Is Mental Illness Covered By Health Insurance?

Mental health is the overall wellness of how you think, regulate your feelings, and behave. It is something we need to be conscious of and deal with care.

There are a lot of factors that affect mental health, including stressful life situations, traumatic experiences, medical conditions etc. In India, nearly 15% of adults require treatment for one or more mental health disorders, according to the National Mental Health Survey 2015-16.

Mental illnesses are becoming more prevalent and with growing awareness, the stigma around them is lessening. Getting treated for a mental illness costs quite a bit and might end up being as rigorous as getting treated for a physical condition.

Are these expenses covered by health insurance? Which mental illnesses are covered?

Let’s find out the answers to these questions and more in this article.
 

First, What Exactly is Mental Illness?

The Mental Healthcare Act of 2017 describes mental illness as a substantial disturbance of thinking, mood, perception, orientation, or memory that impairs judgement, behaviour, the capacity to recognize reality, or the ability to meet daily challenges.

In simpler words, a mental illness can make you incapable of thinking, working, remembering, or even taking decisions like other people. This condition might affect your ability to perform ordinary tasks on a daily basis.

However, the Act excludes mental retardation, i.e., a condition of arrested or incomplete development of the mind of a person.
 

Now Mental Illness Covered By Health Insurance.

Mental illness wasn't covered by health insurance policies in India for a very long period of time.

The IRDAI announced in 2018 that all insurers must cover mental illness as per the Mental Healthcare Act 2017. According to the circular released by IRDAI, every insurer must cover mental illness treatment similar to treatments for physical illnesses.

Mental illness coverage is specifically designed to pay for expenses associated with mental health disorders. It covers illnesses such as bipolar disorder, anxiety disorder, depression, etc.
 

Covers For Mental Illness Available Under Health Insurance

A mental illness cover offers a number of benefits. A few of them are listed below:

• Covers All Costs Related To Hospitalisation

  All expenses associated with mental illness will be covered by health insurance in a similar way to how it covers hospitalization expenses related to physical illnesses or injury, such as the costs of hospitalisation related to inpatient hospitalisation, pre- and post-hospitalization tests, and diagnostic tests.

• Covers A Variety Of Mental Illnesses

Health insurance policies cover mental illnesses that affect your behaviour, memory, thinking, and decision-making abilities, such as -

1. Schizophrenia
2. Schizotypal and delusional disorders
3. Mood disorders
4. Neurotic disorders
5. Stress-related disorders
6. Somatoform disorders
7. Acute and transient psychotic disorders, and so on.

The scope of coverage and types of mental illness covered may vary across insurers. You will find a list of such illnesses and coverage in your policy documents.
 

Conditions Associated With Mental Illness Cover

Certain conditions must be met to qualify for mental illness coverage under health insurance. These conditions may vary from insurer to insurer.

Here are a few common ones -

• Only Treatments That Require Hospitalisation Are Covered

  Health Insurance is essentially a hospitalisation cover. The insurer will cover your mental illness expenses only if you are admitted to a hospital for treatment as an in-patient. Expenses incurred during hospital stays are called in-patient hospitalisation expenses, including medical treatment expenses, room rent etc

  Treatment for mental illness in an OPD department is not covered unless explicitly stated in the policy documents. OPD treatment refers to day-to-day consultations and small treatments that do not require hospitalisation. Therefore, health insurance generally does not cover the costs of therapy provided by counsellors or medical professionals.

• First Hospitalisation And Diagnosis Must Occur During The Policy Period

  Some insurers may cover mental illness related costs only if the first hospitalisation and diagnosis for your medical condition happen within the policy period. Therefore, if you have been diagnosed with a mental illness and were admitted for treatment before purchasing the policy, a few insurers may not cover the expenses.

