How health cover for the mentally ill works

Mental health is finally getting the attention it deserves. Insurance Regulatory Development Authority of India (Irdai) this month introduced new rules that mandate every insurance company to cover problems, including genetic diseases, mental illnesses, and menopause-related disorders. In addition, health insurance cover would also be extended to the use of drugs or anti-depressants advised by medical practitioners during the course of treatment.

While the inclusion of mental illness in health insurance coverage may wipe out the lingering disparity between physical problems and mental illnesses, mere implementation of guidelines by Irda will be of no help unless the insurance companies introduce meaningful OPD products. 

The waiting period clause

Pre-existing disorders will, however, be continued to be excluded with a maximum waiting period of two years under the health insurance plans. This raises the question as to whether people with pre-existing mental health problems have to abide by the mandatory waiting period as per the policy's terms and conditions. If yes, does this contradict the purpose for which Irdai had brought forth these guidelines? Raj Khosla, founder, and managing director, MyMoneyMantra.com says, “Irda's current proposals on non-exclusion of mental health problems or age-related illnesses and exclusion of the listed pre-existing illnesses are not contradictory. If implemented, this will be a step in the right direction, resulting in rationalisation and standardisation of the exclusions in the health insurance contract.” 

With no specific guidelines concerning the waiting period, insurance companies may enjoy a free hand in deciding the same while extending health cover for both pre-existing mental health problems or those diagnosed after the policy has been bought. 

Nature of cover

Health insurance plans may be bought for individual self or as family floaters to cover the entire family. Subramanyam Brahmajosyula, head - underwriting & reinsurance, SBI General Insurance, says, “As far as family floater policies are concerned, the fact that one person is suffering from, for example, mental illness does not necessarily become a reason for rejecting a family floater cover. The maximum number of members who can be covered under a family floater policy are four (self, spouse and up to two dependent children).” This means that customers can avail the benefits of individual plans or family floater policies as per their needs. 

“If a proposal is accepted after due evaluation, we would not normally impose any restriction on benefits such as room rent, ICU charges, consultancy charges, etc,” added Subramanyam.

Extent of cover

Depending on need, one can opt for any amount of cover. Shreeraj Deshpande (principal officer and officiating CEO), Future Generali General Insurance, says, “We have a wide range of health products offering health coverage ranging from Rs 50,000 to Rs one crore. Customers with a history of mental illnesses, menopause-related problems, and neurodegenerative disorders can choose the sum insured as per their need and we will be able to issue policies as per underwriting guidelines as well as policy terms and conditions of the particular product.” 

Benefits intact

Apart from the nature and extent of cover, customers choose plans based on the benefits promised to the insured. Cashless hospitalisation, No Claim Bonus (NCB) in lieu of claim-free years, etc, are features that customers look into before making their choice of plans. 

Not all hospitals provide mental treatment facilities. This means that insurance companies will now have to tie up with more hospitals that include provision for treatment of mental health issues or psychiatric rehabilitation centres to avail the cashless benefits to their customers. Deshpande says, “We are already providing cashless facilities for our customers through our impanelled hospitals. Most of our network hospitals provide treatment for mental diseases also. We are always expanding our network to meet the customers' requirements and the same is done within the framework of regulatory provisions.”

The implementation of the new guidelines does not prohibit or impede the policy renewal process. Shanai Ghosh, chief marketing and commercial strategy, Edelweiss General Insurance, says, “All customers can renew their policies each year, and renewal shall be offered lifelong except on grounds of misrepresentation, provided these policies are renewed in time.” 

Companies such as Edelweiss General Insurance had introduced added benefits including zero discharge time, guaranteed bed and zero deposit for their customers. Explaining how these benefits would be extended to mentally distraught policyholders too, Ghosh says, “These services would be available to all policyholders.” 

In addition, provisions, including pre- and post-hospitalisation expenses are benefits that decide the feasibility of any health insurance plan before it is bought. Ravi Vishwanath, ED and CEO, Reliance Health Insurance, says, “Our health insurance plan offers also offers 90 days pre and 180 days post-hospitalisation benefit. Customers requiring hospitalisation due to menopause-related problems and neurodegenerative disorders can claim all medical expenses arising out of the treatment, during the full course of 270 days under pre and post hospitalisation benefit up to the sum insured level.”

Insurance prices

The effect of Irda's guidelines on premium charges is yet to be seen as insurance companies are busy comprehending the draft guidelines and deciding their plans accordingly. However, an increase in the scope of coverage is bound to push the premium prices higher. 

No bar on incentives

In-built policy benefits including restore benefit, multiplier benefit, etc, are factors that distinguish a plan from the other. Subrata Mondal, executive vice president, Iffco Tokio General Insurance, says, “All policy benefits like restoration of the sum insured, etc, will continue as they are incentives for pursuing good health practices.” 

The concept of mental health has always been deemed a taboo in India. Lack of awareness and misconceptions about the same have only aggravated the conditions under which they are treated. The burden of expenses on long-term out-patient treatment (OPT) has resulted in limited treatment options. Naval Goel, CEO and founder, PolicyX.com, says, “The new guidelines by Irda are highly impressive. Increasing the basic health insurance plan with such added features and extended coverage will surely increase the penetration rate of health insurance in India. With such a wider cover, people who fall in any of the aforementioned categories can easily invest in the appropriate plan and can get the required cover on time.”