Significant work needs to be done to improve public and commercial policy around insurance for those who suffer a mental health condition, according to the Actuaries Institute which yeserday released a Green Paper reviewing how Australia's insurance industry deals with people with mental health conditions.
The Green Paper finds:
- The insurance sector faces ‘systemic difficulties’ dealing with mental health coverage.
- Many insurers are improving claims processing.
- Progress is hampered by insufficient data and subjective criteria for diagnosis.
- The claims process can be adversarial and in itself lead to ‘secondary mental harm’.
- There’s a bias against early intervention that can hinder a claimant’s recovery and return to work.
- Insurers face real challenges to sustainability.
While many insurance products acknowledge and provide coverage for mental health conditions, consumers continue to express dissatisfaction with the way the insurance industry deals with them. The Green Paper found that problems with insurance can arise at three different touch points between consumers and the insurance product, namely: product design and definitions, buying or entering an insurance product, making a claim and receiving benefits or payments.
The document says that the industry needs better data to more effectively deal with diagnosis and claims, and the claims process, which can be long and adversarial, can sometimes hinder recovery. The Green Paper also questions whether lump sum payments help recovery or encourage a return to work, which can be in the best interests of the claimant.
"Insurance products need to strike a balance between meeting the needs of people who suffer the loss covered, and being affordable to those who are at risk of such losses," said Geoff Atkins, principal at Finity Consulting, and co-author of the report with Sue Freeman, also from Finity Consulting.
“Insurers must be financially stable and solvent. This has to be balanced against society’s confidence in the system that legitimate claims are paid,” Mr Atkins said.
The Green Paper states the sector should support early intervention to deal with mental health conditions, focus on providing the best treatment to reduce recovery times, and increase the likelihood that consumers can return to work. More research needs to be done to determine why some workplaces have higher claim rates than others.
Ms Jenny Lyon, President of the Actuaries Institute, said: "Nearly half the adult population experience a mental health issue during their lifetime, most commonly anxiety and depression, and one in five Australians aged over 15 will be affected by a mental health condition, in any 12-month period. Less than half will seek treatment."
She said: “The report finds some improvements could be readily achievable and others require a longer-term commitment.”