spike in health insurance premiums.
- Instruct the Insurance Regulatory and Development Authority of India (IRDAI) to monitor and take strict action against non-compliant insurers.
- Ensure refund of excess GST already paid for multi-year policies.
This issue affects millions of Indian households who rely on health insurance for medical security,” the letter states, calling for urgent intervention by the Finance Ministry to safeguard citizen interests.
As of now, neither the Finance Ministry nor IRDAI has issued a formal clarification on whether health insurers are mandated to refund GST amounts or reduce existing premiums. Consumer bodies and senior citizen groups are expected to join the demand in the coming days.