7th Pay Commission report on Fixed Medical Allowance:

Fixed Medical Allowance – The existing amount of Rs.500 p.m which was raised from 19.11.2014 to continue

The Commission has received representations seeking enhancement in Fixed Medical Allowance, currently payable at the rate of ₹500 per month for pensioners not covered under Central Government Health Service (CGHS).
It is granted to pensioners for meeting expenditure on day to day medical expenses that do not require hospitalization, presently payable at the rate of ₹500 pm. Demands have been received to increase the rate of this allowance to ₹2,000 pm.
Pensioners are not covered under the CS (MA) Rules. Pensioners residing outside CGHS areas are entitled to Fixed Medical Allowance (FMA) @ ₹500 per month for their OPD/IPD needs. Such pensioners can also avail IPD/OPD under CGHS subject to some conditions.
The Commission has received representations seeking enhancement in Fixed Medical Allowance, currently payable at the rate of ₹500 per month for pensioners not covered under Central Government Health Service (CGHS).
Analysis and Recommendations :
The Commission notes that this allowance was enhanced from ₹300 pm to ₹500 pm from 19.11.2014.
As such, further enhancement of this allowance is not recommended.