Mental Health Insurance Cover in India Is a Welcome, but Unplanned, Move

An IRDAI notice to all insurers acknowledging that mental and physical illnesses are no different will do wonders to destigmatise the illnesses and to improve mental health literacy.

On August 16, the Insurance Regulatory and Development Authority of India (IRDAI) issued a notice addressed to all insurers, with the subject “The Mental Healthcare Act, 2017.” It directed all insurance companies to provide health insurance for mental illnesses in line with the law passed last year with immediate effect.

This is a wonderful and welcome step, as acknowledging that mental and physical illnesses are no different will eventually do wonders to destigmatise the illnesses as well as to improve mental health literacy. However, the move also seems unplanned, with no guidelines for how insurance companies can adhere to the official instruction. Further, insurance companies seemed unprepared when the Mental Healthcare Act was passed and seem equally unprepared when it’s time to include mental disorders within coverage.

In an earlier piece describing how mental health insurance can revolutionise the industry in India, Some of the implications of providing mental health insurance have already been outlined. For example, “acknowledging that some mental disorders have a biological basis helps determine the actuarial risk of such illnesses and educate relevant stakeholders” (source).

The IRDAI’s step brings to the fore several issues that have riddled the mental health industry with obstacles in proper implementation and provision of services. This is because insurance companies will now become shared stakeholders in the country’s mental health dialogue.

Insurance agencies will need to be wary of several aspects when implementing this instruction. Companies and actuarial scientists working in the sector could start by familiarising themselves with the diagnostic categories of mental disorders. Here, they may decide to adhere to the Diagnostic and Statistical Manual of Mental Disorders 5 (DSM-5), as published by the American Psychiatric Association, or follow the categories outlined in (chapter 5 of) the International Classification of Diseases (ICD-10) on mental and behavioural disorders.

There are some differences in the definitions and coverage of mental disorders across both classifications, and insurance companies will need to draft policies after considering the pros and cons of each system. Moreover, if insuring mental illnesses becomes dependent on the diagnoses – i.e. if claims will necessarily require a diagnosis for reimbursement – there is a chance that the healthcare system may be burdened with over-diagnosis, especially for children.

Second, it will be important to identify treatment modalities covered within the insurance plan. For example, depending on the severity of symptoms, psychopharmacological medication, psychotherapy or both may be required for treatment. In other cases, hospitalisation may be recommended. Therefore, insurance agencies will need to identify the scope of coverage for various mental disorders as well as rely on scientific, evidence-based therapy for the same. For instance, there exist highly structured and effective therapeutic interventions, like cognitive behaviour therapy for depression, that operate with a fixed plan of eight to twelve sessions to address symptoms. Insurers will need to become aware of such practices that their future clients can avail of.

Third, and a related issue, will be to determine adequate licensing for mental health professionals in the country. Although the Rehabilitation Council of India bears the responsibility of registering clinical psychologists in India, there are several mental health para-professionals, including counselling psychologists and psychotherapists, whose licensure is not currently covered. Ideally, the IRDAI notification will push the sector towards ensuring that appropriate professional identification, regulation and registration of mental health professionals across the country happens.

Fourth, it will now be the shared responsibility of insurers and mental health professionals alike to facilitate the acceptance and literacy of mental health conditions across the country. After all, when insurance agencies develop their models of mental health coverage, they will also want to guarantee sufficient buy-in from clients who may already be insured for physical ailments. This pushes the mental health dialogue to new heights, especially in the policy and insurance spaces, furthering the cause of establishing and sustaining mental health infrastructure in an overburdened country.

Although these are a few issues insurance companies should keep an eye out for, there are also several unobservables that are yet to be estimated, especially once policy turns into action. The growing acceptance of mental health issues among the urban youth is an indicator of demand for coverage. Further, whether only health or medical policies will include mental disorders in their coverage is not immediately clear.

This is a paradigm shift in the Indian mental health space, with the potential to change how our country perceives mental illness. Improper implementation at this juncture could set us back several years. Insurers will hopefully acknowledge this policy as a complex yet important move for the overall wellbeing of their clients.

Hansika Kapoor is a practicing clinical psychologist and research author, department of psychology, at Monk Prayogshala, Mumbai.