Journal of Mental Health and Human Behaviour

: 2016  |  Volume : 21  |  Issue : 1  |  Page : 1--3

Health insurance for mental health in India: A welcome step toward parity and universal coverage

RD Pattanayak, Rajesh Sagar 
 Department of Psychiatry, All Institute of Medical Sciences, New Delhi, India

Correspondence Address:
Rajesh Sagar
Department of Psychiatry, All India Institute of Medical Sciences, New Delhi

How to cite this article:
Pattanayak R D, Sagar R. Health insurance for mental health in India: A welcome step toward parity and universal coverage.J Mental Health Hum Behav 2016;21:1-3

How to cite this URL:
Pattanayak R D, Sagar R. Health insurance for mental health in India: A welcome step toward parity and universal coverage. J Mental Health Hum Behav [serial online] 2016 [cited 2019 Jun 17 ];21:1-3
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Full Text

“Mental health must be seen for what it is – a public health issue, no different than other medical disorders.”

According to WHO's analytic framework, the universal health care coverage has three dimensions, breadth (population coverage), depth (service provision), and height (financial protection).[1] Health financing, through either Government/state-run or private health insurance, is thus crucial for universal access and coverage. The recent draft National Health Policy has endorsed the goal of providing “universal access to good quality health-care services without financial hardship as a consequence.”[2] Regulator Insurance Regulatory Development Authority (IRDA) in its draft has proposed to expand the reach of insurance cover to below poverty line (BPL) families in the next 5 years. Each insurer shall prescribe the target in proportion to their market share, and IRDA shall prescribe annual target so as to cover entire BPL population in the next 5 years.

Coming to the mental health specifically, the health insurance schemes typically do not cover/exclude coverage for “any mental illness, psychosomatic dysfunction, or problems connected to psychiatric conditions.” Interestingly, the noncoverage of mental services in the health insurance in India had remained a glaring exception, in spite of other notable advances in mental health.

Considering that health insurance is intricately linked to rights and treatment affordability, a special meeting of Central Mental Health Authority (CMHA) was called in February 2010 by secretary of Ministry of Health with participation of CMHA members, where it was discussed that mentally ill population is a vulnerable population and on their behalf, the health insurance is an important issue to be taken up for the mental health care bill. As a consequence of series of developments thereafter, the drafts of mental health care draft bill in 2010 included a special mention of public and private insurance, which has been emphasized further in the final bill.

The final Mental Health Care Bill (2013) has now stated clearly (under Section 10 – right to equality and nondiscrimination) that the Insurance RDA Act of 1999 shall endeavor to ensure that all the insurers make provisions for medical insurance for treatment of mental illness on the same basis, as is available for the treatment of physical illness.[3] This editorial emphasizes upon the critical need felt for mental health parity in health insurance in India and some of the implications thereof, in light of the international experience.

Historically, insurance policies world-over did not include mental health services until after World War II, when insurers began covering some hospital psychiatric care.[4] Before deinstitutionalization, the private insurers did not have any reason to cover services already paid through the public sector. The emergence of community mental health movement coupled with general hospital psychiatric units paralleled the development of third-party payment/private insurance reimbursement for some psychiatric services in western countries. In the US, over past 25 years, even though the proportion of private firms including mental health coverage has increased, but in the same period, the coverage limitations have become increasingly more stringent. For example, in 1982, only 31% of full-time employees with mental health benefits were subject to separate inpatient day limits, in contrast to 77% by the year 2002 (as per US Bureau of Labor Statistics, 2007).[5] The situation is now changing internationally with several countries introducing legislations ensuring parity of mental disorders (including substance use disorders) with physical disorders, including entitlement to similar health care benefits.

We begin with the basic issue of critically felt need to change the prevailing health insurance status in relation to mental illness. Why? The answers are an admixture of ethical, medical, and practical issues. First, this exclusion amounts to discrimination and such inequitable coverage sanctions discrimination as a policy against vulnerable mental health consumers. The prevailing scenario ensures that the person is not covered for mental illnesses and further, a number of exclusions in the contract, for example, not self-infliction of harm, etc., make it difficult to avail health insurance for these consequences of mental conditions. Second, scientific-medical basis for mental illnesses is now well-known. The past century has seen several advancements in medical science leading to a growing evidence base for psychiatry as a neuroscience and mental illness to be diseases of the brain, and not related to witchcraft, supernatural powers, etc. The thoughts and behaviors of a person are also subject to similar biologically based deregulation as are his blood sugar or bodily temperature. Third, treatments are safe and effective with good outcomes. The availability of these treatments ensure that person needs to be hospitalized only for a minimum required duration. It has expediated the recovery process and an early integration with family and community. After treatment, the mental illnesses show recovery, often leading to normalization of life at home and work. Fourth, costs posed by untreated mental illness significantly exceed the cost of treatment. Beyond the human costs of sufferings, untreated mental illness is poses a huge burden to the society. Five of the ten leading causes of disability worldwide are mental disorders. Depression alone is responsible for 10% of the years lost due to disability due to all causes, even though it is an easily treatable condition often with complete recovery.[6]

