Introduction
The Supreme Court recently issued notice to the Ministry of Health and Family Welfare (MoHFW) and the IRDAI in response to a writ petition1 seeking implementation of the Mental Healthcare Act 2017 (Act) and provision of an 'action taken report' with respect to the measures taken to ensure provision of insurance cover in India for mental illnesses. The public interest litigation averred that the situation with respect to availability of mental illness covers had remained the same despite the passage of one year since the IRDAI issued directions to this effect, and that no follow-up action had 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 the cases remain untreated due to poor awareness on available treatments and the associated stigma2. Following the WHO report of 20013 which urged governments to consider moving towards specialised treatment of mental illness, through counselling/therapy, instead of resorting to admission in mental institutions/asylums, the MoHFW also noted that most mental and behavioural disorders can be successfully prevented and treated in an affordable manner4. At present, the MoHFW notes that more than 90% of the cases in India remain untreated due to poor awareness on available treatments and the associated stigma5.
Owing to the rising concerns around mental healthcare in India and the legislative push in recognizing the crucial role that medical insurance plays in the treatment of mental disorders globally6, the IRDAI in recent years has introduced certain measures for the insurance sector, aimed at including "treatment" of mental illness within the coverage offered under insurance policies. A brief overview of the key developments introduced in the Indian insurance framework with respect to mental health is provided below.
Existing Insurance Framework
Since the definition of health insurance business7 under the Insurance Act 1938 (as amended) does not expressly recognise or exclude any coverage for illnesses which are in the nature of psychiatric or psychological disorders, we note that Indian Insurers have continued to design and sell health insurance products covering hospitalization and medical expenses aimed primarily towards physical ailments only. Further, we note that the 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 in comparable terms8, and available coverage was largely restricted to limited Indian government run schemes9.
Mental Healthcare Act and the IRDAI Circular
In 2007, India signed and ratified the United Nations Convention on the Rights of Persons with Disabilities (UNCRPD). Article 25(e) of the UNCRPD stipulates an obligation on the signatory nations to prohibit discrimination in the provision of health insurance against "persons with disabilities"10.
Pursuant to India's obligations under the UNCRPD, the 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 significantly decriminalises attempt to commit suicide11. Furthermore, §21(4) of the Act imposes a mandatory obligation upon Insurers to "make provision" for medical insurance for treatment of "mental illnesses"12 on the "same basis as is available for treatment of physical illness", in accordance with Article 25(e) of the UNCRPD.
The IRDAI subsequently issued a Circular titled "The Mental Healthcare Act, 2017" of 16August 2018 (IRDAI Circular), pursuant to which all Insurers were "directed to comply" with the requirement stipulated under the Act "with immediate effect". We understand that the IRDAI also issued a letter of 22 October 201813 to Insurers advising them to put in place an underwriting policy in relation to coverage for mental illness, and intimate their officials/sales persons across all branches.
Standardization of Exclusions
A year after the IRDAI Circular, the IRDAI issued its "Guidelines on Standardization of Exclusions in Health Insurance Contracts" of 27 September 2019 (Exclusion Guidelines), aimed at standardizing the exclusionary clauses under various health insurance policies in India. In this regard, Chapter II of the Exclusion Guidelines expressly prohibited Insurers from excluding the treatment of mental illness, stress and related disorders from the scope of cover in all health insurance policies (other than PA and travel).
Insurers are required to ensure compliance by modifying their existing health insurance products within one year (ie, by 1 October 2020).
June 2020 Circular
R8 of the IRDAI (Health Insurance) Regulations 2016 (Health Regulations) requires all Insurers to prepare a board approved underwriting policy for health insurance. The health insurance underwriting policy is required to stipulate, inter alia, the Insurer's objective underwriting parameters for differentiating the various classes of risks being accepted, and approach for offering health insurance "not only to standard lives but also to sub-standard lives".
Drawing reference from the foregoing, the IRDAI has recently directed all Insurers to publish their underwriting philosophy and approach in offering insurance coverage to PwDs and persons affected with mental illness and HIV/AIDS, on their respective websites14. The deadline for compliance is 1 October 2020.
Practical Implementation
With the passage of the Act and subsequent directions of the IRDAI, we understand from various press reports that questions on the scope, extent, and availability of mental health insurance in India have gained renewed interest15. While most Indian Insurers have modified their insurance products to delete the traditional exclusion for mental illness, we understand from industry players that ambiguity remains around certain practical aspects of mental illness coverage.
