The insurance industry regulator, the Insurance Regulatory and Development Authority of India (IRDAI), has required all health insurance policies to cover mental illness from 1 October 2022. However, the benefits of this directive have not yet passed on to the police. incumbent.
The challenges are manifold, including a marked lack of awareness among policyholders, due to which mental health insurance has not taken off in India, experts say. And this despite the fact that the number of people suffering from mental health problems (WHO reported that 1 in 3 Indians suffers from depression) is only increasing in India.
After the lukewarm response to its instruction to insurance companies, IRDAI in May formed a five-member committee comprising medical professionals and insurers, with the aim of “providing advice and information on coverage in mental health and ensure full protection of policyholders”.
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In 2018 itself, the Mental Health Act 2017 was enacted, stating that “every insurer must provide medical insurance for the treatment of mental illness on the same basis as is available for the treatment of physical illness”.
But this has not yet caught on, either on the side of the insurer or on the side of the insured. So much so that a Public Interest Litigation (PIL) has been filed in the Supreme Court, claiming that the companies are violating the provisions of the law. The growth of mental health insurance in India has followed what can be described as a staggered trajectory, with little progress until the outbreak of COVID-19.
Increase in post-COVID mental disorders
The pandemic has been a wake-up call for the layman and the health insurance industry not only in India but across the globe. Among its many impacts, COVID-19 has created a global mental health crisis, fueling short- and long-term stresses and undermining the mental health of millions, according to a WHO report.
According to WHO estimates, after COVID, there was a 25% increase in the prevalence of mental disorders. In India, 10.6% of adults require immediate treatment and intervention, according to NIMHANS. “It’s time to put the mental health stigma behind us and tackle it like any other medical condition,” says Yateesh Shrivastava, an industry professional.
The increase in cases of mental health issues during the pandemic has prompted IRDAI to require all health insurance policies to cover mental illness from October 1, 2022 without any deviation,” he said. .
However, this order was only followed by a few insurers, prompting the regulator to issue another order in March this year, followed by the establishment of the committee in May.
First, at the micro level, the stigma that accompanies mental health issues is a major deterrent for customers to consider purchasing these policies as well.
Talk to The Federal, an insurance provider in Mumbai, says: “A problem for mentally ill clients is that they are reluctant to submit bills from psychiatrists or counselors to claim the sum insured, due to the stigma that comes with it. This forces them to pay heavy personal expenses.
For depression – one of the most common mental disorders – treatment largely includes expensive medication and weekly therapy/counseling sessions. The cost of each session ranges from ₹1,500 to ₹2,000 per hour, and the average monthly drug cost ranges from ₹1,000 to ₹1,500.
On top of that, policies covering mental health have inadequate services and funding. About half of the world’s population lives in countries where there is only one psychiatrist to serve 2 lakh or more people. On average, countries spend less than 2% of their health budget on mental health, according to the report. This greatly affects the quality of services offered to policyholders.
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Currently, there are no stand-alone mental health policies in India. Health insurance companies provide coverage for a variety of mental disorders, such as post-traumatic stress disorder (PTSD), bipolar disorder, depression, schizophrenia, and anxiety, among others. Dementia, anxiety disorders, obsessive compulsive disorders, psychotic disorders, etc. are also covered unless certain specific exclusions are mentioned in the policy.
Insurers offering mental health insurance in India may need to rework their calculations. For example, existing customers currently do not have the option to purchase a Sanity Refill.
In the insurance industry, companies usually have a fixed premium charge for previous medical conditions, which can be a problem in the case of mental illness insurance. Also, in some cases, there may be more than one diagnosis. Some illnesses – such as recurrent depression, bipolar disorder and schizophrenia – require lifelong treatment involving high costs.
Read the fine print
For customers looking for mental health coverage in their health policies, reading the fine print is essential, as coverage varies from plan to plan. When choosing a health insurance policy, it is important to carefully consider the coverage offered, especially when it comes to mental health conditions and treatments. The same rule applies to conditions that are excluded, such as those triggered by substance abuse.
Second, policyholders should be aware that many mental illness insurance policies in India have a waiting period before taking effect. Most claims can only be made after a two-year waiting period. It should be noted that insurance companies cannot reject new policy applications from people with mental illness, and claims will also be admissible if policyholders develop mental illness after purchasing the policies.
Most mental health treatments involve expensive therapy and counseling sessions by experts. Since these conditions primarily require treatment in OPDs (outpatient departments), clients should ensure that the health insurance product covers the OPD component.
“Clients should look for OPD coverage in their health plans because hospitalization is largely unnecessary in mental health conditions, and consultation fees and medications make up the bulk of the costs. Treatment caps in the OPD can also be a deterrent, as this is a major cost component,” says Shrivastava.
If the client has taken out OPD coverage, the costs for medical consultations, diagnostic tests, etc. will also be covered by the insurer.