So you’re celebrating that health insurance premiums might soon come with 0% GST? You think your annual ₹8,000 payment (earlier with 18% GST included) will suddenly drop? Wake up, because the math isn’t that simple.
If you’ve been paying ₹8,000 today (₹6,780 premium + ₹1,220 GST), and next year you’re still paying ₹8,000 “without GST,” guess what? The insurer has already pocketed the difference. This is not about consumer relief; it’s about industry adjustments. Just like ethanol in petrol didn’t make fuel cheaper, don’t expect GST-free insurance to fatten your wallet.
Here are five hard truths that hit like a bucket of cold water:
1. GST Was the Villain… Until It Wasn’t
When GST was added, the pitch was: “Government tax is making insurance expensive.” Remove the GST, and logic says prices should fall. But companies don’t like “less revenue.” Instead of giving you relief, they just tweak the base premium upward.
2. ₹8,000 Is the New Normal—With or Without GST
Today: ₹6,780 premium + ₹1,220 GST = ₹8,000.
Tomorrow: ₹8,000 flat premium + 0% GST.
Result? Same outflow for you, bigger base for them. Consumer 0, Insurer 1.
3. The Ethanol-Petrol Illusion
Remember when adding 20% ethanol to fuel was supposed to cut costs? Did petrol become cheaper? Nope. Similarly, don’t expect GST relief to translate into real savings. These moves are about optics, not economics.
4. Insurance Companies Always Adjust the Goalposts
health inflation is real, but insurers add their own inflation too. Every year, premiums creep up under the excuse of “rising medical costs.” Removing GST is just a convenient new excuse to pad the base numbers.
5. The Consumer’s Perception Is the Real Game
By keeping the final figure steady, insurers can market it as “See, your premium hasn’t increased!” when in reality, your premium has gone up—just hidden under the label of “GST exemption.”
💡 Final Slap of Truth:
Zero GST on insurance doesn’t mean zero exploitation. It means companies get creative at extracting the same (or more) from you while smiling about “government relief.” Unless regulations force insurers to actually pass on the benefit, you’re just a spectator in another clever numbers game.
click and follow Indiaherald WhatsApp channel