Insurance to Cover Mental Health: Will It Pay for Your Therapy?

Now that insurance companies have to cover mental health, to what extent will it benefit the people?

Mental health activists and patients have long been advocating for health insurance to cover mental illness as well. The Mental Healthcare Act, 2017, which came into force earlier this year, finally directed insurance companies to include the same.

Reiterating the law, the Insurance Regulatory and Development Authority (IRDA) has now issued an order instructing all insurance companies to “make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness.”

This comes as a welcome move. Right now, almost all insurance policies do not cover treatment of mental illnesses, stress-related conditions or psychological disorders.

While it’s a step in the right direction, how much is this going to benefit people who battle mental health issues?

If You Have a Mental Illness, What Will Insurance Pay For?

This move by the authorities has made sure that health insurance policies no longer have a blanket exclusion on mental illness. But health insurance is tricky. It has many ifs and buts.

The Mental Health Act asks insurers to treat mental illness as any other physical illness. So, when there are already so many clauses on what gets covered by insurance for physical ailments, the same can be expected for mental illness too, say experts.

Take for example, the fact that insurance typically covers only in-patient hospitalisation and not out-patient treatment. This means that your visits to the doctor, consultations, therapy sessions, and medicines are not payable by the insurer.

This is particularly problematic when it comes to mental health, as only a small portion of people battling mental health disorders need hospitalisation. Mostly, people with mental conditions need doctor consultations, therapy or medication, all of which insurance policies don’t cover in their current form.

While the actual drafting of policies by insurers for mental health is yet to be done, experts don’t see it being any different from the existing structure unless there’s an external push.

The health insurance market in India doesn’t cover out-patient treatment, with the exception of a few. Even if some do, the coverage is not very high. The circular may push the industry to focus on developing out-patient products.

Jyoti Punja, Chief Operating Officer and Customer Officer, Cigna TTK Health Insurance

For the 15 crore Indians who are in need of mental healthcare interventions, this isn’t great news. National Mental Health Survey of India 2015-16 found that families had to spend approximately Rs 1,000 – Rs 1,500 a month for treatment and travel to access care.

However, in a metro city like Delhi or Mumbai, a session with a psychiatrist can cost anywhere between Rs 500 – Rs 2,000 and the number of sessions vary from person to person. Drugs and travelling expenses can take the monthly expenses anywhere between Rs 5,000 – Rs 10,000.

Is Insurance For You If You Already Have a Mental Illness?

The exclusions in insurance policies don’t just end with out-patient treatments.

Several companies don’t provide insurance to people already suffering from critical ailments. For instance, if you have cancer, and you want to buy a health insurance, most insurers would turn you down. (There are now special plans by few companies to cater to such patients.) This could extend to mental health patients too.

Livemint quotes Sanjay Datta, chief-underwriting and claims, ICICI Lombard General Insurance Co Ltd, as saying:

The same underwriting criteria, which denies cancer or heart patients from buying insurance, should apply to individuals with a pre-existing mental illness. However, if the insurer agrees to insure them, then after the waiting period on pre-existing ailment, these conditions would need to be covered.

The problem with this is that treatment for mental illnesses can be a long, ongoing process. So how does one decide that the “pre-existing ailment” is now over and the person can then be eligible for insurance after the waiting period?

There are also concerns about the pricing for health insurance plans going up as it increases its scope to cover mental health.

But what happens when an insurer fails to comply with the Mental Health Act? For now, the Act doesn’t specify any action against those who don’t follow the order. Activists feel that for companies to take the law seriously, there should be strict guidelines for such cases.

While there is a lack of precedent for insuring mental health treatment and it’s too early to comment on how insurance policies are modified, the existing norms don’t seem promising. The circular intends to increase coverage but the benefits will be limited if these concerns are not addressed.