Illegal data access has become prevalent in wireless and general communication networks. There is a need for secure transmission of medical images since telemedicine is increasingly being used. Recently, the use of chaotic signals for secure data transmission has seen significant growth in developing chaotic encryption and decryption algorithms. Moreover, retaining the details of the medical image is particularly important for accurate diagnosis. Hence, in this paper, a secure scheme for medical image transmission is proposed. In this scheme, an enhanced chaotic key based algorithm (ECKBA) is proposed for encryption and decryption and lossless JPEG is used for compression of medical images. Further, the cryptanalysis of the proposed ECKBA is performed. The efficacy of the proposed scheme is illustrated through implementation results on a CT scanned abdomen image of a kidney patient and on MRI image of a patient with brain tumor.