Mental Illness Insurance Coverage in India

A Step Towards Breaking Stigma

In a significant and historic move the Insurance Regulatory and Development Authority of India (IRDAI), has issued a directive to insurers in India to provide health insurance for mental health. The IRDAI has ordered “all insurance companies to comply with the aforesaid provisions of the Mental Healthcare Act, 2017 with immediate effect.”

For a long time in India, health insurance coverage in India did not include the treatment of mental illnesses like psychological disorders. Only physical health problems were covered. But things have changed. In recent years, mental health problems are being more openly discussed. People are speaking up and sharing their experiences, which has made more people aware of the importance of mental well-being. The rising awareness about mental well-being has paved the way for a brighter, more inclusive insurance landscape.

IRDAI’s directive comes after the Mental Healthcare Act, 2017, came into force on May 29th 2018. The Mental Healthcare Act, under its ‘Rights to equality and non-discrimination’, Sec. 21 (4) specifies that “Every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness.”

This mental health insurance is aimed at treating mental health concerns on par with physical illnesses, thereby ‘normalising’ the diagnosis and treatment of mental illness and providing awareness on mental health. The mental health insurance coverage would also enable access to qualified mental health professionals and increase accountability. 

While approximately 57 million Indians suffer from depression as of 2017, India spends only 0.06% of its health budget on mental healthcare. The health insurance sector has seen a double figure growth in the last two years. The implementation of the insurance policy marks a step towards recognising the need for mental health care by providing coverage for treatment and care for People with Mental Illnesses (PWMIs). 

The Mental Healthcare Act, 2017 states that the insurance companies and its directors are liable for legal action under violation. The Act also notifies a period of a prison sentence for the violation under its Section 108. The Act states: 

“Any person who contravenes any of the provisions of this Act, or of any rule or regulation made thereunder shall for first contravention be punishable with imprisonment for a term which may extend to six months, or with a fine which may extend to ten thousand rupees or with both, and for any subsequent contravention with imprisonment for a term which may extend to two years or with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees or with both.” 

Issues like a lack of scientific data to compute the premium rates for mental disorders or the fact that diagnostic classifications and manifestations of mental illnesses are different in different cultural contexts, have kept mental disorders out of the purview of insurance in India. Mental health professionals and activists believe that despite a law in place and the guidelines from IRDAI, the implementation may still prove to be a challenge. For example, there is a lack of clarity on the coverage of illnesses. 

The Mental Healthcare Act 2017 supersedes the previous Bill passed in 1987. The Act shifted from the crime-based approach to a rights-based approach, primarily focusing on protecting the rights of PWMIs at the time of diagnosis and treatment. This insurance scheme, specifically, will reduce the financial burden and increase mental health literacy among Indians. 

But different insurance plans have different mental health insurance coverages. Some plans only pay for hospital stays, while others also cover costs for appointments and therapies outside the hospital.

Generally, insurance for psychological disorders helps pay for things like hospital stays, appointments, tests, medicines, therapy, counselling, and more. It depends on the plan you choose. Hence, policyholders are advised to read the policy documents thoroughly to understand the exact coverage available and make a well-educated choice on the insurance plan they would prefer.

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