Does Health Insurance Cover Psychological Disorders?

Recently, there has been a paradigm shift in the coverage of psychological disorders under health insurance. The Insurance Regulatory and Development Authority of India (IRDAI) has directed health insurance providers to cover mental illnesses under the scope of health insurance, which also comprises of psychological disorders.

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    Mental Health Coverage in India

    For a long time, mental illnesses-related expenses were never covered in 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 has been observed in recent years. Mental health issues have gained momentum and people with mental illnesses are coming forward.

    Besides, the one thing that has caught the eye of everyone amidst the ongoing pandemic is the mental wellbeing of people in addition to their physical wellbeing. Mental health has cropped up as one of the major health issues among Indians.

    As per a recent report, nearly 1 out of every 20 people in India suffers from mental health issues. According to World Health Organisation (WHO), about 7.5% of the Indian population suffered from mental disorders as of October 2020.  The numbers have gone up significantly in 2020. During these trying times, the importance of health insurance cover has also increased drastically.

    What is Mental Health or Wellbeing?

    Mental health includes psychological wellbeing, social as well as the emotional well-being of a person. It has a significant impact on the way a person thinks, acts, and feels. Mental wellbeing is important at every stage of life. It also affects our way of handling stress, the way we interact with people and make choices.  

    When a person is said to be suffering from a mental illness, it means his/her inability to think, work, memorize, behave, and even take decisions. It leads to cognitive disorders and even makes performing daily activities difficult.

    Does Health Insurance Cover Mental Health?

    Yes, health insurance in India provides coverage for mental illnesses. Until recently, people did not find it important to cover psychological disorders under medical insurance. But as more people are now coming in the open and talking about mental health issues, there has been an increased awareness of the mental well-being of people. It has now become a priority for almost everyone.

    For this reason, IRDAI had made it mandatory to cover mental illnesses under health insurance in August 2018. The insurance regulator has instructed all insurance companies to treat mental health just like any other physical ailments and include it under health insurance policy coverage. The standardized regulation makes it possible to cover psychological disorders, mental illness, stress, and neural illnesses under the ambit of health insurance policies.

    This development in health insurance by IRDAI would be an important step towards development in the national health insurance ecosystem. Coverage for mental illnesses would help those who are suffering from mental disorders and reduce the resultant financial burden from their heads.

    Benefits of Covering Mental Health in Insurance

    The insured can avail of the following coverage benefits in a health insurance plan with mental health cover:

    • The coverage benefits under mental health insurance are similar to a normal health plan that covers in-patient hospitalization expenses, including treatment costs, diagnostic test charges, medicine costs, ambulance charges, room rent, etc.  
    • The policy covers individuals suffering from a mental disorder affecting their cognitive abilities, memory, thinking, mental capacity, behaviour, and decision-making skills.
    • A few insurance providers offer OPD benefit that covers the cost of consultation, counseling and rehabilitation for mental diseases.

    The inclusions, exclusions, coverage, and premium would vary from one insurer to another.

    Diseases Covered under Mental Health Insurance

    The following diseases are covered under mental health insurance as a mental illness:

    • Acute depression
    • Obsessive-compulsive disorder (OCD)
    • Anxiety disorders
    • Bipolar disorder
    • Post-traumatic stress disorder
    • Schizophrenia
    • Dementia
    • Psychotic disorder
    • Attention deficit or hyperactivity disorder
    • Mood disorder

    Waiting Period under Mental Health Insurance

    Yes. 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 been renewed the health insurance policy for two consecutive years, a claim for mental diseases cannot be raised. Moreover, the insured must be hospitalized for at least 24 hours to be eligible to file a mental health insurance claim.

    The waiting period may vary from one insurer to another. Hence, it is advisable to check the terms and conditions of the mental health insurance policy to know the exact waiting period.

    What Does Mental Health Insurance Not Cover?

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

    • Outpatient consultations (unless specified)
    • Mental illness arising out of alcohol or drug abuse
    • Recurring mental conditions implying indiscipline in following the treatment and medications

    Who Should Buy Mental Health Insurance?

    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

    Simply put, if you want to minimize the financial burden due to mental illnesses then you can consider buying a suitable health plan that adequately covers mental illnesses and related expenses. You can now compare and find health plans on that cover mental illnesses.

    Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

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