Gaping holes in mental health insurance adding to distress of patients & kin

Gaping holes in mental health insurance adding to distress of patients & kin


What is common between a teenager struggling with bed-wetting issues, a woman suffering from premenstrual syndrome or an individual undergoing gender reassignment surgery? Their hospitalisation is unlikely to be fully or partially covered by most health insurance policies. A schizophrenic person hospitalised for treatment of Covid can face rejection of coverage under health insurance.

As World Mental Health Day dawns on October 10, mental health professionals are still rueing the inadequate health insurance coverage for those suffering from mental ailments. It has been over a year since the regulator, Insurance Regulatory and Development Authority (IRDA), pursuant to directions from the Supreme Court in June 2020, made it mandatory for health insurers to include mental health treatment under scope of coverage.

“No psychiatric illness is covered under health insurance policies,” said Indore-based psychiatrist Manish Jain. “The poor patients have to be directed to ill-equipped government hospitals,” he added.

The Centre’s health insurance scheme, Ayushman Bharat, too does not cover mental health treatment at private hospitals.

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According to psychiatrists, 50-75% of hospitalisation claims filed for insurance coverage are found to be rejected.

“Lack of awareness among patients, their family members and insurance agents lead to claims not being filed on the belief that they shall be rejected,” said psychiatrist Ashutosh Singh of Apollo Hospital. “Alcohol-related medical problems are not included in the order that makes insurance coverage compulsory for mental illnesses,” he said.

“The chronicity of mental health ailments warrants a insurance coverage,” said psychiatrist Samir Parikh, director, department of mental health and behavioral sciences, Fortis Healthcare.

“Around 30% of the insurers in India, including ICICI Lombard, Digit and Care Health, have baked in these covers in their health insurance policies,” said Abhishek Poddar, cofounder at Plum Health Insurance, a Bengaluru-based health insurance startup.

Limited Cover for Mental Health Issues

“That said, the challenge still exists that these covers come with their own sub-limits. A ₹5 lakh cover, for instance, will only cover up to ₹50,000 for mental illness,” said Poddar of Plum Health Insurance.

Besides, there are a host of ailments that end up being excluded from coverage due to their association with mental health. “An insurance claim is rejected in a medical treatment if a psychiatrist visits the patient in corporate hospitals,” said Amar Shinde, a Pune-based psychiatrist. “So, many patients are not given psychiatrist references.”

“While insurers cannot anymore decline hospitalisation reimbursements arising out of mental health-related treatments, as specified by IRDA, they can introduce limits or have forced waiting periods, where policy clauses specify that a customer cannot claim for mental health hospitalisation for, say, the first four years of coverage period,” an executive working with an insurance brokerage said.

Insurance companies ET contacted didn’t want to comment on record. An insurance executive pointed out that currently, no insurance company offers standalone health insurance covers. All comprehensive covers must cover mental health ailments as well by design.

However, insurers in India seldom offer policies that cover non-hospitalisation treatments or OPD reimbursements. This means that unless mentally ailing patients get hospitalised, they won’t be eligible for coverage. Insurance covers, thus, naturally exclude therapy and psychiatric counselling coverages.

Work in Progress

Mental health insurance is at a very nascent stage in India. Till a couple of years ago, none of the insurers were offering any support, as everyone was trying to understand the ground realities,” said a senior executive at a private sector health insurer. “This is a challenging business for insurance companies as definitions and treatment protocols are yet not fully standardised in India, but it is heartening to see that we are slowly starting conversations around this.”

Experts also said that in line with strict IRDA rules, health insurers have tightened their underwriting rules for anyone declaring pre-existing mental health ailments. For instance, those with conditions such as depression, anxiety, or even a condition like epilepsy, are less likely to have their health insurance applications approved.

According to an industry expert, the reason for such discrimination is also because insurers take the view that patients of mental ailments are also more susceptible to hospitalisation. “For instance, insurers have models that suggest that those predisposed to epilepsy are more prone to road accidents, and those with depression or hyperanxiety are more likely to incur self-inflicted harm,” the expert said.

According to Mahavir Chopra, founder of Beshak.org, a community platform for insurance awareness in India, insurers are also mandated by IRDA to publish on their website their board-approved underwriting philosophy for offering insurance coverage to people with disabilities and those affected with mental illness and HIV/AIDS.

“Customers find the language and communication used by some insurers to be ambiguous,” he pointed out. “Insurers are complying with rules, but transparency remains an issue. At the end of the day, insurance companies are making certain choices to protect themselves from known unknown risks, ensuring they can effectively deliver sustainable returns to shareholders.”



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