Key healthcare services will become more expensive under India’s new Goods and Services Tax (GST).
According to the Union Health Ministry, pacemakers and kidney dialysis are among the healthcare amenities which will witness price increases due to tax hikes.
The ministry was responding to a question submitted online. It says tax increases will be 5 to 12 percent for dialysis and orthopaedic support devices; 5.5 to 12-18 percent for pacemakers; and 5 to 7-12 percent for cancer support devices (except those for cancers of the blood.) Diagnostics will also cost more, as diagnostics kits are to come under the 28 percent bracket of the GST. Radiology machines and hepatitis diagnostics are exempt from this.
Essential medicines to remain exempt
The healthcare sector had previously been made exempt from the GST’s ambit. How price increases on certain medical services and devices fits in with this is unclear. However, the ministry has offered assurance (albeit in a separate, unrelated reply) that essential medicines and devices will remain tax exempt.
The GST came into force on July 1 earlier this year in an effort at tax reform. As reported by Health Issues India at the time, the rollout of GST sparked healthcare concerns. It was feared that patients could face drug shortages after the rollout of GST. This was due to panicked drug stockists keeping supplies to a minimum to stave off losses.
Since the rollout of GST, certain medicines have witnessed price increases. The news that some health services are also going up in price is worrying. It has the very real potential to further burden patients with out-of-pocket health expenditures.
Patients bear almost two thirds of healthcare spending in India themselves. This often has dire financial effects on households. A study published last year estimates more than 63 million Indians are pushed below the poverty line every year due to healthcare costs.