Lapses in Insurance Coverage for Mental Health – Who is Responsible?
Sayali Mahashur, Amiti Varma  and  Arjun Kapoor 05 August 2021
Almost 10.6% of India’s population lives with a mental illness, shows data from the National Mental Health Survey (NMHS) in 2016. However, even today, it is difficult and costly to access health services and care for mental illnesses across the country. Although health insurance for mental illness can protect from large out of pocket expenses, it is an uphill task. 
 
Until the enactment of the Mental Healthcare Act (MHCA) 2017, mental illness was excluded in all health insurance policies through standardised exclusion clauses, a discriminatory feature against mental illness.  
 
Section 21 (4) of the MHCA makes it obligatory for all health insurance companies to provide medical insurance for the treatment of mental illness on the same basis as for physical illness. This provision is based on the principle of parity, which means only removal of the exclusion clause for mental illness is not enough: the insurance companies are obligated to ensure no discrimination occurs in the types of policies, coverage and terms of insurance coverage provided both to mental and physical illnesses. 
 
However, its implementation has not been straightforward. In 2018, the Insurance Regulatory & Development Authority of India (IRDAI) issued a circular mandating immediate compliance with Section 21 (4) of the MHCA. 
 
This was followed by the Supreme Court issuing a notice to the Union ministry of health and family welfare (MoHFW)  and IRDAI in 2020 about non-compliance of MHCA by insurance companies. This resulted in another circular from IRDAI requiring all health insurance companies to disclose their underwriting philosophy of offering insurance coverage to persons with mental illness by 1 October 2020. 
 
While all major providers have published their underwriting philosophy, the principle of parity has not yet translated to action on ground. Insurance seekers still face denials or delays for coverage for mental illness
 
The standard process to address such discrimination or other grievances, is to make a complaint to the insurance company and then to the IRDAI grievance redressal cell and if the issue is not resolved, the aggrieved party can approach the Insurance Ombudsman. 
 
At this stage, if the matter is still disputed, the aggrieved party can take the legal route, and approach consumer courts or the High Court. 
 
Despite the redressal processes within the IRDAI, individuals have had to approach courts for their rightful insurance claims for mental illness in the recent past, as witnessed in the Delhi High Court, which delivered a landmark judgment on the liability of insurance companies and the IRDAI to comply with the MHCA.
 
In the case of Shikha Nischal vs National Insurance Co Ltd (NIC), Ms Nischal was denied health insurance for treatment of her mental health condition by the insurer citing an exclusion clause from the policy. The clause stated that no coverage would be provided in relation to ‘psychiatric disorder, or intentional self-inflicted injury.’ 
 
The Delhi High Court ruled in favour of Ms Nischal, observing that the IRDAI’s lack of monitoring over insurance companies was an abandonment of its duty to supervise and ensure that the law was implemented by all the insurance companies. 
 
Importantly, the HC also held that all insurance companies were liable to adhere to Section 21(4) of the MHCA with effect from the date it came into force, implying that all health insurance policies since this date would have to include mental illness irrespective of any considerations. This is a landmark judgement that sets an important precedent.
 
While the law is clear about the obligation of insurance companies, we ask, to what extent are insurance companies implementing the MHCA, in letter and in spirit? 
 
And equally importantly, is the IRDAI, as a regulator and monitoring agency, doing their part to uphold the principles put forth by the MHCA?
 
The India Mental Health Observatory (IMHO) undertook a systematic review of health insurance policies that were introduced or revised during the years 2019-2021 to assess whether they comply with Section 21 (4) of the MHCA. It reviewed over 400 policies and found all but six policies by two providers, Universal Sompo General Insurance and Navi General Insurance, had not removed mental illness from the standard exclusion clauses. 
 
The IMHO has published a summary of their analysis as a dashboard of health insurance policies. with the hope that people with mental illness seeking insurance will be able to weigh their options. The dashboard can be accessed here.
 
Findings from the IMHO analysis of policy wordings reveal that certain insurance policies have differential coverage for mental illness. For example, differential waiting periods (35 policies) or lower provision of sum assured (32 policies), thus violating the principle of parity embedded in the MHCA.
 