A related (but false) concern is that parity of mental health care will lead to large increase in costs, but there is no evidence to justify the basis of this fear. Evidence from an economic review indicated that mental health benefits expansion did not lead to any substantial increase in cost to health insurance plans, measured as a percentage of premiums.[7] In fact, the overall increased cost has not been demonstrated in any of the US states that have adopted full parity. Some places even showed a decrease in overall insurance costs when mental health parity was enacted, which can be due to people receiving treatment earlier in their illness when it is less costly and typically did not require hospitalization.[8]

There are several positive implications consequent to the inclusion of mental illnesses in the health insurance. The mental health benefits legislation has been found to have an association with increased access to care, increased diagnosis of mental health conditions, reduced prevalence of poor mental health, and reduced suicide rates.[9],[10] Further evidence comes from a large sample (36,647 adults aged 18–64 years) of the 2011 National Survey on Drug Use and Health, where it was found that having health insurance was a strong correlate of mental health treatment use (private insurance, adjusted odds ratio [AOR] =1.63; medicaid, AOR = 2.66). Compared to respondents with insurance, uninsured individuals reported significantly more structural barriers and fewer attitudinal barriers to seeking treatment.[11] The Institute of Medicine reports have also emphasized that the basic benefit packages should include preventive and screening services as well as specialty mental health care.[12]

The mental parity can be considered on a continuum from limited to more comprehensive with a broad range of mental health and substance abuse disorders that places no greater restrictions on benefits (e.g., visit limits, treatment limits, annual dollar limits, or deductibles) for mental health services than benefits for physical health services.[4] The United Kingdom and Canada provide health care insurance to mental disorders at parity with other physical disorders. In the US too, a series of legislations viz. Mental Health Parity Act, 1996, Mental Health Parity and Addiction Equity Act, 2010 and the Affordable Care Act, 2010 in the US have led to progressively stronger parity requirements, making it illegal for health insurers to place stricter limitations on coverage of mental disorders. The expansions in insurance coverage under the ACA took full effect in 2014, extending provisions to underprivileged low-income groups.[13] However, it is to be noted that these legislations apply to the insurance agencies which are already offering mental health coverage. They mandate that those insurers (who plan to provide both medical and psychiatric benefits) define and make available specific criteria for medical necessity when it comes to mental health and substance abuse disorder benefits. In addition, it requires that insurers provide specific information and reasons in the event that reimbursement or payment for treatment is denied. As of now, there is no federal legislation in the US making it mandatory for firms to provide mental health coverage. Many state laws, however, mandate that all should provide some level of coverage be provided for mental illness, serious mental illness, substance abuse or a combination thereof. These state mandate laws may not be full parity because they allow discrepancies in the level of benefits provided between mental illnesses and physical illnesses.[14]

It is understandably not easy to realize universal coverage of mental health care in a short period, but ensuring health insurance coverage for mental illnesses is an important step in the right direction. More and more employers also recognize that parity will benefit their employees, as well as their profitability of an organization. For example, McDonnell-Douglas saw absenteeism drop 44% and a substantial saving in medical claims among workers who were treated for mental health and substance abuse disorders.[15]

There are several challenges which are likely to hinder universal coverage mental health care in spite of parity in insurance. India is a big country with varied levels of economic and health development, and the contribution of public sector expenditure on health is dismally low.[16] The contribution of insurance in health-care financing in India is very low. Of the total US $24 million spent on health care in India, private sector spending forms a larger proportion (77%), of which a huge 86% is an out-of-pocket expenditure.[17] Only around 10% of the population is covered through health financing schemes. People in India often do not assert health as a political right.[18] The situation is even more critical when it comes to mental health. Further, it has been seen that the acceptance of all kinds of insurance was significantly lower among psychiatrists (around 40–55%) compared to physicians (65–85%) from other specialties. While reimbursement rates for office-based psychiatric treatment are similar to those for medical evaluation, the need and desire to provide psychotherapy (which has low rates of reimbursements) may be a reason why many psychiatrists do not accept insurance.[18] With most insurance companies focusing on aggressive, short-term management, the long-term psychotherapy geared to the needs of each patient appears to be at risk.[19] Further, the inclusion of substance use disorders at parity to mental illnesses as seen in recent US legislation is a commendable step, but it still remains to be fulfilled in the Indian context.

In conclusion, there is no scientific or logical rationale to exclude mental illness from the realm of health insurance. As India is ensuring universal access to health care, it is a welcome step indeed that insurance parity is being ensured, which will enhance the access, affordability, and coverage of mental health services. The mental health insurance will facilitate medical care for mentally ill and improve their outcomes, benefitting the society in the long-term. With these recent developments in India, things appear to be set to change in the context of mental health insurance, which is a welcome step, awaiting an early implementation.


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