• Treatment Must Be Taken Under A Qualified Psychiatrist

The insurance company will cover your expenses only if the treatment is provided by a medical practitioner who -

1. Qualifies as a psychiatrist, or
2. Has a postgraduate degree (Ayurveda) in Mano Vigyan Avum Manas Roga, or
3. Has a postgraduate degree (Homoeopathy) in Psychiatry

• Coverage Limit

Mental illness costs may not be covered upto the sum insured in the policy. The coverage of mental illnesses varies across insurers. Some may cover mental illnesses up to the sum insured chosen by you, while some may only cover them up to a certain percentage of the sum insured. Others may set a certain amount limit.

In the Bajaj Allianz-Health Guard plan, the mental illness coverage limit is 25% of the sum insured or Rs 2,00,000, whichever is the lower amount, whereas Aditya Birla's Activ Health Platinum Enhanced plan covers mental illnesses up to the sum insured stated in the policy.

• Prior Approval May Be Required

  A few policies, like Go Digit's Health Care Plus plan, stipulate in their documents that mental illness expenses will only be covered if you get prior approval from the insurance company before getting hospitalised.

  This condition need not be met in case of an emergency. And, a few insurance companies do not impose such constraints.

• Waiting Period

  Mental illnesses may have waiting periods. A waiting period is a specific period of time during which health insurance plans do not cover certain medical conditions or treatments. In many cases, mental illnesses come with a waiting period of 24-48 months.

  Hence, any claim filed for mental illness-related expenses during the waiting period won't be paid by the insurance company and you will need to pay for these expenses out of your own pocket.

  However, there are some plans like Aditya Birla's Activ Health plan and Care Insurance's Care plan, do not have such waiting periods.
   

What is Not Covered By Mental Illness Cover?

Insurance companies will not cover the following -

• Conditions that aren't clinically proven. They will cover your medical expenses only if a diagnosis and tests confirm that you have a specific mental illness.
• Any treatment that does not necessitate hospitalisation will not be covered.
• Any treatment for mental retardation.
• Mental illness caused by alcohol or drug abuse.
   

Getting A Fresh Cover For Someone With A Mental Illness

Even though IRDAI guidelines state that health insurance covers mental illnesses, it does not make providing coverage to people with mental illnesses mandatory.

This means that if you own a health insurance policy already and are diagnosed with a mental illness, the costs of your treatment will be covered as per the policy’s T&Cs. However, this guideline does not ensure new coverage for anyone who has a mental illness. Insurers may choose to cover or not cover people with mental illnesses based on their own internal underwriting policies.

Let’s understand this better with the help of an example -

• Scenario 1

  Ranbir has been renewing his health insurance every year since 2010. He was diagnosed with an anxiety disorder in 2015. Now with IRDAI’s guideline in 2018, the hospitalisation expenses to treat this illness will be covered by his health insurance plan.

• Scenario 2

  Shweta was diagnosed with mild depression in 2020, and a regular medication regime has helped her control it. She recently applied for health insurance, in which she disclosed her mental conditions under her medical history. The insurance company may decide whether to accept or decline her health insurance proposal based on its own underwriting guidelines. The guideline does not make it mandatory to not reject any application for health insurance for people with Mental Illness.
   

Can You Get Health Insurance Coverage For Your Family Member With Mental Illness?

It is tricky to cover members with mental illness, especially because with the new IRDAI guidelines, hospitalisation expenses for mental illness treatment are now covered under health insurance.

Getting coverage for people with mental illness can be challenging, but not impossible. It is important to talk to a good financial advisor or a broker and determinedly apply to various insurance companies until the member is covered.

And, while buying the policy, make sure you make detailed declarations and don’t hide anything. Most importantly, do not completely rely on your advisor to fill out and process the application - this might cause them to miss out on minute disclosures, which will in turn be a problem when you make a claim.
 

Summing Up!

With the growing awareness about mental health, the stigma around it has lessened by miles. We hope this article helped you understand about how mental illnesses are covered by health insurance plans and the associated conditions plus limitations. Make sure you read through your policy wordings to be aware of the ins and outs.