Insurance for Mental Healthcare: IRDAI asks insurers to provide cover for mental illness

New Delhi, August 18, 2018: After over a year from passing of the Mental Healthcare Bill 2016 and more than two months since it came in force, the Insurance Regulatory and Development Authority of India (IRDAI) has asked all insurance companies to make provision to cover mental illness as well. Will this directive from the insurance regulator enhance the access, affordability and coverage of mental health services and insurance?

In a notification, the insurance regulator says, “As per Sec 21(4) of the said Act, 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. All insurance companies are hereby directed to comply with the aforesaid provisions of the Mental Healthcare Act, 2017 with immediate effect.”

At present, the health insurance schemes available in India either do not cover or exclude coverage for any mental illness, psychosomatic dysfunction, or problems connected to psychiatric conditions. World over there have been notable progress in providing insurance coverage for mental health, especially post World War II. Yet, non-coverage for mental health or illness have remained a glaring exception on Indian health insurance business.

A countrywide study conducted by National Institute of Mental Health & Neurosciences (Nimhans) in 2014-2015 had revealed a shocking prevalence of mental illness in India. As per the study, at least 13.7% of India’s general population has been projected to be suffering from a variety of mental illnesses and 10.6% of this requires immediate intervention. In all, about 150 million Indians are in a need of active medical intervention, according to the study according to reports published in moneylife.in

A study on ‘How India Perceives Mental Health: TLLLF National Survey Report 2018’ commissioned by The Live Love Laugh Foundation (TLLLF) reveals, due to the stigma associated with mental illness, a lack of awareness, and limited access to professional help, only 10-12% of these sufferers from India will seek help.

However when it comes to insurance coverage for mental health, there are report in which insurers fear about increase in costs. Speaking with The News Minute, Sanjay Dutta, Chief Underwriting Reinsurance & Claims at ICICI Lombard, had claimed that one of the reasons for this is that the market for health insurance is still focussed on inpatient care. “Most mental health treatments currently are done on an outpatient basis and the market is yet to evolve to accommodate this. However, if there are inpatient treatments for mental health problems, not too many places of expertise are currently available for treatment. When there are more such places, market too will grow to accommodate the needs. In the future companies are sure to cover mental health illnesses,” he told the portal.

However, the claim about increase in cost for mental healthcare has long been refuted by researchers. In a 2016 research paper titled, ‘Health insurance for mental health in India:

A welcome step toward parity and universal coverage’, RD Pattanayak and R Sagar clearly stated that there was no evidence to justify the basis of the ‘cost increase’ fear. “Evidence from an economic review indicated that mental health benefits expansion did not lead to any substantial increase in cost to health insurance plans, measured as a percentage of premiums. In fact, the overall increased cost has not been demonstrated in any of the US states that have adopted full parity. Some places even showed a decrease in overall insurance costs when mental health parity was enacted, which can be due to people receiving treatment earlier in their illness when it is less costly and typically did not require hospitalization,” the research paper says.

The mental health insurance coverage will certainly facilitate medical care for mentally ill and improve their outcomes that would benefit the society over the long-term.