INSURANCE IN INDIA

The Indian healthcare financing system is largely characterized by high out-of-pocket expenditure, which continues to place significant financial pressure on households, particularly in semi-urban and rural regions. A major policy intervention aimed at addressing this issue was the decision of the GST Council in September 2025 to exempt individual Mediclaim and health insurance premiums from the previously applicable 18 percent Goods and Services Tax (GST). The objective of this reform was to improve affordability, enhance insurance penetration, and provide financial security to the population segments commonly referred to as the “missing middle.” The present study examines the impact of zero percent GST on Mediclaim insurance from a customer-centric perspective, with special reference to Amravati district, a Tier-II city in Maharashtra. The study adopts a descriptive and analytical research design to evaluate investor awareness, perceptions of affordability, and the influence of GST exemption on insurance adoption decisions. Primary data were collected from respondents in Amravati using a structured questionnaire, while secondary data were sourced from government notifications, IRDAI reports, GST Council releases, academic journals, and industry publications. The findings indicate that the removal of GST has positively influenced the perceived affordability of Mediclaim insurance, making policies more financially attractive to customers. However, the study also reveals that factors such as lack of awareness, trust issues, and limited understanding of insurance products continue to act as barriers to wider adoption. From an industry perspective, insurers face challenges related to increased operational costs due to the loss of Input Tax Credit, which has implications for long-term financial sustainability. The study concludes that while zero percent GST is a significant step toward improving health insurance penetration, complementary efforts in customer education, awareness building, and policy refinement are essential to achieve the broader goal of inclusive health coverage. The research provides valuable insights for policymakers, insurance companies, and academicians by linking taxation reforms with consumer behavior in semi-urban markets like Amravati.