NPS Swasthya: Now, medical treatment will be funded by your pension! Hospital bills will be paid directly from the pension fund..

If you invest in the National Pension System (NPS), this news is relevant to you. Your pension savings can now be used not only for retirement but also to cover medical expenses when needed. Last month, the Pension Fund Regulatory and Development Authority (PFRDA) launched the second Proof of Concept (PoC 2) for 'NPS Swasthya'. Its objective is to enable NPS subscribers to utilize their pension savings for medical needs. Currently, it is being tested on a limited scale.

What is the NPS Swasthya scheme?
NPS Swasthya integrates your retirement savings with healthcare. This means that while saving for a future pension, a portion of the same fund can also be used for medical expenses when required. The new version has been designed to be simpler and more useful than the previous one, ensuring financial assistance for the general public during medical emergencies.

Health insurance is now mandatory.
Health insurance coverage has been made mandatory to participate in this scheme. In other words, anyone wishing to avail the benefits of NPS Swasthya must possess health insurance. The premium for this insurance will be deducted from your pension savings, thereby providing additional financial support during illness.

An initial investment of at least ₹25,000 is required to join NPS Swasthya. Only after this investment can one avail the benefits offered under the scheme.

How much money can be withdrawn for medical treatment?
Under this scheme, subscribers can withdraw up to 25% of their total accumulated amount (Net Eligible Balance) for medical needs. This amount can be used for OPD services, medicines, hospitalization, and other medical expenses. This facility is also available digitally via the MAven app, which is integrated with the Central Recordkeeping Agency system.

What relief is available for critical illnesses? In the event of a serious illness or medical emergency resulting in high hospital expenses, subscribers can withdraw the entire accumulated corpus from their fund for treatment. This facility applies even to accounts with low balances, helping to alleviate the financial burden of sudden, substantial medical costs.

**Funds Transferred Directly to the Hospital**
A key feature of this scheme is that the funds for treatment are transferred directly to the hospital or the relevant service provider. If any amount remains after settling the hospital bill, it is reinvested into the subscriber's NPS account; thus, the surplus funds continue to be part of their retirement savings and earn market-linked returns.

**Which Medical Expenses Are Covered?**
The scope of the 'NPS Swasthya' initiative has been expanded in its second proof-of-concept phase. Coverage now extends beyond OPD services to include hospitalization, inpatient treatment, medication costs, and cashless hospital services.

**Who Can Avail of This Scheme? ****
Any Indian citizen aged between 18 and 85 years is eligible for this scheme. A health declaration is mandatory at the time of enrollment. Currently, it is being implemented as a pilot project for a limited number of people, with the possibility of a wider rollout following a successful trial.

**Which Institutions Are Involved?**
'NPS Swasthya' is the result of a partnership between several institutions. Medi Assist Healthcare Services manages the digital platform and the claims process, while CAMS KRA handles onboarding and KYC requirements. Tata Pension Fund Management and Axis Pension Fund manage the pension funds, and Aditya Birla Health Insurance provides the group health super top-up cover. Medi Assist’s network spans over 15,500 hospitals across 1,264 cities in the country.

**How ​​Many People Have Joined This Medical Protection Scheme?**
Medical treatment costs in India are steadily rising. 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, the NPS and its associated systems have a total of 9.64 crore subscribers, with the total Assets Under Management (AUM) reaching approximately ₹16.55 lakh crore. Thus, NPS Swasthya is poised to integrate retirement planning and health security for millions of people in the future.

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