The government’s Fixed Medical Allowance (FMA) for pensioners residing in non-CGHS-covered areas has been a topic of discussion, especially with rising healthcare costs. While many have anticipated an increase in the allowance, recent statements from the Ministry of Health and Family Welfare (MoHFW) suggest that no such proposal is currently under consideration. Despite growing demands from pensioners for a higher medical allowance, the government has maintained that the current rate of Rs. 1,000 per month remains unchanged. Additionally, discussions around the 87A rebate and tax benefits for pensioners are also gaining attention as retirees seek financial relief.
Current status of fixed medical allowance (FMA)
The FMA was introduced to provide financial assistance to central government pensioners who do not have access to CGHS facilities. This medical allowance is meant to cover routine outpatient medical expenses, helping pensioners manage their healthcare costs independently.
Currently, the FMA stands at Rs. 1,000 per month, an amount last revised based on the recommendations of the Central Pay Commission. Given the rising cost of medical services, many pensioners and financial experts argue that this amount is insufficient. However, the government has reiterated that there are no immediate plans to increase the allowance.
Government’s response to calls for an increase
During a recent parliamentary session, T R Baalu, a Member of Parliament, inquired about whether the government intends to raise the FMA for pensioners not availing of CGHS benefits. The Ministry of Health and Family Welfare responded, stating that there is no proposal to revise the allowance at this time.
Minister of State for Health and Family Welfare, Prataprao Jadhav, clarified in Parliament on December 6, 2024, that the government is focused on maintaining the existing structure of the FMA and has not proposed any increase. He also highlighted that pensioners residing in non-CGHS areas have alternative options for healthcare coverage.
Alternative healthcare options for pensioners
Pensioners who do not have access to CGHS facilities can explore other alternatives provided by the government to manage their healthcare needs. These include:
- Opting for CGHS benefits in a nearby city – Pensioners can register themselves in a CGHS-covered city by paying the required subscription, allowing them to avail both outpatient (OPD) and inpatient (IPD) healthcare services.
- Combining CGHS and FMA benefits – Pensioners who choose to receive the FMA for OPD treatments can still avail CGHS inpatient services by enrolling in the scheme.
- State health schemes and private insurance – Some pensioners may opt for state-sponsored health schemes or private health insurance to supplement their medical expenses.
Despite these options, many pensioners argue that the FMA should be revised to reflect the increasing cost of healthcare, especially for those who rely solely on this allowance.
Comparison with other government healthcare schemes
The FMA is significantly lower compared to other government-sponsored healthcare benefits. For instance, Ayushman Bharat provides a much higher coverage limit for beneficiaries under its scheme. Similarly, the Central Government Health Scheme (CGHS) offers comprehensive healthcare coverage, which is not accessible to pensioners residing in non-CGHS areas.
While the government has expanded CGHS facilities in recent years, many pensioners residing in rural and semi-urban areas still lack access to these services. This has led to increasing calls for the revision of the FMA to better support retirees who depend on this allowance for their medical needs.
Tax benefits for pensioners and the role of the 87A rebate
One of the key financial relief measures available to pensioners is the 87A rebate, which provides tax benefits to individuals with lower income levels. Under this provision, pensioners earning up to Rs. 7 lakh annually in the new tax regime can avail of a tax rebate, effectively reducing their tax liability to zero.
The government has been urged to extend the 87A rebate threshold further to accommodate rising living costs for retirees. If implemented, this could provide significant relief to pensioners who are already burdened by medical expenses. Experts argue that increasing the 87A rebate limit would help pensioners retain more of their income while managing their healthcare needs more effectively.
Expected impact of increasing the medical allowance
If the government decides to revise the FMA in the future, it could provide several benefits to pensioners, including:
- Better financial support for medical expenses – A higher FMA would help pensioners cover essential healthcare costs, reducing their out-of-pocket expenses.
- Encouragement for preventive healthcare – With an increased allowance, pensioners may be more inclined to seek regular medical check-ups, leading to early detection and treatment of health conditions.
- Reduction in healthcare burden on families – Many pensioners rely on financial support from their families for medical expenses. A revised FMA would alleviate some of this burden.
Additionally, the extension of the 87A rebate could provide further financial stability to pensioners by reducing their overall tax liabilities and ensuring they have more resources to manage healthcare expenses.
Will the government reconsider the decision?
Although the government has stated that there is no current proposal to increase the FMA, there is still hope for a revision in the future. Given the rising demands from pensioners and financial experts, the government may take a closer look at this issue in subsequent policy discussions.
Several pensioners’ associations and advocacy groups have been urging the government to revise the allowance in line with inflation and healthcare costs. If these demands gain momentum, the government may reconsider its stance and announce revisions in upcoming budgets or policy updates.
Conclusion
The Fixed Medical Allowance remains a crucial component of financial support for pensioners not covered under CGHS. While the government has stated that there are no immediate plans to increase the allowance, the demand for a revision continues to grow. Pensioners and advocacy groups are expected to continue pushing for higher benefits, particularly in light of increasing medical expenses.
As healthcare costs continue to rise, a reassessment of the FMA and the 87A rebate will be necessary to ensure that pensioners can manage their medical expenses without financial stress. While alternative healthcare options exist, many retirees still depend heavily on the FMA, making an increase in the allowance and tax benefits a key area for future policy discussions.
