Pensioners to Receive Health Insurance? Government Preparing Major Announcement

Pension: The central government is gearing up to offer health insurance along with pensions for investors. PFRDA Chairman S. Raman mentioned on Friday that three pension funds are currently working on launching pension schemes that include health coverage for investors’ benefit. These schemes can be provided either through partnerships with health insurance companies or directly with health service providers. Raman noted that this initiative falls under the ‘Health’ pension scheme, which aims to raise awareness about the importance of saving specifically for medical expenses.

What did the PFRDA Chairman say?

He stated, “We want people to grasp the significance of safeguarding themselves. We encourage individuals to save funds in the Medical Pension Scheme. This money will be exclusively allocated for medical needs.” It’s worth mentioning that the PFRDA introduced the “Health” platform in January this year. Under this scheme, up to 30 percent of an investor’s pension can be reserved for medical costs.

Affordable top-up options from health insurance providers

The head of the Pension Fund Regulatory and Development Authority (PFRDA) pointed out that the collective strength of numerous investors in the National Pension System (NPS) enables pension funds to negotiate better deals. This could result in more affordable top-up options from health insurance companies and treatment subsidies from hospitals. He explained that under this scheme, hospitals will receive payments right after a patient’s treatment, while payments from the central government’s health scheme can take months. Raman also mentioned that pension funds backed by ICICI, Axis, and Tata are testing similar health coverage plans, with ICICI set to launch its own product soon.

Plan to invest in gold and silver ETFs

He said that measures are being studied to maintain double-digit returns over a long period of time. For this, there are plans to invest in project finance, real estate, alternative investment funds (AIFs), and limited investments in gold and silver ETFs. Acknowledging the low coverage of NPS (around Rs 1 crore), he said that discussions are underway with the National Payments Corporation of India (NPCI) to expand the investor base and accelerate digital onboarding. Raman also said that at least four banks or groups of banks have expressed interest in entering the pension fund business. These include Axis Bank, Union Bank of India, Indian Bank, and Star Daiichi Group.

As investment in the stock market has increased, investment in corporate bonds has declined slightly, while the proportion of investment in government securities (GSECs) has remained roughly the same. This change was made because it is expected that interest rates on government bonds may decline in the long term. Therefore, the regulator is considering new investment options to maintain better returns.