Beware the gaps in insurance policies for mental illness

Mental Health Care Act: Bhaskar Nerurkar, head, health administration team, Bajaj Allianz General Insurance, said, “The Mental Health Care Act of 2017 seeks to address mental illnesses issues and treat it on a par with physical illnesses. Accordingly, as per Sec 21(4) of the Act, every insurer will have to make provision for medical insurance for the treatment of mental illness .” 

Until a few years back, there were no clear guidelines regarding the coverage of mental health-related illnesses. Very few policies covered it, while most excluded it totally. Rakesh Goyal, director of Probus Insurance Broker, said, “Not all insurers cover diseases such as acute depression, anxiety and psychotic disorders, dementia, schizophrenia, etc., in their health policies.” 

Mental illness:  The Act says that mental illness is a substantial disorder of thinking, mood, perception, orientation or memory that grossly impairs judgment. It also hampers the capacity of a person to recognize reality or the ability to meet ordinary demands of life and mental conditions associated with the abuse of alcohol and drugs. 

Gaps in coverage: Here is what you should know about the gaps in health insurance, especially relating to mental health coverage. 

1. OPD:  “If you buy a health insurance policy with mental illness coverage, it will only provide coverage for room rent, medicines and diagnostics, ambulance fees and treatment costs. However, having adequate outpatient department (OPD) coverage is crucial for people with mental illness as it requires prolonged consultations,” said Siddharth Singhal, business head- health insurance, Policybazaar.com. 

Moreover, even if the policy offers outpatient counselling or therapy coverage, one can avail it only after a waiting period of 2-3 years. 

2. Sub-limits: Policies may have a sub-limit clause on the sum insured for mental illness coverage. Ankit Agrawal, CEO and co-founder, InsuranceDekho, said, “The policy coverage for mental illness may differ, depending on the underwriting procedures, type of policy and the insurer you opt for at the time of buying a health policy. For instance, all Niva Bupa health policies cover mental illnesses. In such policies, mental and physical illness are considered the same. However, some of the older policies like Health Premia and Heart Beat have a sub-limit on certain mental illnesses, but policies like Re-Assure offer full coverage till the sum insured is exhausted.” 

3. PED mental health issues: Like many other pre-existing diseases (PED), the insurer decides on the medical underwriting and waiting period for pre-existing mental disorders. This can  usually be for 3-4 years. Besides, the policy may not cover recurring mental conditions that imply indiscipline in following the prescribed treatment and medications. 

4. Critical illness policies: These policies provide cover for specifically named ailments. “Mostly, critical illness policies do not cover all types of mental ailments. Often such policies cover a fixed number of critical illnesses. For instance, HDFC Ergo’s Critical Illness Plan – Platinum covers Alzheimers among 15 other critical illnesses,” said Agrawal. 

5. Hospitalization challenges: There are a few hospitalisation challenges such as the availability of good in-patient care facilities for mental illnesses—also, the duration of treatment warrants prolonged, frequent and supervised treatment leading to considerable expenses. 

Apaar Kasliwal, executive director, policyboss.com, said the availability and accessibility of specialized treatment units would determine the quality of care provided and subsequent utilization of insurance covers. The indemnity policy typically covers inpatient treatment, while counselling or therapy is covered under the OPD rider. You may opt for a rider along with health insurance policies and get reimbursement for counselling. 

“Insurers will have to set up supporting infrastructure for mental illness treatment with specific network hospitals and clinics. This directive will also help standardize the cost of treating various mental illness ailments. Insurers will also have to chart out a transparent claim process specific to mental illness treatment,” said Kasliwal.