Status check: Do health insurance companies in India cover mental health?

Health insurance providers are mandated by law to provide coverage for mental health, but there is still a long way to go.

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In 2017, the government passed the Mental Healthcare Act that mandated mental health to be covered by insurance companies. The Act, which came into effect last year, finally promised mental health coverage, and stated that every insurer will have to make a provision for medical insurance to cover treatment of mental illness “on the same basis as is available for treatment of physical illness”.

The National Mental Health Survey of 2015-16 conducted by NIMHANS estimated that nearly 150 million Indians were in need of active intervention for mental disorders. In April 2018, when TNM did a check on some of the top insurance companies that covered mental illnesses, none of them had any such plans on offer.

However, after the Act was passed, the Insurance Regulatory and Development Authority of India (IRDAI) made it mandatory in August 2018 for insurance companies to include mental illnesses in their offerings.

One year later, TNM did another round of checks to see if companies have begun to offer plans that cover mental health. The only plan that explicitly has any mention of covering mental health is a plan by HDFC ERGO, which states that expenses for hospitalisation would be covered in case of an illness. Anurag Rastogi, Chief Actuary and Chief Underwriting Officer at HDFC ERGO, says that persons are asked questions about their pre-existing mental illnesses when they opt to buy a policy. “If the person has any history of mental illness, in such cases the insurer may offer him/her a health insurance policy with sub-limits on the sum insured or offer a new product which may be specifically designed to cover mental illnesses,” Anurag told TNM.

A Max Bupa salesperson said that one policy did cover mental illnesses on hospitalisation after four years, which would be upto 10% of their total cover in the event that they were hospitalised. This information was given when TNM made an enquiry on its helpline. However, no such policy document could be found online. TNM has reached out to Max Bupa for an official comment. This story will be updated when they respond.

Star Health & Allied Insurance Co. Ltd didn’t have any such policies on offer that covered mental illness. Anand Roy, the Joint Managing Director of the company, said that the company has plans to include mental illnesses in their products. The company has made an addition of psychiatric and psychosomatic disorders, for which it is awaiting regulatory approval.

“If the insured person is diagnosed with psychiatric or psychosomatic disorder for the first time and hospitalised for a minimum period of five consecutive days under this policy, then the company will pay hospitalization expenses up to the sum insured. This cover is provided to the insured person who has held this policy for 2 years or more. The treatment should be taken at an authorised psychiatric hospital licensed by a mental health authority or any similar authority of central or state government or union territory,” Anand said.

Sanjay Datta, Chief Underwriting, Claims and Reinsurance, ICICI Lombard says that in existing plans which cover the complete wellbeing of the customer, both inpatient and outpatient treatment is covered as per policy terms and conditions. “We inquire from the customer regarding their complete wellbeing while issuing the policy and if mental disorder is disclosed, the risk is assessed as per the underwriting guidelines and decision is taken accordingly.”

Industry sources say that all companies are still in the process of reworking policies that incorporate mental health because of the insurance regulator’s mandate. An industry veteran told TNM that companies are still finding their ground when it comes to building policies around mental health. “Even when offered to company employees, it would be an inclusion in the overall policy given to employees. But insurance companies too, are still in the process of figuring out how to formulate policies centred around mental health. It’s still a new concept for them. But since its mandated by IRDAI, companies will have to come around soon,” she said.

Amit Chhabra, the head of health insurance at insurance aggregator Policybazaar echoed a similar view. He says that companies are incorporating mental illness coverage into their products but says that it takes time for companies to refresh their policies and get regulatory approval.

Amit added that a large change such as this would take time to be communicated across all stakeholders and would take place over a time period.

ICICI Lombard’s Sanjay adds that mental disorders are still a taboo in the country and the customers don't disclose it at the time of policy inception. It therefore becomes difficult to identify the type of disorder and risk associated with it to self and the society at the initial stage.

Insurance companies currently have no precedent with regard to the pricing of policies that cover mental health as well, or understanding the financial risk that the companies will undertake.

This was echoed by Amit, who said that companies do not have the kind of experience to know how many claims would come in for mental illness and what kind of severity that policy would see.

“Mental illness is now starting to get covered and coverage will improve slowly over time. It takes time for the adoption of any new type of coverage and make it extensive,” he added.

On September 27, the IRDAI issued a new set of guidelines for insurance companies that standardised exclusions across insurance providers. These guidelines stated that the treatment of mental illnesses, stress, psychological and neurodegenerative disorders could not be excluded. Another guideline of the IRDAI also stated that health insurance products should cover all pre-existing diseases as disclosed by the person after 2 years or lower as stipulated in the product.

While multiple companies are in the process of adhering to these guidelines and including mental illnesses in their policies, it may be a long time before we see actual change.