Mental Health Insurance: Mental illness claims see 50% surge - How IRDAI's guideline will prove to be beneficial?

Mental Health Insurance: After the onset of the Coronavirus pandemic, it has been noticed that a lot of people are visiting hospitals with stress-related issues. There could be various reasons behind this - spending a lot of time in isolation, losing their loved ones and monetary losses. According to online insurance aggregator Policy Bazaar, there has been a surge of around 50 per cent in claims related to mental illness in the last year. This comes at a time when all health insurance companies have been categorically asked by the Insurance Regulatory and Development Authority (IRDAI) to provide coverage for mental illness under health insurance policies. The deadline to implement the same ended on October 31, 2022.

How many companies have followed IRDAI's guidelines?

Siddharth Singhal - Business Head, Health Insurance, Policybazaar.com - told Zee Business that each and every company has abided by the decision of the insurance regulator.

"Be it a standalone health insurance company or a general health insurance provider, everyone needs to comply with the IRDAI's directives. So each one of them is now covering mental illness under their health insurance policies," Singhal said.

What does the IRDAI guideline state?

According to Singhal, the IRDAI guideline in layman's language means that all health insurance companies have to consider mental illness just like physical illness.

"In a physical illness, there is a clear line of treatment. However,  there is no clear line of treatment in the case of mental illness. The IRDAI simply states that if a person with mental illness is hospitalised, the insurance provider will have to pay for it," Singhal said.

Venkatesh Naidu - CEO, Bajaj Capital Insurance Broking Ltd - said that the IRDAI's decision will make mental healthcare accessible to all.

What does it mean?

Naidu said that the exposure draft of the IRDAI states that insurers cannot refuse coverage to policyholders who have previously used opioids or antidepressants.

"Insurers cannot also refuse coverage to people who have a documented history of clinical depression, personality or neurodegenerative disorders, sociopathy, or psychopathy. In addition, the IRDAI directed insurers to include puberty and menopause-related disorders, as well as age-related macular problems, in standard health insurance plans. Following IRDAI guidelines, many insurers have begun developing products that cater to the specific needs of people suffering from mental illness," he told Zee Business.

"In a mental health disease, a lot of people require OPD treatment. For example, a person who is suffering from depression might have to visit a doctor or psychiatrist multiple times and may not require hospitalisation. Therefore it becomes very important that a customer has OPD coverage so that these consultations can be covered," Singhal said.

Things to keep in mind in case of pre-existing mental illness

Mostly, in-patient hospitalisations for mental disorders are covered under regular health plans, however, outpatient counseling or therapy is only covered if the plan offers OPD benefit. In case of a pre-existing mental disorder, the insurer is at liberty to treat it as one and decide on the waiting period, usually 2-3 years.

"If you are looking for a mental illness cover, check if the disorder requires hospitalization or can be treated through therapy and medication. In the case of the former, go for a comprehensive indemnity plan that covers hospitalization, while the latter will require a plan that also offers OPD," Naidu added.

How things will change now?

According to Singhal, health insurance companies earlier used to straight away decline to give health insurance to persons suffering from mental illness.

"A lot of health insurance companies were not even accepting the proposal if someone is suffering from a mental illness. But now, they are mandated to provide health insurance. However, the insurance provider can put it under a waiting period depending upon the kind of policy one is buying."

Abhishek Mahato - Principal Officer, Pazcare - is of the view that IRDAI's decision is a welcome move to bring uniformity.

"Mental well-being is the need of the hour in these dynamic times. This regulation by the IRDAI is a welcome move to bring about uniformity. As earlier only selective companies included mental illness in their benefits, not all did as a standard. With this initiative, everyone will have mental illness covered and accessible treatment. It is good to see authorities break taboos by treating mental health as equal to physical health," Mahato said.

The move has been also welcomed by corporate houses as they feel that the addition of mental illness to insurance coverage will help companies to widen their benefits further while enhancing their employee experience.

"Mental health is definitely very important for every employee and their family members. Covering mental illness under health insurance should be welcomed in every organisation. We are extremely happy that mental well-being is receiving due attention in the workplace as this will be a win-win for the employer as well as the employee," said Sumit Sabharwal - TeamLease HRtech CEO.

What is Mental Illness?

Mental illness, also referred to as a mental health disorder, is characterised by a clinically significant disturbance in an individual's cognition, emotional regulation or behaviour.
 
According to Dr Mimansa Singh Tanwar - Clinical Psychologist and Head, Fortis School Mental Health Program, Fortis Healthcare Ltd. - mental illness is a cluster of symptoms in which we look at how these symptoms impact our day-to-day functioning.

"There is a wide range of conditions which we seek under mental illness which actually causes functional impairment. Functional impairment means that in your day-to-day activities you would see that your mood is so low, you are unable to engage in social interactions, you avoid work and are not able to put the effort into your work. Also, such persons would have difficulty in sleeping and they will not be comfortable waking up at a certain time, you may be very anxious and similar things," Dr Tanwar said.

What causes Mental Illness?

According to Dr Tanwar, mental illness is caused because of three basic factors  - biological, psychological and environmental. 

"Biological factor, which means genetics and neurotransmitters that play a role in it. Psycho-social functioning, which means your environment. Any long-term stress which has been there or any immediate stress from any traumatic experience from the environment for example your school, office family, etc. Psychological factor, which means our basic temperament or attitude to deal with day-to-day issues. These factors can cause mental illness," she added.