General Insurers, Health Insurers To Cover Mental Illness, HIV, and PwDs, Says Irdai

The Insurance Regulatory and Development Authority of India (Irdai) has made it mandatory for all non-life insurers to launch health insurance policies that can provide coverage to people with mental illness and or those afflicted with HIV, Aids, or disabilities.

The insurance regulator announced this in a recent circular a few days ago. The regulator has now asked insurance companies to come up with a model policy, setting out the minimum scope and parameters for product design. 

In other words, insurers may widen the scope of this product, but in no case can the scope of the product can be narrowed down. 

In the circular, Irdai has directed the insurers to put in place a board-approved underwriting policy to ensure that no proposal from the above-mentioned categories of the population is denied for reasons of the above-stated disabilities and/or illness/es. 

“The insurers may determine the price of the product subject to complying with the norms specified in the Irdai (Health Insurance) Regulations, 2016 (HIR, 2016) and guidelines/circulars notified there under,” the circular said.

The policy tenure of the product shall be for a period of one year and renewable in accordance with the regulatory framework already laid down. 

The standard product shall comply with all the provisions of Irdai (health insurance) regulations, 2016, all other applicable regulations, and other applicable guidelines/circulars as amended from time to time. Every general and standalone health insurer issued with a certificate of registration to transact general and/or health insurance business, shall mandatorily launch and offer their respective product immediately. It is reiterated that this circular shall come into force with immediate effect, the insurer said. 

According to the Mental Healthcare Act, 2017, every insurer will have to make provisions for medical insurance for the treatment of mental illness as they do for the treatment of physical illness. 

In October 2022, Irdai had directed insurance companies to ensure all health insurance policies cover mental illness. Insurers were asked to implement the new rule by October 31, 2022. 

Covid 19 has increased the focus on mental health issues owing to the increasing levels of stress and anxiety. While people are more open about such issues, they are also seeking medical treatment and therapy for the same. 

According to experts, insurers will now have to chart out a clear claim process specific to mental illness treatment. They will also have to ensure that there is ease of access, affordability, and availability for all mental illness treatments. Also, insurers will need to set up supporting infrastructure in terms of network hospitals, clinics, and psychiatrists, which would in turn help standardise the cost of treatment across a variety of mental illness ailments, their scope, and condition-specific pricing. 

Says Amjad Khan, director, employee benefits practice and international business, Anand Rathi Insurance Brokers: “We will soon witness many health conditions coming under the ambit of health policies which were earlier under exclusions or not in the specified list. In light of these announcements, the insurers are expected to tweak their coverages under their current health plans to accommodate a larger array of health conditions ensuring wider protection and a comprehensive plan is in place to meet the rising demand for health insurance in India.” 

Says Abhishek Poddar, CEO and co–founder, Plum: “The recent move by Irdai to mandate health covers for persons with disabilities, mental illness, or HIV is a significant step towards building a more inclusive society. This initiative has made it mandatory for non-life insurance companies to introduce health covers that cater to these individuals, providing a model policy setting out the minimum scope and parameters for product design.