Mental Health Insurance in India: Low Claims, Policy Gaps
Why in the news
Mental health claims remain tiny in India even though the law requires insurers to cover mental illness. A 2025 report and a journal analysis show gaps in awareness and policy wording.
Key facts
- Claims share: under 1% of all health claims.
- IRDAI requires cover for mental illness under the Mental Healthcare Act (MHCA), 2017; Section 21(4) mandates parity with physical illness.
- Mental Health Report 2025, by Marsh McLennan India and Mpower (Aditya Birla Education Trust): 42% unaware of cover or without it.
- Exclusions seen: addiction and rehab, attempted suicide, some physical claims if psychiatric drugs are used.
- Psychiatrist Dr Harish Shetty: poor awareness hinders approvals; a heart attack claim was rejected over psychiatric medication.
Indian Journal of Medical Ethics analysis (Nov 2024)
| Finding (268 policies, 2020-21) | Policies |
|---|---|
| Explicitly excluded mental illness (2 providers) | 6 |
| Excluded attempted suicide or self-injury | 224 |
| Denied injuries from alcohol or substance use | 267 |
| Included outpatient mental health services | 23 |
Way forward
- Raise policyholder awareness.
- Enforce MHCA strictly to stop wrongful exclusions.
- Widen cover to outpatient care, addiction treatment and crisis intervention.
Exam angle
- Law: Mental Healthcare Act, 2017, Section 21(4).
- Regulator: IRDAI.