Arjun Kapoor and Sayali Mahashur, Research Fellow and Research Associate at the Center for Mental Health Law & Policy, Indian Law Society, Pune, India, discuss the Mental Healthcare Act 2017 and the cases before the Delhi High Court and its implications for insurance law. .
In India, before the adoption of the Mental Health Act 2017 (MHCA), health insurance for the treatment of mental illness was a distant dream. In the absence of statutory regulations, it was common for insurance companies to exclude mental illnesses from insurance cover by means of standardized exclusion clauses in health insurance contracts. MHCA enforcement has finally challenged this status quo by recognizing a statutory right to health insurance for mental illness treatment – a first in Indian health case law. The MHCA is a law enacted in accordance with India’s obligations under the UN Convention on the Rights of Persons with Disabilities (“CRPD”) – the international gold standard for protecting and fulfilling the rights of people with disabilities, including people with mental illness. Section 21 (4) of the law obliges all insurance companies to offer health insurance for the treatment of mental illnesses on the same basis as with physical illness. This means that insurance companies can no longer exclude the treatment of mental illnesses from insurance cover for physical illnesses.
While the law is now categorically clear about the obligation of insurance companies, the question remains whether they will literally implement the law. On 16the As of August 2018, the Indian Insurance Regulatory & Development Authority of India (‘IRDAI’) issued a circular (“Circular 2018”), which instructs all insurance companies to comply with Section 21 (4) “with immediate effect”. Despite this official circular, discriminatory practices by insurance companies continue unabated, exacerbated by the lack of adequate regulation by the IRDAI. In the recent past, individuals have turned to the courts to resolve their complaints. In the next section we examine one such case in which the Delhi High Court has passed a landmark judgment on the liability of insurance companies and the IRDAI.
Recently the Delhi Supreme Court has its evaluation Shikha Nischal v. National Insurance Company Limited & Others in a written application concerning a woman who has been denied health insurance for treatment of her mental illness. The petitioner had received from the National Insurance Company Limited (“NIC”) on 29the May 2020 for a sum insured of Rs. 3.95,000 valid for one year. A few days later, she was diagnosed with schizoaffective disorder and was admitted to hospital at a cost of Rs. 5.54.636. When she submitted her insurance application for reimbursement, NIC declined, citing an exclusion clause in the policy that said no coverage would be provided for “Psychiatric Disorder, Willful Self-inflicted Injury”. Annoyed, the petitioner filed a complaint with the insurance ombudsman on the grounds that NIC was in breach of Section 21 (4) of the MHCA. The Ombudsman issued an order against the petitioner and in favor of NIC stating that she was bound by the terms of the policy and its exclusion clause. She then filed a written petition with the Delhi High Court challenging NIC’s order and decision to deny her claim.
Ironically, during the trial, NIC did not deny the fact that Section 21 (4) of the MHCA requires that health insurance be provided for mental illness as well as physical illness. Instead, NIC’s claim was based on that of IRDAI Product archiving guidelines in the health insurance business (“Guidelines 2016”), which stipulate that the maximum period within which an IRDAI-approved new product can be brought to market is six months. Thereafter, the insurance company must obtain approval from the IRDAI again. It was NIC’s claim that the IRDAI launched its mental illness product on Jan.the March 2020 and the product was released within six months on March 1, 2020.st July 2020. Since the petitioner had renewed her Mediclaim Directive before the introduction of the new product, she was bound by its exclusion clauses. The Delhi High Court dismissed NIC’s allegation on the grounds that the 2016 guidelines could not be construed to postpone the implementation of the 2018 law. The guidelines had to be interpreted in the light of the MHCA, which was in effect at the time of the petitioner’s purchase, the Mediclaim Directive, and requested a reimbursement. Interestingly, shortly after submitting the written application, the IRDAI instructed NIC to pay the petitioner’s claim and to provide a status report on the pending claims, in which it wrote to NIC that the latter was violating Section 21 (4) of the MHCA have violated. In an indictment against the role of the IRDAI in the present case, the Delhi Supreme Court found that the IRDAI’s failure to monitor insurance companies was a violation of its legal obligation to do so monitor and ensure that Section 21 (4) has been implemented by all insurance companies.
