New Mental Health Insurance May Come With Old Loopholes
Last week, the Insurance Regulatory and Development Authority of India (IRDAI) informed insurance companies they are required to make provisions for mental health coverage to be compliant with the Mental Healthcare Act 2017. This giant leap for mankind might, however, come with all sorts of loopholes for providers, reports Livemint.
The legalese that many insurance providers use to escape coverage of physical conditions will now apply to mental health conditions. This means that even though the Act identifies mental illness, in part, as “mental conditions associated with the abuse of alcohol and drugs,” insurers may get out of covering mental health care for such a condition — and with legal blessing.
“One of the rationales of the Act is to not discriminate between mental illness and physical illness in coverage. Now, if an alcohol-induced physical illness leading to hospitalisation like in the case of cirrhosis is not covered, in a similar manner alcohol-induced mental illness too will also not be covered,” Dr. Bhabatosh Mishra, chief operations officer for Apollo Munich Health Insurance Co. Ltd., explained to Livemint.
Thus, mental health insurance will likely come with more limitations than most realize. Usually, health insurance policies cover in-patient hospitalization, and not out-patient treatment. Under such policies, only a few would be able to utilize their insurance for mental health care.
The biggest effect, however, might be on insurance policy pricing, but no one seems to know just what that effect will be. The head of health insurance for Future Generali India Insurance Co. Ltd. described it as having to “go to the drawing board.”
“Premium will have to be revised and Irdai will have to define the term,” another head of health insurance at a general insurance company told The Economic Times.
Which means that while the mandate is a first, big step in acknowledging the growing burden of mental health issues in India, it doesn’t mean much practically unless outpatient treatment policies are developed. Industry insiders appear to think that’s what is on the horizon.
“The circular is a step in the right direction as it will push the industry to focus on developing OPD products,” Jyoti Punja, the chief customer officer of Cigna TTK Health Insurance Co. Ltd., told Livemint.
Whether they come at an affordable price point remains to be seen.