Does Health Insurance Cover Psychological Disorders?

What are Psychological Disorders?

Psychological disorders refer to mental conditions or behavioural patterns that involve unsettling or atypical thoughts and feelings. It is a type of mental illness or disorder that significantly impacts the way a person thinks, acts and feels. It also affects the way a person handles stress, interacts with people and takes decisions.

Some of the most common psychological disorders include:

• Depressive disorders
• Bipolar disorders
• Anxiety disorders
• Stress disorders
• Schizophrenia and other psychosis
• Sleep disorders
• Eating disorders
• Dissociative disorders
• Dementia
• Neurodevelopmental disorders

A psychological disorder can affect different people differently. In severe cases, it can lead to cognitive disorders and even make performing daily activities difficult. This is why the mental well-being of a person is important at every stage of life.

Mental Health Coverage in India

For the longest time, medical expenses incurred on the treatment of mental illnesses, including psychological disorders, were never covered by health insurance in India. Only physical health ailments and disorders were included in the ambit of health insurance plans.

But fortunately, a drastic shift in the same was observed in recent years. Mental health issues gained momentum and people with mental illnesses started to come forward. more people started coming in the open and talking about mental health issues. As a result, there has been an increased awareness of the mental well-being of people.

Eventually, the Mental Healthcare Act, 2017 was enacted on May 29, 2018 and the IRDAI made it mandatory for all insurance companies to cover mental illnesses under health insurance. The insurance regulator had instructed insurers to treat mental health just like any other physical ailments and offer health insurance coverage for it. This standardized regulation was expected to bring psychological disorders, mental illnesses, stress, and neural illnesses under the ambit of health insurance. But most insurers did not amend their policies and mental illness coverage was not widely available. However, during the COVID-19 pandemic, the mental well-being of people also came into focus in addition to their physical well-being. According to World Health Organisation (WHO), about 7.5% of the Indian population suffered from mental disorders as of October 2020. As per another report, nearly 1 out of every 20 people in India suffers from mental health issues.

Hence, the IRDAI directed all insurers to make provisions to cover the treatment of mental illnesses under health insurance by October 2020. Despite this, there was a delay in implementation and eventually, the insurance regulator ordered insurance companies to amend their health insurance plans to cover the treatment cost of mental illnesses latest by October 31, 2022.

Are Psychological Disorders Covered Under Health Insurance?

Yes, health insurance in India provides coverage for psychological disorders under the mental illness cover as per the Mental Healthcare Act, 2017. With the implementation of this Act, health insurance plans consider mental illnesses at par with physical injuries and thus, cover the medical expenses incurred on their treatment. Besides, benefits like cashless treatment and no claim bonus apply to mental illnesses, including psychological disorders, just like physical ailments.

However, the coverage for a psychological disorder varies from one insurance plan to another. While some plans may cover hospitalization expenses only, OPD plans may cover the cost of outpatient consultations and therapies taken for the treatment of a psychological disorder.

Broadly, health insurance for psychological disorders provides coverage for medical expenses incurred on hospitalization, OPD consultations, diagnostic procedures, medications, road ambulance service, therapies, counselling, room rent, rehabilitation, etc. depending on the policy purchased by the policyholder. Policyholders are advised to go through their policy documents to know the exact coverage available.

Waiting Period for Covering Psychological Disorders Under Health Insurance

As per the latest regulation of the IRDAI, all health insurance plans need to offer medical coverage to people suffering from mental illnesses, including psychological disorders. However, the coverage is not available from day 1 under most plans. This is because mental health insurance comes with a waiting period just like pre-existing diseases.

Usually, a health insurance policy provides coverage for mental illness after a waiting period of 2 years. Unless the policyholder has renewed the health insurance policy for two consecutive years, a claim for mental diseases cannot be raised.

However, the waiting period may vary from one insurer to another. Hence, it is advisable to check the terms and conditions of your health insurance policy for psychological disorders to know the exact waiting period.

What Does Health Insurance for Psychological Disorders Not Cover?

A mental health insurance policy does not cover the insured for the following:

• Psychological disorders or complications arising out of alcohol or drug abuse, dependence and withdrawal
• Self-inflicted injury or suicide attempts

Who Should Buy Mental Health Insurance for Psychological Disorders?

In the current stressful lifestyle, more and more people have become vulnerable to mental illnesses like depression. This makes it necessary for everyone to opt for mental health insurance coverage. Besides, people who have a family history of mental illness should definitely buy a health insurance policy covering mental diseases as they are more prone to them. Moreover, people who have suffered from any traumatic experience of losing a loved one or an accident should also purchase a mental health insurance policy.

Long Story Short

Health insurance coverage for mental illnesses, including psychological disorders, is an important step towards development in the national health insurance ecosystem of India. It would help people who are suffering from mental disorders and reduce the resultant financial burden on their heads.

So, if you want to minimize the financial burden posed by psychological disorders, then you can consider buying a suitable health plan covering mental illnesses. You can easily compare and find health plans on Policybazaar.com that cover mental illnesses.