Insurance for Mental Healthcare: IRDAI asks insurers to provide cover for mental illness
After over a year from passing of the Mental Healthcare Bill 2016 and more than two months since it came in force, the Insurance Regulatory and Development Authority of India (IRDAI) has asked all insurance companies to make provision to cover mental illness as well. Will this directive from the insurance regulator enhance the access, affordability and coverage of mental health services and insurance?
 
In a notification, the insurance regulator says, "As per Sec 21(4) of the said Act, every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness. All insurance companies are hereby directed to comply with the aforesaid provisions of the Mental Healthcare Act, 2017 with immediate effect."
 
At present, the health insurance schemes available in India either do not cover or exclude coverage for any mental illness, psychosomatic dysfunction, or problems connected to psychiatric conditions. World over there have been notable progress in providing insurance coverage for mental health, especially post World War II. Yet, non-coverage for mental health or illness have remained a glaring exception on Indian health insurance business. 
 
A countrywide study conducted by National Institute of Mental Health & Neurosciences (Nimhans) in 2014-2015 had revealed a shocking prevalence of mental illness in India. As per the study, at least 13.7% of India’s general population has been projected to be suffering from a variety of mental illnesses and 10.6% of this requires immediate intervention. In all, about 150 million Indians are in a need of active medical intervention, according to the study.
 
A study on 'How India Perceives Mental Health: TLLLF National Survey Report 2018' commissioned by The Live Love Laugh Foundation (TLLLF) reveals, due to the stigma associated with mental illness, a lack of awareness, and limited access to professional help, only 10-12% of these sufferers from India will seek help. 
 
 
However when it comes to insurance coverage for mental health, there are report in which insurers fear about increase in costs. Speaking with The News Minute, Sanjay Dutta, Chief Underwriting Reinsurance & Claims at ICICI Lombard, had claimed that one of the reasons for this is that the market for health insurance is still focussed on inpatient care. “Most mental health treatments currently are done on an outpatient basis and the market is yet to evolve to accommodate this. However, if there are inpatient treatments for mental health problems, not too many places of expertise are currently available for treatment. When there are more such places, market too will grow to accommodate the needs. In the future companies are sure to cover mental health illnesses,” he told the portal.
 
However, the claim about increase in cost for mental healthcare has long been refuted by researchers. In a 2016 research paper titled, ‘Health insurance for mental health in India: A welcome step toward parity and universal coverage’, RD Pattanayak and R Sagar clearly stated that there was no evidence to justify the basis of the ‘cost increase’ fear. “Evidence from an economic review indicated that mental health benefits expansion did not lead to any substantial increase in cost to health insurance plans, measured as a percentage of premiums. In fact, the overall increased cost has not been demonstrated in any of the US states that have adopted full parity. Some places even showed a decrease in overall insurance costs when mental health parity was enacted, which can be due to people receiving treatment earlier in their illness when it is less costly and typically did not require hospitalization,” the research paper says.
 
The mental health insurance coverage will certainly facilitate medical care for mentally ill and improve their outcomes that would benefit the society over the long-term.
 
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Insurance Claims: LIC Tops in Individual Claims while Private Insurers Settled More Group
State-run Life Insurance Corporation of India (LIC) has once again, outnumbered private insurers in terms of the number of claims settled for individual customers.
 
However, in terms of group insurance claim settlement, LIC is found lagging behind private insurance companies, especially during the past two years.
 
While responding to a question in the Lok Sabha, Shiv Pratap Shukla, minister of state in the ministry of finance, said, “As per Regulation 14 of Insurance Regulatory and Development Authority of India (Protection of Policyholders’ Interest) Regulations, 2017, certain procedures such as immediate processing upon receiving a death claim, adhering to timelines for settlement of a death claim, reasons to be stated on rejection or repudiation of the claim, and interest to be paid due to delay on the part of insurer are required to be followed by insurers for claim settlement in respect of a life insurance policy. Regulation 17 of the said Regulations states that every insurer shall have in place proper procedures and effective mechanism to expeditiously resolve complaints and grievances of policyholders and claimants efficiently." 
 
During FY17-18, LIC settled 725,000 insurance claims upon death of the insured, while all private insurance companies settled 104,000 claims. However, in terms of group insurance, these private insurers settled 477,000 claims while LIC settled 284,000 claims. Interestingly, till FY15-16, there was marginal difference between private insurers and LIC, in terms of settling group insurance claims. However, from next year onwards private companies have settled almost double claims each year compared with LIC. This also means that private insurers could be focussing more on groups insurance business than individual insurance policies. 
 
Among private insurance companies, SBI Life Insurance Co Ltd (SBI Life) settled maximum number of individual claims at 18274, followed by Bajaj Allianz Life Insurance Co Ltd (13,176), HDFC Standard Life Insurance Co Ltd (12,289), ICICI Prudential Life Insurance Co Ltd (11,216) and Max Life Insurance Co Ltd at 10,125. However, absolute figures could be misleading.
 
According to the reply given in Lok Sabha, during FY2017-18, there were 519 complaints filed against private insurance companies compared with just 66 against LIC. IndiaFirst Life Insurance Co Ltd topped the list with 137 complaints among private insurers, followed by HDFC Standard Life Insurance Co Ltd (72), and Max Life Insurance Co Ltd at 63 complaints.
 
According to the minister, based on the analysis of claims data of life insurers, if any variation or abnormal discrepancies are noticed, they are taken up with the insurers. "These variations, deviations, discrepancies noticed are also thoroughly checked by the inspection department of Insurance Regulatory and Development Authority of India (IRDAI), during regular onsite inspection. The Authority also conducts focussed online inspection. In case any grave irregularity is noticed in the claim settlement by the insurer, regulatory and corrective measures are initiated accordingly," he said in a written reply.
 
 
 
 
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COMMENTS

Balakumar Paramasivam

10 months ago

Absolute numbers on claims make no sense for comparison as the volume of policies are totally different. The claim - settlement ratio should be the ideal indicator of how good an insurance company in settling claims.

Anowar hussain

10 months ago

Nice

Can Spondylitis Debar You from Getting Health Insurance Cover?
Sunita, 35, is an accounting professional. Having become self-employed a year ago, she applied for a comprehensive health cover for herself. To her dismay, the insurer rejected her application.
 
At the time of application, insurers ask an applicant to fill a proposal form. The form requires you to provide information about yourself, insurance covers you may already have, self and...
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