Security is one of the key aspects in medical application that used to protect the medical image from unauthorized access. In this paper a two level secured medical image encryption scheme is proposed based on permutation and diffusion using Arnold cat map and combined key sequence of Logistic map and Tent map. Entire image encryption process is divided into permutation and diffusion. In permutation process image of size 256×256 pixels are decomposed into block of size 64×64 pixels and then each block is iterated using Arnold Cat Map and combined all iterated blocks to get the confused image of size 256×256 pixels. The obtained confused image is again iterated using Arnold Cat Map to get the Fully Confused Image (FCI). In diffusion process FCI pixels are XORed with combined key sequence {Ki} to obtained encrypted image. To study the performance of the proposed scheme five different gray scale medical images of size 256×256 pixels were chosen. Performance analyses such as (i) Visual Analysis (ii) Histogram Analysis (iii) Correlation Analysis (iv) Entropy Analysis are performed. Result shows histogram plot of the encrypted image is almost flat, correlation between horizontal pairs of adjacent pixels of encrypted image is nearly equal to zero and entropy value is approximately equal to 8. Performance of the proposed scheme is compared with encryption using key sequence of (i) Logistic map alone (ii) Tent map alone.