The IRDAI’s Master Circular on Standardisation of Health Insurance Products (2020) allows insurers to impose sub-limits on specific disease or conditions provided the limitations are based on sound actuarial principles. Many insurance companies have used this to limit the coverage of mental illness. 
 
An important judgement on the matter of sub-limits, the case of Subhash Khandelwal vs Max Bupa Health Insurance Co Ltd, is scheduled to be heard in  the Delhi High Court soon. 
 
In this case, the petitioner purchased an insurance policy from Max Bupa for an assured sum of Rs35 lakh. When the petitioner raised his claim for mental illness, he was informed of a clause in the policy, restricting the sum assured to Rs50,000 with additional conditions. 
 
Since the matter of restriction on sum insured is sub-judice, the Delhi High Court’s judgment on this issue can potentially shape future action around discrimination against mental illness through differential terms in insurance policies. 
 
Beyond sub-limits, a frequent exclusion within insurance policies is coverage for ‘self-inflicted injuries’ or ‘attempted suicide.’ 
 
Official estimates suggest India has a suicide rate of 17.9 deaths by suicide per 100,000 population and the number of attempts is estimated to be 20 times higher. 
 
Attempt to suicide is related to severe stress and mental health conditions and is likely to involve treatment or hospitalisation for physical injuries. Attempted suicide or self-inflicted injury is not a standardised exclusion approved by the IRDAI and thus, the frequent exclusion by insurance providers is discriminatory. 
 
Section 115 of the MHCA creates a presumption that a person attempting suicide is under severe stress and cites “the appropriate Government shall have a duty to provide care, treatment and rehabilitation to a person, having severe stress and who attempted to commit suicide, to reduce the risk of recurrence of attempt to commit suicide.” 
 
Following this, it is imperative that coverage for treatment related to suicide is included by all health insurance providers and the IRDAI ensures this is upheld.
 
While these examples are representative of current practice among insurance companies, the IMHO also found the IRDAIs’ Master Circular (2020) itself permits the exclusion (under Exclusion 12) of treatment for substance use and any addictive condition from health insurance coverage. This is in violation of the MHCA. 
 
Substance use disorders are highly prevalent in India with estimates showing 22.4% of population above the age of 18 are affected by substance use disorders. Addiction and substance use disorders are recognised under section 6 of the ICD-11 as requiring both psychiatric and medical intervention. 
 
The MHCA too recognises “mental conditions associated with the abuse of alcohol and drugs” as a mental illness. Substance use disorders are treatable conditions, yet there remains a high gap in care. Data from the NMHS 2016 estimates a gap of 86% for alcohol use disorders, where a majority of those who require treatment for alcohol use disorders do not seek, receive or have access to appropriate care. 
 
Thus, by authorising the exclusion for addiction use disorders for insurance coverage, the IRDAI is enabling this gap in access to treatment.
 
The MHCA provides a robust legal framework for the treatment for mental illness and clearly states the right to medical insurance. The next line of responsibility is with the IRDAI, the regulator, to play a more proactive role in supervision, ensuring that insurance companies comply with the letter and spirit of Section 21 (4) of the MHCA. 
 
The IRDAI should, with immediate effect, remove the exclusion clauses for addiction disorders and exercise its supervisory jurisdiction to ensure insurance companies don’t discriminate against persons with mental illness.
 
Ultimately, it is not the responsibility of individuals to seek legal recourse for their rights to health insurance. However, until insurance companies and the IRDAI abide by their legal obligations to ensure that every individual has access to affordable mental healthcare without discrimination, citizens may have to continue the laborious task of advocating for themselves, using the Delhi High Court judgement as a precedent to exercise their right under the law.
 
Comments
hardik.mehta.3009
4 months ago
Request to share review link for HDFC energy-diabetes-insurance-plan.
hardik.mehta.3009
Replied to hardik.mehta.3009 comment 4 months ago
and also Request to share review link for HDFC health Medisure Super Top Up.
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