Finally, the court found that NIC was failing to implement Section 21 (4) of the MHCA and was required to pay the petitioner’s claim. Since NIC had already completed the petitioner’s claim of Rs. 3.95,000 in accordance with instructions from the IRDAI, the court ordered NIC to pay the petitioner an additional Rs. 25,000 as legal costs for bringing her into litigation, to meet their demands. The Court also ruled that all insurance companies are required to implement Section 21 (4) of the MHCA with effect from the date of its entry into force, which means that all health insurance policies from that date must include mental illness regardless of any considerations.
Section 21 (4) MHCA is based on the Principle of parity Not only does this require the removal of exclusion clauses, it also goes into ensuring that there is no discrimination in the types of policies, coverage and terms of coverage that is given for both mental and physical illness. In other words, parity implies that mere inclusion of mental illness is not enough, it should be in the same way as ensured in the case of physical illnesses. Although insurance companies are removing standardized disclaimers, we find that some insurance policies offer different levels of coverage for mental illnesses such as longer waiting times or lower insurance sums. For example, the United Family Medicare Policy limits the amount of the mental illness claim to 25% of the sum insured up to an upper limit of Rs. 3,000,000. The Future Varishtha Bima Yojna has a waiting period of 48 months for mental health claims versus a waiting period of 12 months for pre-existing physical illnesses. In addition, guidelines are like Here also exclude “self-inflicted injuries” or “suicide attempt” from coverage, although Section 115 of the MHCA suggests that a person who has attempted suicide is under severe stress and therefore cannot be prosecuted under Section 309 of India’s 1860 Criminal Code. While these examples are representative of current practice among insurance companies, we also note that the Master circular on the standardization of health insurance products (2020) itself allows the exclusion of the treatment of “alcoholism, drug or substance abuse or any addiction and consequences thereof” from health insurance, although addiction and drug abuse are considered mental illness in the sense of the MHCA.
The Delhi Supreme Court is currently negotiating another petition related to Subhash Khandelwal v. Max Bupa Health Insurance Company Limited which is Lower court. In this case the petitioner has an insurance policy from Max Bupa for a sum insured of Rs. 35 lakh. The petitioner alleged that when he was making his mental illness claim, he was informed of a clause in the policy that limited the amount insured to INR 50,000 with certain additional conditions that were contrary to Section 21 (4) of the MHCA stood. In its first observations, the Court found that the contested policy excludes a large number of mental illnesses from being fully covered by the policy. The Court has determined that this matter needs to be considered as such policies have affected a large number of people and has notified the IRDA to document the basis for policy approval.
While awaiting the final outcome of this case, the Delhi High Court’s observations reiterate the crucial role of the IRDAI in ensuring that insurance companies adhere to the letter and spirit of Section 21 (4) of the MHCA. In this regard, the IRDAI must play an exemplary and proactive role in exercising its inherent powers to regulate the approval of insurance policies and hold insurance companies accountable for their statutory obligations, particularly when they violate the provisions of the MHCA. This is without prejudice to the fact that under Section 109 of the MHCA, insurance companies and their representatives are liable to prosecution and should be held accountable for a violation of § 21 (4) MHCA. For about 197.3 million Indians Living with mental illness, the statutory right to health insurance for treating mental illness has finally become a reality. It is now up to insurance companies to meet their legal obligations to ensure that everyone has access to affordable mental health care without discrimination, both in terms of the text and in accordance with the spirit of the law.
Arjun Kapoor is a lawyer and Research Fellow at the Center for Mental Health Law & Policy, Indian Law Society, Pune, India.
Sayali Mahashur is a research fellow at the Center for Mental Health Law & Policy, Indian Law Society, Pune, India.
Recommended quotes: Arjun Kapoor and Sayali Mahashur, Right to Health Insurance: Ensuring Parity for Mental Illness in India, JURIST expert commentary, June 19, 2021, https://www.jurist.org/commentary/2021/06/kapoor-mahashur-health-insurance-india/.
This article has been prepared for publication by Vishwajeet Deshmukh Multimedia Director and Assistant Editor, JURIST Legal News and Commentary. Please direct any questions or comments to them at commentary@jurist.org
The opinions expressed in the JURIST comment are the sole responsibility of the author and do not necessarily reflect the views of any of the editors, associates, donors, or the University of Pittsburgh of JURIST.
source https://dailyhealthynews.ca/right-to-health-insurance-ensuring-parity-for-mental-illness-in-india-jurist-commentary/
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