Mental health insurance in India

The COVID-19 pandemic has had a widespread impact on day-to-day lives and has adversely affected many people’s mental health. According to a survey by the Indian Psychiatric Society, of 1,685 participants, 40% were suffering from common mental health disorders such as anxiety and depression, due to the pandemic¹. This increase in mental illnesses is a cause of worry, both socially and economically for the country. Economically, lost productivity as a result of mental disorders could cost the nation more than $1 trillion between 2012 and 2030, estimates the World Health Organisation (WHO)².

Many mental health conditions can be effectively treated. However, mental healthcare is not easily available and affordable in India. The government tried to address accessibility and affordability by bringing in regulations. In 2017, the government enacted the Mental Healthcare Act (MHCA). Prior to 2017, there was no regulation for mental illness treatment coverage. As a result, insurance policies excluded mental healthcare coverage. The act mandates all insurers to provide health insurance for mental health on the same lines as physical health. This means that any claim for mental illness requiring inpatient treatment must receive the same treatment as a claim for any physical illness. In accordance with the MHCA, the Insurance Regulatory and Development Authority of India (IRDAI) issued a circular on insurance coverage to persons with disability (PWD) and people affected with AIDS/HIV and mental illness in June 2020. The circular directs insurers to evolve a health insurance underwriting policy covering approach and aspects relating to offering health insurance coverage to PWD and people affected with AIDS/HIV and mental illness. IRDAI has also directed insurers to comply with the various provisions of the HIV and AIDS Prevention and Control Act, 2017 and the Mental healthcare Act, 2017.

To adhere to the IRDAI guideline, some insurers have included mental health cover for hospitalisation in their health insurance policies. Some employers have also begun taking cognisance of this growing need and have included mental health cover as part of their group medical policy. However, accessibility and affordability are still a challenge as most of these covers come with their own sub-limits. For instance, most policies do not cover non-hospitalisation or outpatient treatments. Insurers are putting other controls in place to protect themselves from unknown risks such as tightening underwriting rules for applicants with pre-existing mental health ailments. While the industry is taking baby steps to address the unmet need for mental healthcare, a lot more needs to be done to ensure people get the care they need.

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