The Insurance Regulatory and Development Authority of India (IRDAI), the regulatory body for the insurance sector, has made it mandatory for all health insurance policies to include coverage for mental illness starting from October 1, 2022.
Despite this progressive step, the positive impact of this directive about mental health insurance in India has not yet fully reached the policyholders.
Experts point out various challenges hindering the widespread adoption of mental health insurance in India, with one significant obstacle being the lack of awareness among policyholders.
Surprisingly, the number of people suffering from mental health issues in the country is on the rise, with the World Health Organization (WHO) reporting that one in every three Indians experiences depression.
To address these issues, IRDAI formed a five-member committee consisting of medical professionals and insurers in May to offer guidance and ensure comprehensive protection for policyholders regarding mental health coverage.
The initiative to include mental health coverage in insurance policies is not entirely new. As far back as 2018, the Mental Healthcare Act, 2017 had been enacted, stating that insurers should provide medical insurance for the treatment of mental illness on par with physical illness.
However, both insurance companies and policyholders have been slow in embracing this provision, leading to a public interest litigation (PIL) alleging companies’ violation of the Act. Until the onset of the COVID-19 pandemic, the growth of mental health insurance in India had been sluggish and uneven.
The COVID-19 pandemic served as a wake-up call not only for the general public but also for the health insurance industry worldwide, including India. According to a WHO report, the pandemic created a global mental health crisis, giving rise to short and long-term stressors that affected millions of people’s mental well-being.
In the post-COVID era, the prevalence of mental disorders increased by 25 per cent, as estimated by the WHO. In India, 10.6 per cent of adults required immediate treatment and intervention, as reported by NIMHANS. Experts emphasize the need to destigmatize mental health issues and treat them on par with any other medical condition.
In response to the alarming growth in mental health issues during the pandemic, IRDAI took a significant step by mandating that all health insurance products should cover mental illness from October 1, 2022, and comply with the provisions of the MHC Act, 2017, without deviation.
However, only a few insurers followed this order, prompting IRDAI to issue another directive in March to encourage broader compliance. This led to the formation of the aforementioned committee in May, comprising medical professionals and insurers, tasked with providing further insights and guidance on mental health insurance in India.
Why Policyholders Should Carefully Skim The Insurance Clauses About Mental Health In India
The stigma surrounding mental health issues is a major deterrent for customers to purchase mental health policies. Additionally, the inadequate availability of mental health services and funding affects the quality of care provided to policyholders.
Currently, there are no standalone mental health policies in India, and existing health insurance policies may have limitations and ambiguities in covering mental health conditions.
Policyholders seeking mental health coverage should carefully read the fine print to understand the coverage and exclusions. Many policies have waiting periods before they become effective, and coverage for outpatient treatments is essential since hospitalization is often unnecessary for mental health conditions.
To overcome the challenges of low awareness and limited adoption, it is crucial for insurance companies, policymakers, and the general public to work together. Raising awareness about mental health insurance in India and its benefits can help destigmatize mental health issues and encourage people to seek appropriate coverage.
Insurance companies need to actively promote and offer mental health insurance as an integral part of their policies, ensuring that policyholders are well-informed about the coverage and benefits available to them.