NPS Swasthya: If you are investing in the NPS, this news could be very significant for you. Your pension savings are no longer just for retirement; they can now also be used to cover medical expenses when the need arises. Notably, the PFRDA launched the second ‘Proof of Concept’ for NPS Swasthya last month. Its objective is to enable NPS subscribers to utilise their pension savings for medical needs. It is currently being tested on a limited scale.

What is the NPS Swasthya scheme?

NPS Swasthya integrates your retirement savings with healthcare coverage. In the future, in addition to accumulating pension savings, a portion of the same fund can be used to cover medical expenses. The new version has been designed to be simpler and more useful than the previous one, ensuring that the general public can receive financial assistance during medical emergencies.

Health insurance is now mandatory

To participate in this scheme, health insurance coverage is mandatory. This means that anyone wishing to avail the benefits of the NPS Swasthya scheme must possess health insurance. The premium for this insurance will be deducted from your pension savings, providing extra financial support during times of illness. An initial investment of at least ₹25,000 is essential to join NPS Swasthya. Only then can one avail the benefits offered under this scheme.

How much money can be withdrawn for medical needs?

Under this government scheme, subscribers can withdraw up to 25% of their total accumulated corpus for medical requirements. These funds can be used for OPD visits, medicines, hospitalisation, and other medical expenses. This facility is also available digitally via the MAven app, which is integrated with the Central Recordkeeping Agency (CRA) system.

Relief for Serious Illnesses

If hospital expenses become exorbitant due to a serious illness or medical emergency, subscribers can withdraw the entire amount from their fund to cover treatment costs. This facility applies even to accounts with low balances, helping to alleviate the burden of heavy medical expenses.

Funds Transferred Directly to the Hospital

A key feature of this government scheme is that the treatment funds are transferred directly to the hospital’s account. If any amount remains after the hospital bill is fully settled, it is credited back to your NPS account, meaning the surplus funds remain available for your retirement.

Which Medical Expenses Are Covered?

The scope of the ‘NPS Health’ proof-of-concept has expanded significantly. Coverage now extends beyond just OPD services to include hospitalisation, inpatient treatment, medication costs, and cashless hospital services.

Who Can Avail of the Scheme?

Any Indian citizen aged between 18 and 85 years can benefit from the NPS scheme. A health declaration is mandatory at the time of enrollment. Currently, it has been launched as a pilot project for a limited number of people; following a successful trial, it may be implemented on a larger scale.

Participating Institutions

Several institutions are involved in ‘NPS Health’. Medi Assist Healthcare Services manages the digital platform and claims processing, while CAMS KRA handles onboarding and KYC. Tata Pension Fund Management and Axis Pension Fund manage the pension funds. Additionally, Aditya Birla Health Insurance provides ‘Group Health Super Top-up’ coverage. Medi Assist’s network spans over 15,500 hospitals across 1,264 cities in the country.

Current Enrollment

It is worth noting that medical treatment costs have risen sharply due to inflation. Industry estimates suggest that healthcare costs could rise by 11.5% to 14% by 2026. Against this backdrop, the objective of ‘NPS Swasthya’ is to provide a facility where retirement savings can also serve as a medical safety net when needed.

As of March 29, 2026, NPS and its associated systems have a total of 9.64 crore subscribers, with the total assets under management reaching approximately ₹16.55 lakh crore. Thus, NPS Swasthya is working to integrate retirement and health security for millions of people.

Conclusion

The NPS Swasthya pension scheme represents a significant initiative towards combining pension planning with health security. Launched by the PFRDA, this system aims to enable NPS subscribers to utilise their pension savings not only after retirement but also during medical emergencies. Under the scheme, eligible subscribers can transfer funds from their regular NPS account to a health account up to a specified limit, withdraw up to 25% of their contributions for medical expenses, and—in the event of a critical illness—access the entire corpus subject to prescribed conditions.