Getting senti’mental’ on insurance coverage

The tragedy of Covid-19 pandemic deaths, the disruptive lockdown and the prolonged social distancing phase have thrown some much-needed light on mental health and wellness. With the insurance regulator IRDAI making it mandatory for insurers to treat mental health conditions with the same care as physical ailments, the insurance industry feels that it is providing adequate coverage. But is it easy to get insurance coverage for mental illness counselling and treatment? Are there gaps that need to be filled? Here is a reality check

Stepping it up

The Mental Health Care (MHC) Act 2017 was passed in April 2017 and came into force from May 2018. Besides other things, the law aims to guard, advance, and fulfil the rights of persons with mental illness. In May 2021, IRDAI specified that all in-force insurance products on or after the Mental Health Care Act, 2017, became effective, be deemed to provide cover for mental illness diseases. This would be a break from the historic trend where only a handful covered mental illness expenses. And in October 2022, the regulator asked insurers to ensure compliance with its previous circulars on mental health illness coverage before October 31, 2022.

Taking a cue from the MHC Act, the insurers, in their policy documents, define mental illness as a substantial disorder of thinking, mood, perception, orientation, or memory that grossly impairs judgement, behaviour, capacity to recognise reality or ability to meet the ordinary demands of life. Mental conditions associated with the abuse of alcohol and drugs is also mental illness.

Mental disorders are now among the top leading causes of health burden worldwide. There is an increased focus on mental health coverage. Mental health issues are rising and so are the awareness, and tools to deal with them.

State of coverage

According to Siddharth Singhal, Business Head-Health Insurance, Policybazaar.com, “Most of mental illnesses such as anxiety disorders, post-traumatic stress disorder, dementia, acute depression, and bipolar disorder are covered under the comprehensive health policy.” Ailments such as intellectual disability or mental retardation, which weaken intellectual and adaptive effectiveness due to neurodevelopmental disorders, are not included under health insurance coverage.

As per our research, the policy wording of low-cost policies does not devote a lot of space to how mental health illnesses are treated. But the comprehensive policies do. For instance, AB Activ Health Platinum Premiere, SBI General Super Health, Bajaj Allianz Health Guard, Care Classic or Navi Health talk about mental illness hospitalisation (what is covered and what is not), or mental health coaching (telephonic consultation), or applicable waiting period, etc.

When there is mental illness hospitalisation, the insurer covers the medical expenses incurred by the insured person up to the limit specified in the policy or a specific amount. For instance, Navi Health’s hospitalisation benefit is up to ₹3 lakh for mental illnesses such as schizophrenia, bipolar affective disorders, depression, obsessive compulsive disorders and psychosis. In many policies, there is a sub-limit specified in the policy schedule/product benefit table. In the case of ManipalCigna LifeTime Health, the mental care cover is up to full sum insured for treatment availed in India.

However, some policies, point blank, say they will not cover hospitalisation spends linked to any condition that is not clinically significant or is related to anxiety, bereavement, relationship or academic problems, work pressure, etc. Also, policies such as HDFC Ergo and Sampoorna Suraksha say that coverage for mental illness is applicable if done in a ‘mental health establishment’.

Counselling, OPD backdoor

As many mental health patients or caregivers would know, counselling plays a vital role for many such patients. Even though mental health is still an evolving space in India and more progressive policies are being introduced to expand the coverage, counselling is still not part of it. “...yet the insurers in India cover policyholders against the OPD (outpatient department) expenses made towards diagnostics, doctor consultations with psychiatrists and psychologists, and pharmacy bills. Thus, it is suggested to opt for policies that include OPD expenses and provide better coverage,” says Singhal of Policybazaar.

Note, insurers pay for OPD cover costs incurred for what they consider ‘medically necessary consultations’, diagnostic tests and pharmacy expenses. In many cases, this is up to the amount specified in the policy schedule/product benefit table. While the cost of mental illness treatment counselling is high, OPD sub limits for consultations are often linked to the sum insured bands and are low (₹2,000 to ₹10,000 per year). An equal amount is allocated by many insurers by clubbing together OPD diagnostics and medicines. So, the OPD route may not be wide enough to get full reimbursement for many mental illness treatment costs if multiple counselling sessions, for instance, occur.

In a few cases such as Care Supreme policy, the company specifically mentions that it shall indemnify the outpatient medical expenses up to the limit specified through cashless facility towards consultation, counselling, and rehabilitation for those suffering from acute depression, obsessive compulsive disorder, anxiety, and post-traumatic stress disorder.

Mental illness conditions also fall under the pre-existing disease exclusion for 2-4 years. Conditions at the start of the policy period will have to wait out the period just as with other conditions. Policyholders already on medication at the policy initiation will have to declare or may potentially fail to land a claim for the mental illness coverage provided.

According to Singhal, it is recommended that policyholders already using antidepressants declare it as a pre-existing disease (PED) in advance, basis this known fact the underwriter would evaluate the possible risk.

COMMENT NOW