health insurance for people with mental disabilities

Taking a critical view on health insurance policies for people with mental disabilities

Most people understand health insurance policies that cover hospitalization, critical illnesses, maternity, Coronavirus and other diseases. But have you ever thought about health insurance for mental illnesses? There is still a lack of clarity and awareness about health insurance for mental conditions since this is taboo for most people and they normally avoid talking about it.

Mental illnesses are on the rise in India. Statistics show that more than 14% of India’s people suffer from some sort of depressive disorder. Even then, mental illness is not considered a serious health issue. Most people ignore it, or rather, are not even aware of someone within their own family or inner circle of friends and acquaintances who have a mental illness.

Let’s understand how one can manage mental health conditions and the insurance options for mental illnesses in India.

Mental illness insurance in India

Until April 2017, mental illness was not a part of health insurance defined in the IRDAI guidelines for insurance companies. In July 2018, under Section 21(4) of the IRDAI Act, the mental illness got included in the ambit of insurance coverage. The rule states that “every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for the treatment of physical illnesses.”

A report in the Economic Times shares, “In August 2018, insurance regulator, IRDAI, directed all insurers to comply with the Act’s provisions. On 30 September 2019, IRDAI issued guidelines which barred the exclusion of “mental illnesses, stress or psychological disorders, behavioral and neurological developmental disorders.” 

Mental health insurance – what is it?

Let us look at the commonly accepted definition of mental health insurance as per the Mental Healthcare Act of 2017. The Act defines mental illness, which all insurers must abide by. As per the Act, if there is a considerable disorder in the mood, thinking, perception, orientation, or memory of an individual that hampers the behavior, decision making, judgment, or the capability to meet ordinary day-to-day activities, it will qualify as mental illness. The Act keeps mental retardation out of the definition since it is mostly due to incomplete or arrested brain development.

Those who have a family member who has mental disorders such as depression or anxiety should opt for mental health insurance. This type of insurance is also useful for those who have a history of mental illnesses in the family. Moreover, mental health insurance plans are also useful to people if they go through post-accident trauma-related treatments. 

Some of the diseases covered by mental health insurance 

  • Post-trauma stress disorder
  • Psychotic disorder
  • Depression
  • Anxiety
  • Bipolar disease
  • Schizophrenia 
  • Obsessive-compulsive disorder

Inclusions and exclusions of mental health insurance

Just like other kinds of health insurance plans, mental health insurance plans also have exclusions. Policyholders should be aware of the exclusions while buying a health insurance plan for mental illness.

  • Health insurance companies in India are still grappling with the confusion imposed by underwriting mental health insurance plans and coverage. As it is still a new product in India, the guidelines and clauses are still not clear and differ from company to company and plan to plan. 
  • While some plans might cover pre-existing mental health conditions, some insurance companies in India do not include it. 
  • In-patient hospitalization expenses related to mental health conditions are mostly covered under regular health insurance policies. 
  • Outpatient treatment expenses such as therapy or counselling might not be covered under mental health insurance plans. These expenses might be covered if the health insurance policy includes OPD.
  • If a mental condition is pre-existing, the insurance company can apply a waiting period of a few months to a few years for a claim to be made.
  • Mental disorders that require hospitalization are mostly covered under comprehensive indemnity plans that offer coverage for hospitalization. 
  • A mental health insurance policy helps cover expenses incurred due to hospitalization which is related to mental disorders. Expenses such as in-patient care, diagnostics, treatment expenses, room rent, ICU charges, and ambulance charges, among others.
  • The health insurance plan might not cover recurring mental health insurance related hospitalization claims, as it might mean that the patient is not following medication and treatment requirements.
  • For mental health insurance inclusions, OPD is the key. Most patients do not require in-patient treatments in the beginning as they might only require therapy or counselling. While many health insurance plans do not include OPD expenses, some insurers have started including it. 
  • In cases where patients are suffering from severe mental health conditions such as severe bipolar disorder, the insurance company might not give a health insurance plan, as these are serious diseases and cannot be cured easily as well as might incur huge claims. 

