Insurance and Mental Health Act: Locating Wrong Discrimination


World Mental Health Day 2022 falls on October 10. An opportunity to “revive our efforts to protect and improve mental health,” says the World Health Organization (WHO). The COVID-19 pandemic has exacerbated a mental health problem as a 25% increase in anxiety and depression can be seen prevalent worldwide. According to the World Health Organization, despite the prevalence of mental health problem, funding for this global issue is still deficient in middle-income and middle-income countries. This blog is an attempt to analyze the Indian scenario of a faulty distinction between physical and mental health.

In India, legislation relating to the regulation of the insurance industry is uniform throughout the territory of India as it falls under the Federation List and the laws are made by Parliament. Ago Insurance Act 1938, (as amended) does not expressly recognize or preclude any psychiatric or psychiatric disorder or illness coverage from being defined as health insurance, however, Indian insurance providers have continued to designate their health insurance products providing coverage for hospital treatment and medical expenses for physical ailments only. From nationalizing insurance industries to allowing entry into the industry by private players and foreign investors, the law relating to insurance has been gradually developed in India and has undergone several stages of changes at every level.

Post-COVID-19 scenario:

When the world went into lockdown due to the Covid pandemic, there was a spike in mental health issues. The world as a whole has seen increasing cases of anxiety and depression. go by Data provided by the Indian Psychiatric AssociationIt has been confirmed that more than 40% of Indians suffer from mental health problems. While some people were quick to buy health policies to counteract the sudden rise in medical costs, it was equally important for them to check whether the policy covered mental health issues as well.

For a long time, health insurance policies in India only covered physical illness. We can feel the shift in this trend now, unlike the previous trend now, some insurance companies offer coverage for mental disorders as well. This shift is in line with the guidance given by the Insurance Regulatory and Development Authority of India. The regulator required providers to add mental illness to their regular health insurance coverage and to provide health insurance to buyers who had taken antidepressants or opioids in the past as well.

Mental Health Care Act: Legislation for the People

after a year Mental Health Care ActPeople can now benefit from many services and if the services are not available they are eligible to request compensation from the state. These rights include the right to confidentiality, the right to access medical records, the right to live in the community, protection from and against inhuman treatment, and the right to equality and non-discrimination as provided by law. Many other protections are provided to people with mental illness under Section 21 of the Mental Health Care Act 2017 to ensure that they receive equal treatment for people with a physical illness. Article 21 (4) of the law ensures that there is no discrimination in insurance coverage for mental and physical patients. in case if Sheikha Nischal v. National Insurance Company Limited and Anr (WP(C) 3190/2021) dated April 19, 2021And the The Delhi High Court handled cases related to mental illness and their insurance coverage. The court noted that Section 212 of the Mental Health Care Act 2017 recognizes the right to equality and prohibits any kind of discrimination related to mental illness, thus insurance companies must make provisions for medical illness on the same basis as physical illness.

However, the definition of mental illness makes two explicit exceptions, first, it excludes mental retardation and second, the consequences of alcohol or drug abuse. The Mental Health Act 1987 did not provide a specific definition of mental illness, but rather defines a person with a mental illness as someone who needs treatment for a mental illness other than mental retardation. Even Substance Use Disorder (SUD) is not mentioned in previous legislation, with the exception of Chapter III. However, the definition of mental illness in current legislation has included SUD. Adhering to IRDAI’s guidelines, some insurance companies have begun to provide mental health coverage in their existing services. Insurance policies offered by these companies usually cover the costs of inpatient hospitalization for psychiatric patients, while outpatient services such as counseling or therapy are reimbursed only if they are covered. The cost incurred in the hospital for inpatient treatment related to any mental illness is covered by mental health insurance. The cost of diagnosis, treatment, medication, hotel, etc. is included provided the patient is hospitalized for at least 24 hours. Coverage may vary and sub-limits are applicable depending on the insurance company. However, insurance companies do have some exceptions for mental health treatments. There are reservations about a portion of the outpatient fee coverage as it is rarely covered and any mental illness related to drug or alcohol misuse. Mental retardation or intellectual disability is the main exception to the policy.

What kind of treatments should be covered under insurance

The Mental Health Care Act of 2017 states:Every insurance company must provide medical insurance for the treatment of mental illness on the same basis as is available for the treatment of physical illness. “The main factor that insurance companies should consider is deciding what types of treatment should be covered under mental health insurance. Literal interpretation of insurance” same basis“As physical illness will cover cases that require hospitalization and immediate care. Psychotherapy sessions needed to treat a mental health problem need several treatment sessions. They require a long period of time to recover. Thus, this anomaly is a challenge to medicine companies decide Insurance on what basis will cover the insured whether on the basis of the number of hospitalization days or the total estimated time of treatment For mental illness the treatment methodology varies One patient cannot be expected to recover with the same treatment given to others The Mental Health Care Act fails to address this adequately Direct in legislation.This leaves an unequal field where insurance companies will have the advantage of taking advantage of this legal gap.They are free to decide on coverage of cases a person with mental illness should undergo treatment that suits the individual or the treatments generally accepted in this areaFailure Number Many are insured to have access to proper care and treatment.

Pre-existing diseases and underwriting

For physical illnesses, insurance companies have an estimate of the premiums for a particular group of illnesses. They insure the premiums based on these terms and conditions. Mental illness cannot be linked to some prevalent illness or lifestyle habit. Therefore, underwriting becomes difficult, as they have to determine the reasons for charging higher premiums, if necessary. The Mental Health Care Act does not provide adequate safeguards to protect people who are most vulnerable to potential mental illness due to stress or other factors. For example, migrant workers and widows are more likely to develop mental illness. The insurance company can exploit this loophole to justify higher premiums.

suicide attempts

The Mental Health Care Act of 2017 states that care and treatment must be provided to a person who has attempted suicide under severe stress. Suicide attempts are frequent with mental illness. The law fails to provide whether treatment should be covered for all suicide attempts by insurance companies or only those diagnosed with a particular mental illness prior to the suicide attempt.

Provide access to medical history for insurance companies

All insurance companies require access to medical records to determine insurance claim and premium charges. It may require a history of procedures performed, treatments applied, diagnosis methodology etc. for the person with mental illness. The Mental Health Care Act does not provide how and what kind of information is needed to share. Article 23 of the law provides for the right to confidentiality. However, it does not specify how much information should be shared and what information can be supported.

With the implementation of MHCA and IRDAI guidelines, mental health services are bound to be affordable and accessible and will go a long way in removing stigma from mental health conditions in India. There is a growing acceptance of mental health issues in India’s youth which will largely lead to dedicated coverage of mental health issues and associated disorders. While there are certain aspects that require additional guidance such as the cost of outpatient clinics, counseling, treatment and treatment, we can see an increased awareness of the topic and it will be interesting to see how the government goes to address these issues.

Opinions are personal.


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