Coordination needed for building mental-health insurance policies

Insurance industry executives say that the recent instruction from the insurance regulator to provide health insurance cover for people suffering from mental illnesses is a progressive move. However, given the varying nature of the diagnoses and treatments, coordination between medical professionals, institutions in the medical industry and health insurance companies will be extremely important.  

Until recently, mental illness was excluded from health insurance policies, barring a few companies, like New India Assurance, Cigna TTK Health, and Max Bupa Health Insurance, among others, who have specialised products that cover one or two forms of treatments.  

The Mental Health Act of 2017 was passed by Parliament and the Insurance Regulatory and Development Authority of India (IRDAI) has asked companies to begin working on extending health coverage for mental-health services. 

On the retail-side, health insurance companies will need to structure new products based on actuarial calculations on the cost of treatments, claims and pricing, and seek IRDAI approval -- which usually takes between two to four months, say insurance executives.   

The Pradhan Mantri Jan Arogya Abhiyaan, or the Ayushman Bharat-National Health Protection Mission (AB-NHPM), can also be extended to cover mental healthcare services, says a senior insurance executive.  

"It's a progressive step in the right direction. We believe it will certainly create awareness, acceptance, and inclusion when it comes to mental illness as any other ailment," says Sapna Desai, chief marketing officer at Cigna TTK Health Insurance. 

Requests for comments were sent to a few insurance executives, all of whom stated that since the notification was only published on Thursday night, they could not comment on pricing and existing historical cost-data on mental healthcare services.  

On August 1 of this year, IRDAI brought in an automatic process for approval for 'use and file' products. 

According to the Mental Health Care Act, the government will set up a Central Authority for Mental Health Services (CAMHS), which would develop quality and service provision norms and supervise different central government establishments. Similarly, state authorities will be set up by various governments.    

The authorities will register mental healthcare professionals such as psychologists and institutions across the country and will monitor the quality of treatments. Further, the CAMHS will be in-charge of developing an authoritative understanding of the various aspects of mental illness for the entire mental healthcare industry. 

This would be in line with international standards in medical and neurological sciences.     

A major concern is that the definition of mental illness ranges from dyslexia, depression and attention-deficit/hyperactivity disorder, which are issues that can be overcome with the help of professionals, to serious illnesses such as aspergers, post-traumatic stress disorder and schizophrenia.    

Each requires a different form of treatment and is entirely subjective to the concerned person with the illness. The treatments could range from the patient consuming multiple pharmaceutical drugs everyday to psycho-therapy, group-based recreational activity or round-the-clock professional care. 

With children, for example, research shows alternative methods such as music or art are very helpful in overcoming deficiencies brought on by mental illness. On the other hand, if we look at a serious mental condition like schizophrenia, the cost of treatment is very high in terms of pharmaceutical expenses.  

"In India, most health insurance policies, more or less, mainly cover hospitalisation. The truth is -- the policies cover hospitalisation costs, but only small amount of the OPD costs, as per product guidelines. The current challenge is that the system needs to be regulated with strong guidelines," Desai said. 

OPD costs refer to out-of-pocket medical expenses like dentistry, diagnostics tests, consultations and, specifically, pharmaceutical bills. 

"This is a step in the right direction as it will push the industry to work on providing a financial cover on the OPD-front as well. To develop an entire ecosystem, standardisation of treatments and consultations in the case of mental healthcare needs to happen," she said.

The safety net of such a healthcare (mental illness) policy will depend on the treatment costs of the specific mental illness, and whether or not it falls within the regulated and authorised list of treatments as notified by IRDAI in its regulations, in tandem with the CAMHS. 

This will require effective coordination between the various players: insurers, regulators across the healthcare and medical industry, including pharmaceuticals, hospitals, doctors and other medical professionals, as well as academics and researchers.