While Insurers are required to 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 coverages for mental illness. Further, since most traditional forms of health insurance policies typically only cover inpatient care and hospitalization, we note that there may be gap in coverage which requires Insurers to design novel products which specifically recognise the manner of treatment required for mental illness, and also focus on therapy, rehabilitation and medication-based OPD treatment16.
Concluding Remarks
The implementation of the Act and the IRDAI's directions is bound to facilitate availability, accessibility, affordability, and de-stigmatization of mental health treatment in the far reaches of India, and also provide an impetus to existing mental health infrastructure in the country. With the onset of the COVID-19 pandemic and the growing acceptance of mental health issues amongst urban youth in India, it is expected that innovative products with tailored coverage for mental illnesses and related disorders will be launched.
While certain practical concerns presently abound, such as the applicable underwriting norms, disease classification, coverage of OPD costs for counselling and therapy, pre-existing diseases, and recognition of mental health professionals, clarity is expected to arise as and when experience grows and there is acclimatization to the developing legal requirements. With the increased interest that this topic has occupied in the past year, it will be interesting to see if there is any further guidance in this regard.
Footnotes
1 Gaurav Kumar Bansal v UOI and Ors, Writ Petition (Civil) No 425/2020.
2 Detailed Information on the Mental Health Division, Ministry of Health and Family Welfare, available at https://main.mohfw.gov.in/sites/default/files/9903463892NMHP%20detail.pdf (Last accessed on 19 July 2020).
3 The World Health Report 2001 - Mental Health: "New Understanding, New Hope", available at https://www.who.int/whr/2001/en/whr01_en.pdf?ua=1 (Last accessed on 19 July 2020).
4 Mental Health: An Indian Perspective, 1946–2003, Agarwal et al, (pg 10, 408), Directorate General of Health Services, MoHFW, available at https://mhpolicy.files.wordpress.com/2011/05/mental-health-e-book_published10oct20041.pdf.
5 Detailed Information on the Mental Health Division, Ministry of Health and Family Welfare, available at https://main.mohfw.gov.in/sites/default/files/9903463892NMHP%20detail.pdf (Last accessed on 19 July 2020).
6 National Mental Health Survey of India, 2015-16: Prevalence, patterns and outcomes, Bengaluru, National Institute of Mental Health and Neuro Sciences (NIMHANS) (2016), available at http://indianmhs.nimhans.ac.in/Docs/Report2.pdf. Also see, Public Health Foundation of India, "First comprehensive estimates of disease burden due to mental disorders and their trends in every state of India" dated 23 December 2019, available at https://phfi.org/disease-burden-due-to-mental-disorders-and-their-trends-in-every-state-of-india/ (Last accessed on 8 July 2020).
7 §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;"
8 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 Behavior (Volume 21 Issue 1) available at http://www.jmhhb.org/article.asp?issn=0971-8990;year=2016;volume=21;issue=1;spage=1;epage=3;aulast=Pattanayak (Last accessed 8 July 2020).
9 Please see, Nirmaya health insurance under the National Trust Act (44 of 1999), available at http://www.thenationaltrust.gov.in/content/scheme/niramaya.php, and Swavlamban health insurance scheme by New India Assurance Co Ltd and Department of Empowerment of PwDs, GOI, available at http://niepmd.tn.nic.in/documents/swavlamban_scheme-0915.pdf (Last accessed 19 July 2020).
10 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".
11 §18(2) and §115(1) of the Act.
12 The term "mental illness" is defined under §2(s) of the 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;"
13 Parliamentary Question No. 317 on "Insurance for mental health" of 15th July 2019, tabled before the Lok Sabha (lower house of the Parliament) by Shri Santokh Singh Chaudhary, Member of Parliament.
14 Circular on "Disclosure of underwriting philosophy of offering Insurance coverage to Persons with Disability (PWD) and people affected with HIV/AIDS and Mental Illness diseases" of 2 June 2020.
15 M Saraswathy, "Four years on, the differently abled, anxiety & HIV patients have no insurance cover. Is IRDAI doing enough?", 6 June 2020 available at https://www.moneycontrol.com/news/business/economy/four-years-on-the-differently-abled-anxiety-hiv-patients-have-no-insurance-cover-is-irdai-doing-enough-5364391.html (Last accessed on 8 July 2020).
16 Surbhit Ahuja and Hansika Kapoor, "How Would Mental Health Insurance in India Work?", 17 March 2019 available at https://thewire.in/health/how-would-mental-health-insurance-in-india-work (Last accessed on 22 July 2020).
Originally published 28 July, 2020
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