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Does Insurance Cover Mental Illnesses And Addiction Treatment in India?

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November 3, 2021
Reviewed by: Rajnandini Rathod

India’s first mental hospital, called the Bangalore Lunatic Asylum, was founded in 1847. The hospital, over the next 60 years, treated around 100 patients every year. The mental hospitals allowed free movement for patients and boasted gardens and several open spaces.

Before that, in other mental hospitals, there was a lot of mistreatment of mentally ill people. They’d be confined, tied and beaten up by Shamans. Hospital employees didn’t provide basic needs such as personal hygiene to the patients and they were not allowed to socialise with people.

There were only 2 such hospitals built by the British, and the rest were old jails and barracks converted into mental hospitals. The Bangalore Lunatic Asylum was renamed in 1925 to Mysore Government Mental hospital when mental illnesses started being treated as medical science.

The National Institute of Mental Health and Neuro Sciences (NIMHANS) development in 1974 marked the beginning of mental health services in India and is ranked the fourth-best mental health institute in India. History and Milestones – Nimhans

The Mental Healthcare Act, 2017 on Insurance

People with mental illnesses have waited for decades to be included in the healthcare system in India. The Mental Healthcare Act, 2017 was written to provide mental healthcare services to people with mental illnesses. It aims to protect the rights of persons with mental illnesses and ensure that people receive the necessary treatment through inclusion in insurance policies.

Section 21 in The Mental Healthcare Act 2017 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 illness.” In addition, it states that persons with mental illnesses shan’t be discriminated against on any basis. Emergency facilities and services, including ambulances, and living conditions and treatment, should be of the same extent and quality as provided to people with physical illnesses.

The Indian government spends less than 2 percent of the GDP on health. Access to mental healthcare is a massive issue in India because people don’t have a health insurance scheme, and on-the-spot payment for treatment is expensive.

According to the National Mental Health Survey, mental illnesses and addiction are prevalent in lower-income homes. Due to the cost of treatment, many people cannot seek help, which leads to relapses and persons with mental illnesses are left feeling helpless without treatment. Health insurance and mental illness

Changes Made by IRDA in 2018

The IRDA supervises and regulates the Indian insurance sector. Their purpose is to make sure there is no wrongdoing by the insurers. They frame the guidelines and make sure the policyholders are treated fairly.

The supreme court issued notices to the government and the Insurance Regulatory and Development Authority(IRDA) when they found that insurance companies are not following the guidelines given in the Mental Healthcare Act, 2017 and a circular IRDA made in 2018. The laws were not being fully implemented by insurance companies, because of which, treatment for persons with mental illnesses was getting hampered.

What Will Be Covered In The Insurance Policy?

The Mental Healthcare Act defines mental illness as persons suffering from disorders that affect the mood, behaviour, or cognitive ability, for example, anxiety, bipolar disorder, and drug or alcohol abuse. Mental retardation, where a person’s mind isn’t fully developed, is not included in the definition of mental illness by the Act.

It will depend on the policy if outpatient treatment is covered. Your insurance policy should have the same clause for mental illnesses if it covers both hospitalisation and outpatient treatment for physical diseases. It’s essential to read each clause and speak to the insurer.

Several companies such as ICICI Lombard and Max Bupa Health Insurance have introduced health insurance policies with a focus on mental healthcare. However, there might be a clause, same for physical illnesses, of a 2-year waiting period before raising a claim request. You will need to buy and renew the same policy for a minimum of 2 years to become eligible.

How does the Act define mental illness? 

Is treatment for mental health covered by insurance policies?

What are the challenges faced by persons with mental illnesses?

Persons with mental illnesses face a lot of stigma and discrimination. The World Health Organisation revealed that India’s mental health crisis is worsening, and the government needs to take immediate steps to manage the situation. In a 2017 report, the World Health Organisation(WHO) noted that 7.5 percent of India’s population suffered from a form of mental illness. It may increase and affect up to 20 percent of the population by 2020.

The high court noted that mental health is as important as physical health when insurance companies did not follow the Mental Healthcare Act 2017 guidelines by refusing to settle claims for persons with mental illnesses. The court also said that getting insurance for treatment for mental health is an essential need, especially with the COVID pandemic proving so.

NIMHANS reported that only 10 percent of the population receives quality treatment. There’s a massive problem in accessing treatment for mental illnesses due to financial restrictions or not having enough qualified mental health professionals. The government doesn’t allocate enough funds to build infrastructure, and rural areas don’t have enough mental health professionals. There’s a poor implementation of schemes and understanding of what’s needed to improve the mental healthcare situation in India.

For every 1,00,000 Indians, There are 0.3 psychiatrists, 0.07 psychologists, and 0.07 social workers. 

Insurance – “Mental Illness” Be Included Without Discrimination 

Mental Health Issues in India: Concerns and Response Shankardass MK

Final words

It’s an excellent win for persons with mental illnesses that there is insurance coverage for treatment. Treatment for mental illness and addiction is expensive, and you must consider buying an insurance policy to make sure you get the treatment needed. It’s essential to disclose your mental illness or addiction details to the insurance companies and find out the exact details of coverage.

The situation might get better with the supreme court issuing notices and IRDA taking charge for insurance companies not to discriminate against people with mental illnesses and provide equal benefits as for people with physical illness. It’s great that we’re now having conversations and raising awareness about mental health and illnesses.

There are many challenges that the government needs to overcome, but with the COVID pandemic, mental health and illness issues are gaining the much-needed limelight. And since India is a UN member, it’s mandatory, under the Universal Health Coverage, to ensure that the Indian population has health insurance. 

References

Nimhans(2004). History and Milestones. Nimhans

https://nimhans.ac.in/history-and-milestones/

The Gazette of India(2017 April). The Mental Healthcare Act. Ministry of Law and Justice.

https://egazette.nic.in/WriteReadData/2017/175248.pdf

A Sangoi Bijal(2019 April). Health Insurance and Mental Illness. NCBI

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6482696/

Did You Know Mental Illness is Covered Under Insurance? Economic Times.

https://economictimes.indiatimes.com/wealth/insure/did-you-know-mental-illness-is-covered-under-health-insurance/how-does-the-act-define-mental-illness/slideshow/71520975.cms

Navneet Dubey(2021 August). Is Treatment For Mental Health Covered By Insurance Policies. Livemint.

https://www.livemint.com/money/personal-finance/is-treatment-for-mental-health-covered-by-insurance-policies-11628709796684.html

Gautam Bhatikar(2021 May). Insurance- Mental Illness be Included Without Discrimination. Mondaq 

https://www.mondaq.com/india/insurance-laws-and-products/1067196/insurance-mental-illness-be-included-without-discrimination-delhi-high-court

Mala Kapur Shankdass(2018). Mental Health Issues in India: Concerns and Response. IJPN

https://www.ijpn.in/article.asp?issn=2231-1505;year=2018;volume=15;issue=1;spage=58;epage=60;aulast=Shankardass