Will GST relief on senior health insurance make elderly care more affordable and accessible?

Caring for senior citizens is never just about paying hospital bills—it is about providing security, dignity, and peace of mind in their later years. As age advances, so do health risks, which translates into higher medical expenses. For families, especially those dependent on pensions or modest savings, these costs can be overwhelming.

Health insurance is meant to bridge that gap, but the reality is different. Premiums for senior citizens are already steep, and an additional 18% Goods and Services Tax (GST) only makes them heavier. A policy that could cost ₹50,000 annually effectively shoots up to ₹59,000 with GST. For many middle-class households, that extra ₹9,000 becomes the tipping point between buying or postponing health insurance for their parents.

This is why the government’s discussions around GST relief on senior health insurance have sparked genuine hope. The question is: can such a reform truly make elderly care more affordable and accessible?

Can tax relief improve access to elder care insurance?

For most households, the decision to insure their parents or grandparents comes down to affordability. Health insurance is often seen as essential—but when premiums feel unaffordable, it is treated as optional. The outcome? Many seniors remain uninsured, leaving families financially vulnerable during medical crises.

Even a small reduction in GST can alter this equation. If a ₹50,000 policy remains ₹50,000 rather than ballooning to ₹59,000, families are far more likely to view it as a justifiable investment. This relief could also encourage them to opt for higher coverage, ensuring that emergencies do not drain lifelong savings.

Over time, such a shift could normalize health insurance for seniors—transforming it from a luxury for the few into a necessity for the many.

How GST cuts could expand senior health coverage

India’s elderly population is projected to reach nearly 194 million by 2031, according to census estimates. With age comes a greater need for hospitalization, diagnostics, and long-term care. For insurers, this risk translates into higher premiums, but GST widens the gap even further.

Removing or reducing GST would immediately ease the financial load. Families could afford better, more comprehensive policies, which may include preventive care, regular health check-ups, or even teleconsultations. Such coverage not only protects against hospitalization costs but also fosters healthier living and early detection of illnesses.

The ripple effects could be transformative:

> Broader adoption in smaller towns: Reduced costs would encourage families in Tier 2 and Tier 3 cities to embrace senior health insurance, not just metros.

> Innovation by insurers: With a larger senior customer base, insurers would be incentivized to design specialized products, including wellness programs and elderly-friendly services.

> Support for diaspora families: Indians living abroad could more confidently buy policies for their parents in India, knowing affordability is no longer a hurdle.

In short, GST relief could unlock a virtuous cycle—affordable policies leading to wider adoption, which in turn encourages innovation and better service.

What lower GST could mean for elderly care

The true impact of a GST cut cannot be measured only in numbers. At its core, it can reshape how families approach elderly care.

When premiums are manageable, families are less likely to delay decisions and more likely to see health insurance as a responsibility. Seniors, in turn, gain dignity and independence—knowing their healthcare is secured without overburdening their children. Hospitals and care providers, too, benefit from smoother claim processes, ensuring faster treatment without financial bottlenecks.

Most importantly, the policy shift aligns with the government’s larger vision of expanding healthcare access and social security for vulnerable groups. With India’s senior population growing rapidly, ensuring affordable healthcare is not just an economic necessity but also a moral responsibility.

A step toward compassionate healthcare

The conversation around GST relief on senior health insurance is not merely about cheaper premiums—it is about compassion. It is about making sure that in their twilight years, elders do not have to choose between dignity and affordability.

If the government moves forward with GST relief, it will not only reduce financial stress for families but also strengthen India’s healthcare safety net. For countless households, such a reform would mean their elders can age with security, dignity, and the assurance that care is accessible when it is needed most.

The author is the Founder and CEO of Livlong 365. Views expressed by the expert are his/her own.