Policy analysis on medical expenses: impact of exemption allowed under the income tax act on the cost to consumer in the health sector: a policy analysis.

Abstract

Healthcare delivery in our country is provided by private, government and charitable institutions. Most of the health care spending in our country is out-of-pocket spending as the government spending as a percentage of GDP in our country is very low. It is not clear on how much the healthcare service costs to the consumer. Not many studies have been conducted comprehensively to compare the cost to the consumer of the various health care services. There is a perception that the costs are lower in government hospitals and charitable trusts. However, some hospitals in private sector charge lesser than these hospitals. The proposed study will look into the healthcare costs to the consumer across various private, government and charitable institutions. Various treatments/conditions will be studied upon and their costs will be compared across these institutions across the three tier treatment levels available with these hospitals. Exemption under section 11 is given to charitable trust, registered educational institutions and hospitals. Under section 11 of the Income Tax Act income is exempted if provisions of section 11, 12 and 13 of Income Tax Act are complied. Entire income has to be utilized for the proposed intention of medical relief and the impact of these provisions with respect to medical care cost will be studied upon. Comparison between medical care cost in government hospitals, private sector and trust having exemption under section 12A will be main focus of study and the advantages and disadvantages with respect to this provision in Income Tax Act is the focus of study. The details were called for from focused and general hospitals across the categories of Government, private and charitable hospitals. However Data was obtained mainly from general hospitals as the hospitals consider the details of hospital tariff with the objective of secrecy.