Finally You Have Health Insurance for Mental Illness

World Health Organization conducted a study in 2015 on Mental Illness in India. The statistics revealed that one in five Indians suffer from depression. But only 10-12% of these seek help. A further survey done by the National Health Programme of the Ministry of Health & Family Welfare has stated that 6% of the population in Kerala suffers from mental health.  Close to 60 to 70 million people in the country suffer from common and severe mental disorders.

Mental Health

One of the scary revelations in these studies is that India has a high number of suicide cases. As per the report, more than 2.5 lakh cases are reported in a year. WHO statistics put the average suicide rate in India at 10.9 for every lakh people.

There are many reasons for the growing cases of mental illness issues leading to suicidal deaths.  Majority of them can be attributed to ignorance by society, lack of medical professional and inadequate health insurance to cover the cost of treatment. Among this absence of health insurance is a high contributor to the growing cases of suicides. In the absence of good health insurance coverage, the person with mental illness does not get a good treatment which is required.  The prolong treatment cost for a middle-class family is beyond their means. Since health insurance is not available many families end up disowning mentally ill dependent due to the financial burden it causes.

The passing of Mental Healthcare Act 2017 paved the way of providing health insurance to mental illness. The act mandated that “every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for the treatment of physical illness.” Post this IRDA in August 2018 directed all insurers to comply with the act provisions. Since then, as stated by the Finance Minister, Public sector insurers together have given mental health insurance to 1 lakh people.

The Mental Illness Health Insurance Policies

Since it’s a beginning and companies were complete excluding mental illness in their polices it’s yet to be seen how the products are relaunched. There are many aspects to look at to identify what features will these products carry.

Who Will Define Mental Illness?

Firstly and the good part is that the insurance companies will not define mental illness. Rather what stated in the Mental Healthcare Act 2017 will be the definition of giving health insurance. The act define mental illness as ” substantial disorder of thinking, mood, perception, orientation or memory that grossly impairs judgment, behaviour, capacity to recognise reality or ability to meet the ordinary demands of life, mental conditions associated with the abuse of alcohol and drugs, but does not include mental retardation which is a condition of arrested or incomplete development of mind of a person, especially characterized by subnormality of intelligence.”

More on the act can be read here –

Mental Healthcare Act 2017

If you read the above definition then it excludes mental retardation and includes abuse of drugs and alcohol. It is yet to be seen whether insurance companies include this aspect or put it under the exclusion.  Further to this even halfway 2019 and we have not yet seen new revamp products from health insurers to cover mental illness. What specific exclusions it has and what waiting periods they apply is still awaited.

The Cost Of Treatment

The other aspect is the cost. In general, for any therapy sessions with psychiatrist anything between Rs 1500-Rs 2000 per session may be spent. Then there is the cost of medicines and hospitalization expenses.  In case of hospitalization during mental illness, the health insurance coverage will include analysis and diagnosis of a person’s mental condition and treatment as well as care and rehabilitation of such person for his mental illness or suspected mental illness. As in any health insurance product, The 24-hour mandatory hospitalization is to be a part of this healthcare process too.

Pre-Existing or Not

The last aspect to be noticed is that who will get coverage in what segment. Diagnosed with any mental illness after the policy is bought is still covered today though with limited extent. This pertains to mainly Psychiatric and Psychosomatic conditions. But if a person is already suffering from such situations then insurance companies will primarily treat it as preexisting illness. All pre-existing illness coverage in health insurance policies has waiting periods and limitations too on the claim. Will coverage for mental illness falls in the same category is what needs to be seen.  If it does then what waiting periods apply and what is permanently excluded will make a lot of difference on the claim a person can receive.

Insurance Eagerly Awaited

Finance Minister in her statement also said that up till now there are some 110 products approved by IRDA to cover mental illness. These products have to be yet come out in the market. It’s expected that both public sector companies and private companies will start providing insurance for mental health illness. With this number of health insurance policies covering mental illness, it will be a benefit for the 70 million people suffering from some kind of mental disorders.

About the Author

Jitendra P.S. Solanki

Jitendra is a SEBI Registered Investment Adviser (INA10000184) and has earned the much-respected professional designation of Certified Financial Planner (CFPCM ) and Chartered Trust & Estate Planner (CTEPTM). He is a post graduate from IIT - Roorkee and has spent 15 years in Financial Services Industry working with leading financial institutions & Banks, advising families on their Financial well-being. Jitendra specializes in advising families with special needs children on various financial & legal aspects.

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