The Supreme Court recently issued notice to the Ministry of Health and Family Welfare (MoHFW) and the Insurance Regulatory and Development Authority of India (IRDAI) in response to a writ petition(1) which sought the implementation of the Mental Healthcare Act 2017 and the provision of an action-taken report regarding the measures taken to ensure the provision of insurance cover in India for mental illnesses. The public interest litigation averred that:
- the situation with respect to the availability of mental illness cover remains the same despite one year having passed since the IRDAI issued directions in this respect; and
- no follow-up action has been taken against insurers for non-compliance.
The writ petition before the Supreme Court is one of the many recent events that have brought forth the issues surrounding mental healthcare in India. According to the MoHFW, more than 90% of mental health cases remain untreated due to poor awareness of available treatments and the associated stigma.(2) In its report,(3) the World Health Organisation urged governments to consider moving towards specialised treatment of mental illness through counselling and therapy instead of resorting to admission to mental institutions and asylums. Further, the MoHFW has noted that most mental and behavioural disorders can be successfully prevented and treated in an affordable manner.(4)
Owing to rising concerns around mental healthcare in India and the legislative push to recognise the crucial role that medical insurance plays in the treatment of mental disorders globally,(5) the IRDAI has in recent years introduced certain measures for the insurance sector aimed at including the treatment of mental illness in the coverage offered under insurance policies. This article summarises the key developments introduced to the Indian insurance framework with respect to mental health.
Since the definition of 'health insurance business'(6) under the Insurance Act 1938 (as amended) does not expressly recognise or exclude any coverage for psychiatric or psychological disorders, Indian insurers have continued to design and sell health insurance products which cover hospitalisation and medical expenses and are aimed primarily towards physical ailments. Further, health insurance policies in India have traditionally contained exclusions in the form of "any mental illness, psychosomatic dysfunction, or problems connected to psychiatric conditions" or comparable terms,(7) and available coverage has largely been restricted to limited government-run schemes.(8)
Mental Healthcare Act and IRDAI circular
In 2007 India signed and ratified the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD). Under Article 25(e) of the UNCRPD, signatory nations must prohibit discrimination in the provision of health insurance against persons with disabilities.(9)
Pursuant to India's obligations under the UNCRPD, the Mental Healthcare Act was passed in 2017 (in force from 29 May 2018). The act accords parliamentary recognition to the "right to access mental healthcare and treatment" for all persons without discrimination and decriminalises suicide attempts.(10) Further, under Section 21(4) of the act, insurers must provide medical insurance for the treatment of mental illnesses(11) on the "same basis as is available for [the] treatment of physical illness", in accordance with Article 25(e) of the UNCRPD.
The IRDAI subsequently issued the Circular on the Mental Healthcare Act 2017 of 16 August 2018 (IRDAI circular), pursuant to which all insurers were "directed to comply" with the act with immediate effect. Further, on 22 October 2018(12) the IRDAI issued a letter to insurers advising them to establish an underwriting policy relating to coverage for mental illness and communicate this policy with their officials and sales persons across all branches.
One year after the IRDAI circular was issued, the IRDAI issued its Guidelines on Standardisation of Exclusions in Health Insurance Contracts of 27 September 2019 (exclusion guidelines), aimed at standardising the exclusionary clauses under various health insurance policies in India. Chapter II of the exclusion guidelines expressly prohibit insurers from excluding the treatment of mental illness, stress and related disorders from the scope of cover of all health insurance policies (other than personal accident and travel policies).
Insurers must ensure compliance by modifying their existing health insurance products within one year (ie, by 1 October 2020).
Pursuant to Regulation 8 of the IRDAI (Health Insurance) Regulations 2016, all insurers must prepare a board-approved underwriting policy for health insurance. The policy must stipulate, among other things, the insurer's:
- objective underwriting parameters for differentiating the various classes of risk being accepted; and
- approach to offering health insurance "not only to standard lives but also to sub-standard lives".
Drawing reference from the above, the IRDAI recently directed all insurers to publish on their website their underwriting philosophy and approach to offering insurance coverage to persons with disabilities and persons affected with mental illness and HIV/AIDS.(13) The deadline for compliance is 1 October 2020.
