Passed in April this year, Mental Healthcare Act 2017 is paving the way for a change in the way mental ailments are covered under health insurance policies. “Every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness,” states the Act.
So far, mental illnesses have been generally treated as permanent exclusions under most individual health policies. Going forward, however, the newer products will have to abide by the Act. “All health insurance products undergo IRDAI approval and even a slight change requires a complete product re-filing. In future, insurance companies will devise mechanisms in product structures and underwriting to deal with customers with mental illness,” says Nikhil Apte, chief product, officer, product factory (health insurance), Royal Sundaram.
Expenses related to mental healthcare have been excluded from the scope of coverage due to insurers’ concerns around underwriting and disclosures. “This is because there is anti-selection. Also, it is difficult to detect such conditions at the time of pre-policy medical check-up as these are screening and not diagnostic tests in nature. The anti-selection and non disclosure will remain a big challenge for insurance companies if mental illnesses are brought into the coverage ambit,” points out Apte.
Through its 2017 ‘Mental Health in the workplace’, the World Health Organisation seeks to highlight the fact that depression and anxiety disorders are common mental disorders that leave impact on individual’s ability to work productively. And, insurance companies would do well to take cognisance of it, say activists. “Given our current lifestyles, ailments related to stress and anxiety are on the rise. Insurance companies would do well to extend coverage to such illnesses. If not, they could, as part of their wellness programmes, encourage policyholders to take up Yoga or meditation to deal with the day-to-day stress issues,” says Gaurang Damani, consumer activist whose petition in the Bombay High Court seeking framing of health insurance guidelines paved the way for extensive IRDAI regulations on the health insurance business.
From an insurance-seeker’s point of view, a policy that covers mental diseases makes sense even if it comes with a higher price tag.