The health insurance segment is dynamic as it keeps undergoing changes as recommended by the Insurance Regulatory and Development Authority of India (IRDAI). Continuing this tradition of changes, IRDAI recently announced that all health insurance plans would include coverage for mental health care in their scope of coverage and treat mental illnesses along the lines of physical illnesses. The IRDAI circular which notified this change stated that insurance companies should make changes in their existing health insurance plans to allow coverage for mental illnesses as stated in the rules specified in the Mental Healthcare Act, 2017.
This move by the IRDAI is seen as a positive step by many because, according to a finding of the National Mental Health Survey of India conducted in 2016 by the National Institute of Mental Health and Neuro Sciences, at least 15% of Indians suffer from some kind of mental illness and require mental health care. However, mental illnesses are viewed as a social stigma and specifically excluded from the coverage of health insurance plans. As a result, individuals do not seek good mental health care.
IRDAI, however, has woken up to this fact and is now instructing insurers to include coverage for mental illness. Though companies are still in the process of accommodating the changes, the possible coverage benefits expected include–
- Inpatient hospitalization expenses resulting from mental illnesses
- OPD coverage for psychiatric consultations, medicine costs, diagnostic tests, etc.
What challenges do insurers face?
- Restructuring of existing insurance plans
Since mental health care is required to be included in all health plans, insurers would have the tough task of restructuring their insurance policies for including this benefit. They need to figure out the exact coverage which they would allow and also the exclusions. Also, the eligibility parameters would have to be defined to understand whether individuals with existing mental issues would be allowed coverage for mental health care or not.
- The inclusion of OPD expenses
In many health plans, coverage for OPD expenses is not available. Only a few plans allow OPD benefits. Since mental health care incurs a higher OPD expense, inclusion of OPD benefits for mental illnesses would be a challenging task since the claim probability of insurance companies would increase.
- Underwriting hurdles
Insurance companies would have major underwriting issues as there would be a lot of potential applicants suffering from mental illnesses. Though the higher number of applicants would mean more premium inflow, allowing coverage for such high-risk individuals might hamper the profitability of the company.
What is the benefit to customers?
Customers would be benefited from the changes as they would get–
- A wider scope of coverage in their health insurance plans. The plan would, therefore, become more inclusive
- Access to better mental health care facilities since the underlying costs would be taken care of by their health insurance plan
However, the premium outgo would be higher because of the increased scope of the plan. As the insurance company would allow coverage for risky mental health disorders, the premium rate would also be increased.
What’s in it for you?
As agents, even you would be benefited from the changes in health insurance plans’ coverage features. You would benefit from-
- A better sales pitch
You would be able to pitch health insurance plans to your clients in a better way because you can boast of the increased coverage features for mental health care.
- Increase in the number of potential clients
Your client base would also increase as you can approach individuals with mental illnesses and sell them a health plan to cover their ailment. Even individuals having a family member with a mental sickness would be motivated to buy a health plan from you.
- Increase in revenue
As your pitch improves and you get more clients, you would be selling more policies. Selling more policies means earning more revenue.
While there are some challenges for the insurance company to incorporate the changes directed by the IRDAI, you and your clients can rest assured that health plans would change for the better. The coverage scope would increase and though the premium would be a little higher, mental patients can enjoy a health cover which never existed for them before.