Benefits of mental health insurance plans

Mental disorders are on the rise in India. A lot of the mental conditions are related to lifestyle and stress related to work and urbanisation. Here are the benefits of mental health insurance:

  • Cover costly treatments: In India, the cost of hospitalization is quite high. Health insurance is a good way to be prepared for hospitalization related costs that arise due to mental disorders.
  • Having a health insurance plan that covers mental diseases can help reduce the stress that comes with a person with a mental condition. The family members have to go through a tough time generally. Having financial security can ease stress levels as family members can then focus on the mental health of their loved ones.
  • Going by the increasing awareness of mental health in India and how seriously people have started talking about it, it is advisable to trust and rely on mental health insurance plans, buy a mental insurance plan early on and reap its long-term benefits. Most mental illnesses are often long-term afflictions and need prolonged treatment.
  • Mental disorders are common in senior citizens and they tend to increase with age. If mental illness is covered under your comprehensive indemnity health insurance plan then you can easily meet the expenses related to the treatment of your senior family members who are suffering from such conditions.

Mental illness insurance plans in India

Although mental health insurance plans are not common or popular in India, there are some plans offered by both public and private health insurance companies. The Government of India offers two insurance plans that cover mental illnesses.

  1. Niramaya Health Insurance scheme
  • This plan is provided by the National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities, Government of India
  • The sum insured for this plan is Rs.1 lakh
  • No pre-insurance medical tests are necessary
  • Treatment can be availed at any hospital
  1. Swavalamban Health Insurance scheme 
  • This plan is a group health insurance or a family floater plan launched in association with the New India Assurance Company. 
  • The sum insured is Rs.2 lakh
  • Age group is from 0 to 65 years of age
  1. Max Bupa GoActive Plan
  • Sum insured is up to Rs.25 lakh
  • 10% increase in cover every year
  • Waiting period of 36 months for pre-existing diseases
  1. Manipal Cigna ProHealth Insurance 
  • Covers conditions related to mental illnesses
  • Sum insured starting at Rs.2.5 lakh
  • Unlimited restoration
  • Worldwide protection for emergencies
  • Healthy reward points of 20% of premium

In India, for many years since health insurance came into the market, mental illness was not covered or most insurers were unwilling to underwrite the risk. But the Government of India took a positive step in 2017 by passing mental health care guidelines. The IRDAI, too, shared guidelines under which health insurance companies have to consider mental conditions equal to physical illnesses. This is a welcome change for insurance seekers especially those are naturally prone to such mental afflictions.

As awareness about mental health is getting a boost in India, so should the awareness about health insurance plans for mental illnesses. Mental illness can be a long-term condition with the rising number of cases. Also, many of the mental afflictions these days are an outcome of the lifestyle-related conditions. Therefore, it would be a wise idea for anyone feeling the symptoms of mental illnesses to invest in a mental health insurance plan. To know more about mental insurance plans, get in touch with IIFL.

FAQs: Health Insurance for People With Mental Disabilities

Why should one buy health insurance plans for mental illness?

Mental illness is on the rise. Quite often, mental disorders lead to hospitalization, which can be a costly affair. Moreover, mental illnesses require therapy and medication, which can cost anywhere between Rs.2000 to Rs.5000 a month. Mental health insurance plans can help ease the expenses related to mental illnesses and help to cope with the condition in a better way. This is more so in the case of aged people who do not have social security to fall back upon.

Is there a waiting period in a mental health insurance policy?

Most health insurance plans have a waiting period, which can range from a few months to a few years. While there is no hard and fast rule on this subject, this is a standard caveat that is imposed by most of the insurance offerings. However, this depends on the plan chosen and the clauses of the mental health insurance policy.

Does mental health insurance provide in-patient treatment claims?

Yes, most health insurance companies provide coverage for in-patient, hospitalization expenses. However, many have a condition where the hospitalization has to be for at least 24 hours. It would largely depend on the fine print of the policy.

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