Lockdown blues: Health insurance excludes major costs in treating mental health

Mahavir Chopra

The pandemic and the lockdowns have brought in more than just an economic slowdown. When I speak to friends and relatives, I realise that the lockdown has led to a deterioration in what is called work-life balance, instead of improving it. Hectic working conditions, coupled with uncertainty, may have resulted in increased pressure, stress, and anxiety, causing a significant imbalance in mental health. No wonder health apps are reporting 2-3 times rise in patients consulting for psychological disorders.

Mental health cases abound

A whopping 197 million in India are reported to be suffering from mental illnesses. India is the depression capital of the world. At this scale, we should have had a flourishing, well-developed mental healthcare ecosystem in the country, providing affordable counselling and treatment. But the truth is that mental health requirements in India remain under-served. The demand-supply gap results in therapy sessions being expensive – ranging from Rs 800 to Rs 5,000 per session. The requirement of therapy is said to be between six and 20 sessions, depending on the complexity and severity of the condition. In addition, a chronic patient could require medicines, clinical tests, and occasional hospitalisation.

These are expensive and inaccessible for the larger population in the country. No wonder, the treatment gap ranges from 70 to 90 per cent, depending on the type of disorder. India is sitting on a mental health crisis time bomb. There is an urgent need for a financing mechanism to support this treatment gap.

Traditionally, health insurance policies excluded psychiatric disorders from their scope of coverage. However, here's the new mandate under the Mental Healthcare Act 2017: “Every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for the treatment of physical illness.” IRDAI issued a circular in this regard in August 2018.

Let’s understand the coverages, limitations, and hurdles with respect to the available coverage.

Coverage

Most insurers followed the circular and removed the exclusion from their policy document. But hold your horses before you celebrate.  It's important for you to first understand that health insurance is primarily a hospitalisation cover. The policy generally excludes coverage for routine medical expenses, such as preventive medical tests, routine medication costs and doctor consultations. Now, since the Act as well the IRDAI circular requires the coverage to be applicable on the “same basis,” health insurance for mental illness will essentially end up providing cover only for hospitalisation. People suffering from mental illness very rarely (0.6 per cent cases) need hospitalisation. Their major expenses are on therapy, medicines and tests, which still won't get covered under health insurance.

Underwriting

Since this is the first time mental health is being covered in the country, insurers have called out the lack of local data available for them to be able to price this coverage. Although insurers may not hike their premiums, they are likely to follow stringent underwriting guidelines to protect themselves from anti-selection. This will most likely impact people who already suffer from mental illness.

Waiting period

People with pre-existing mental illness, who do get an insurance policy after due declaration in the proposal form will be required to go through the four-year waiting period before they can make a claim for hospitalisation expenses related to mental illness. People with pre-existing mental illness who were already insured before the IRDAI notification in August 2018 are likely to be covered four years after the date of issuance of the first policy. People who were diagnosed with mental illness after the issuance of their health insurance policy will be covered for mental illness without any waiting periods.

Lack of active treatment

Mental illness hospitalisation may be prescribed only for monitoring and stabilising a patient, and may not require active treatment. Since health insurance only covers the active line of treatment, there can be disputes with respect to hospitalisation claims in the future.

Because of the lack of local data, reinsurance support and a formal mental healthcare ecosystem, it is still a long way to go before the regular costs of mental illness can be covered effectively through insurance.

It is a proven fact that a significant amount of mental illness is induced by work. Employers, common interest groups such as trade associations, local communities can come together and fund an affordable, technology-leveraged mental healthcare system for their employees or members at affordable costs. This could have a great return on investment (ROI), given that research suggests four times profit increase from the improvement in productivity by spending once on the mental healthcare of its employees.

(The writer is the founder of Beshak.org)