With the passage of the Mental Healthcare Act and subsequent IRDAI directions, the scope, extent and availability of mental health insurance in India has gained renewed interest.(14) While most insurers have modified their insurance products to delete the traditional exclusion of mental illness, ambiguity remains around certain practical aspects of mental illness coverage.
While insurers must extend coverage to mental illness treatment on the same basis as is presently provided for physical ailments, the lack of extensive home-grown actuarial data and relevant claims experience raises some hurdles in accurately pricing and underwriting coverage for mental illness. Further, since most traditional forms of health insurance policy typically cover only inpatient care and hospitalisation, there may be a gap in coverage which requires insurers to design novel products specifically focused on mental healthcare and covering therapy, rehabilitation and medication-based outpatient treatment.(15)
The implementation of the Mental Healthcare Act and the IRDAI's directions will facilitate the availability, accessibility, affordability and destigmatisation of mental health treatment across India and provide impetus to improve its existing mental health infrastructure. With the onset of the COVID-19 pandemic and the growing acceptance of mental health issues among urban youth in India, innovative products with tailored coverage for mental illnesses and related disorders will likely be launched.
While certain practical concerns remain (eg, the applicable underwriting norms, disease classification, coverage of outpatient costs for counselling and therapy, pre-existing diseases and the recognition of mental health professionals), greater clarity is expected as insurers' experience grows and they acclimatise to the developing legal requirements. With the increased interest that this topic has garnered in the past year, it will be interesting to see whether any further guidance in this regard is forthcoming.
Endnotes
(1) Gaurav Kumar Bansal v UOI, Writ Petition (Civil) 425/2020.
(2) Further information on the Mental Health Division of the Ministry of Health and Family Welfare is available here.
(3) The World Health Report 2001 – Mental Health: New Understanding, New Hope.
(4) Mental Health: An Indian Perspective, 1946-2003, Agarwal et al, (pp 10 and 408), Directorate General of Health Services, MoHFW.
(5) National Mental Health Survey of India, 2015-16: Prevalence, Patterns and Outcomes, Bengaluru, National Institute of Mental Health and Neuro Sciences (2016). See also Public Health Foundation of India, "First comprehensive estimates of disease burden due to mental disorders and their trends in every state of India", 23 December 2019.
(6) Section 2(6C) of the Insurance Act, as amended, defines 'health insurance business' to mean "the effecting of contracts which provide for sickness benefits or medical, surgical or hospital expense benefits, whether in-patient or out-patient travel cover and personal accident cover".
(7) RD Pattanayak, Rajesh Sagar, "Health insurance for mental health in India: A welcome step toward parity and universal coverage", 2016, Journal of Mental Health and Human Behaviour (Volume 21, Issue 1).
(8) Please see, Nirmaya health insurance under the National Trust Act (44/1999) and Swavlamban health insurance scheme by New India Assurance Co Ltd and Department of Empowerment of Persons with Disabilities.
(9) Per Article 1 of the UNCRPD, 'persons with disabilities' includes all persons who have "long-term physical, mental, intellectual or sensory impairments which in interaction with various barriers may hinder their full and effective participation in society on an equal basis with others".
(10) Sections 18(2) and 115(1) of the Mental Healthcare Act.
(11) The term 'mental illness' is defined under Section 2(s) of the Mental Healthcare Act to mean:
a substantial disorder of thinking, mood, perception, orientation or memory that grossly impairs judgment, behaviour, capacity to recognise reality or ability to meet the ordinary demands of life, mental conditions associated with the abuse of alcohol and drugs, but does not include mental retardation which is a condition of arrested or incomplete development of mind of a person, specially characterised by sub normality of intelligence. (Emphasis added.)
(12) Parliamentary Question 317 on "Insurance for mental health" of 15 July 2019, tabled before the lower house of Parliament by Member of Parliament Shri Santokh Singh Chaudhary.
(13) Circular on Disclosure of Underwriting Philosophy of Offering Insurance Coverage to Persons with Disabilities and People Affected with HIV/AIDS and Mental Illness Diseases of 2 June 2020.
(14) M Saraswathy, "Four years on, the differently abled, anxiety & HIV patients have no insurance cover. Is IRDAI doing enough?", 6 June 2020.
(15) Surbhit Ahuja and Hansika Kapoor, "How Would Mental Health Insurance in India Work?", 17 March 2019.
