What is the Mental Healthcare Act, and How Does it Affect Health Insurance?

The Mental Healthcare Act of 2017 is an Indian law passed to protect the rights of a person to treatment for mental conditions or illnesses. After the passage of this law, the Insurance Regulatory and Development Authority of India (IRDAI) ensures that, under Section 21(4) of this act, every insurance provider across India must make provisions for medical insurance.

This is to cover treatment expenses for mental illnesses on the same basis as an individual gets coverage for physical illnesses. If you want to explore how this law affects the health insurance landscape in India, read this article.

What is the Mental Healthcare Act in India?

The Mental Healthcare Act (MHCA) 2017 in India is aimed at upholding the patient's dignity, autonomy, rights and choices while receiving medical treatment to maintain their mental health. However, before this and for a longer term, health insurance plans across India predominantly focused on physical healthcare coverages and did not cover mental illnesses.

Since May 29, 2018, the IRDAI has mandated that all insurance companies cover treatment costs for mental wellness. Thus, when an individual buys health insurance from an insurer, they get access to therapy, counselling, psychiatric care, inpatient hospitalisation, medications, etc.

What Does Mental Health Insurance Cover?

Typically, health insurers in India cover medical expenses if an insured individual requires hospitalisation for inpatient treatment due to mental illnesses. Similar to health insurance for physical illness, such insurance covers expenses for diagnostics, treatment, medicines, ambulance charges, etc. However, an individual must stay hospitalised for 24 hours.

However, depending on the insurance provider, the amount of coverage for these expenses varies. Also, a health insurer may implement sub-limits on such coverages.

You must also note which types of illnesses require hospitalisation and which health insurers provide coverage for them:

• Psychiatric disorders

• Neurological disorders

• Visual or hearing impairments

What are the Typical Exclusion Criteria for Mental Health Coverage?

Typically, health insurers in India cover medical expenses if an insured individual requires hospitalisation for inpatient treatment due to mental illnesses. Such insurance covers expenses for diagnostics, treatment, medicines, ambulance charges, etc., provided that the individual stays hospitalised for 24 hours.

Furthermore, an insurer may decline coverage for mental illness that occurred to an individual due to substance abuse. These typically involve mental issues occurring due to overintake of alcohol and other harmful substances that may lead to a denial.

What is the Waiting Period for a Mental Health Cover?

Similar to insurance for physical healthcare, mental wellness coverage also includes a waiting period. It typically applies to any Pre-Existing Disorder (PED) in an individual. Therefore, an individual seeking mental health coverage for themselves or a family member must note this waiting period, as it may vary among health insurance providers.

Final Word

The Mental Health Care Act in India is a stepping stone toward reshaping insurance coverage by insurers. As per IRDAI guidelines, health insurers must provide coverage for mental illness on par with coverage for physical illness.