All Health Policies To Cover Mental Illness, Says Irdai

The Insurance Regulatory and Development Authority of India (Irdai) has directed insurance companies to ensure that all health insurance policies should cover mental illness. Insurers have been asked to implement the new rule by October 31, 2022.

“All insurance products shall cover mental illness and comply with the provisions of the MHC Act, 2017 without any deviation. Insurers are requested to confirm compliance before October 31, 2022,” said the Irdai circular.

According to the Mental Healthcare Act, 2017, every insurer will have to make provision for medical insurance for treatment of mental illness like they do for the treatment of physical illness. 

"All existing polices would have to evolve to meet the holistic requirement for mental wellbeing," says Amjad Khan, director, employee benefit practice and international business, Anand Rathi Insurance Brokers.

The Covid-19 pandemic has increased focus on mental health issues due to the increasing stress and anxiety. People are now more open about such issues and are seeking medical treatment and therapy too. 

Says Khan: “Post-pandemic the narrative for preventive healthcare has changed in India. Pro-activity from IRDAI shows the emphasis on mental well-being and thus insurers will have to speed up with their offerings on well-being solutions offered to individuals.”

 What The Circular Means

It’s expected that insurance companies will make provisions to cover mental health ailments under a standard health insurance policy though there is not much clarity on the matter. It remains to be seen how insurance companies act and further clarity will emerge when they release revised policy documents.

The insurance regulator has also said that many health insurance products that are marketed by insurers are not providing coverage to newborns/infants with internal congenital birth defects from day one.

It said that the health insurance products that cover newborns or unborns will provide coverage for internal congenital birth details from day one without imposing any waiting period or sub-limits or any other restricting conditions. 

“In light of this announcement, insurers will have to set up supporting infrastructure in terms of mental illness treatment-specific network hospitals, clinics, and psychiatrists, which will in turn help standardize the cost of treatment across a variety of mental illness ailments, their scope, and condition-specific pricing,” explains Apaar Kasliwal, executive director, PolicyBoss.com, an online insurance broker. 

Insurers will have to chart out a clear claim process specific to mental illness treatment and ensure that there is ease of access, affordability and availability for all mental illness treatments. 

Navigating Policies

“As customers, we need to be aware of the kind of solution we are buying as this benefit is under constant evolution. While the health insurance policies will cover hospitalization due to mental issues triggering diagnostics, medication, treatment costs, room rent, ambulance costs etc, we still need to ensure that the OPD part which covers mental health consultation and expert counseling is available through standalone OPD benefit if not covered under your health plan,” says Khan. 

According to experts, IRDA has been pushing for health insurance reforms for quite some time. The Mental Healthcare Act in 2017 made mental health coverage under health insurance necessary, but it was only in 2020 that products, which didn't exclude mental illness-related hospitalization, started being filed.

“Now, many policies cover mental illness-related hospitalization, and the regulator is ensuring that every policy covers it. It's a welcome move, but there are still practical limitations, as only hospitalization is covered under these policies, and not just doctor consultation or medicines," says Avinash Ramachandran, chief operating officer (COO), Assurekit, an insurance gateway company to integrate insurance with your business.