News Life and Health01 Nov 2018

India:Insurers confused about what constitutes mental illness

01 Nov 2018

Insurers in India are at different stages in their preparations to provide coverage to those who are mentally ill.

One of the reasons for this situation is confusion among insurers over the definition of the term “mental illness” in the Mental Healthcare Act 2017, which became effective in May 2018.

Mr Mayank Bathwal, CEO of Aditya Birla Health Insurance Company (ABHIC) told Firstpost that it is easier to chalk out policies for in-patient facilities (which include hospitalisation) because of already available data and existing clarity on benefits for customers; but for mental health care, there is work that needs to be done in terms of understanding the range of issues or the benefits that insurers need to provide.

“We are now reviewing the process. Mental health is a fairly vast area,” he said.

Mr Bathwalsaid that ABHIC is looking at how to provide mental healthcare benefits and is in touch with the IRDAI to seek clarification wherever required. "We will offer these benefits at the right time,” he said.

He added, “We also need to be very clear about what mental health is. Our products already cover some of these lifestyle conditions, and when our health coaches have interactions with our customers, the top areas they talk about is how to deal with stress, etc. So, in some sense, we’re already providing some of these benefits and we’re doing some of these interactions with our existing customers. How you take it forward in terms of OPD expenses or hospitalisation expenses are areas that will evolve.”

ICICI Lombard, on the other hand, is ready to cover mental illness in line with an IRDAI's directive. In an emailed response, Mr Sanjay Datta, chief–underwriting, claims, reinsurance and actuarial, at ICICI Lombard, said, “Our existing policy will cover mental illness in the same manner as physical illness as per policy terms and conditions.”

Mr Ashish Mehrotra, MD & CEO of Max Bupa Health Insurance, in an article in Financial Express, pointed out that the National Mental Health Survey 2016 estimated that about 150m adult Indians, or 15% of India’s population suffered from mental health problems. Those between 30-49—a productive age group in the workforce—were among the most affected.

“Without the availability of insurance, patients have had to cover the entire cost of treatment out of pocket. This has proved a major deterrent, due to which an estimated 80% of patients do not seek or receive any treatment,” Mr Mehrotra said.

Immediate effect

Following the passage of the Mental Healthcare Act 2017 in May 2018, the IRDAI issued a circular in August directing health insurance providers to cover mental health problems as part of their policies with immediate effect. At that time, there was not a single policy in the market which covered mental healthcare.

Mr Bathwal said, ”While the policies, document, terms and conditions have not changed yet—because they have to be filed with the regulator— the circular meant that insurers, despite not having made changes to terms and conditions, will have to start offering those benefits. All these insurers have to go back and refile their terms and conditions because the document which is currently written for most of them will have a clause which says that anything to do with schizophrenia, Alzheimer’s are excluded. Technically, they’ll have to erase this sentence. That has not happened because it’s a long drawn process. Most insurers are in that process.”

While the Act implies that everybody is deemed covered for mental health problems, how the insurers cover their customers also depends on how they interpret the IRDAI circular.

Mr Vaidyanathan Ramani, product and innovation head at Policybazaar.com, said, “Different insurers can interpret it in different ways. For example, today, there are health insurance policies which cover you typically only if you’ve been admitted to hospital for more than 24 hours. If you have not, then there are special lists under which the coverage is allowed, like daycare procedures. One quick interpretation of the IRDAI circular is that an insurer will also cover mental health insurance the same way."

Mr Ramani’s understanding is that there is an informal committee constituted by insurance companies which is looking into defining mental illness and standardising the procedures.

Insurers and the IRDAI have a lot of ground to cover, including deciding on procedures to be followed, terms and conditions in insurance policies, evaluation parameters to be used to screen patients, and the premium at which mental healthcare can be covered.

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