Medical Insurance For Mental Treatment: Legal Angle

The whole world is developing a slew of measures to cope up with COVID-19, India is not left untouched with the increasing number of cases day by day with rising death tolls.

India as a country has encouraged mass production of PPE kits to achieve self-reliance with the imposition of stricter lockdown regulations in the affected areas. In these trying times, the Supreme Court in a remarkable judgement has issued notice to Centre and Insurance Regulatory Development Authority of India (IRDAI) for directing insurers to provide medical insurance for treatment of mentally ill patients.

IRDAI’s dereliction of its duties with violation of Section 24(1) of Mental Healthcare Act, 2017 raises serious questions which are left unanswered. Through this paper, the author intends to provide legal insights upon the SC order with its rationale and pressing need in the prevalent current scenario.

Significance Of This Development

people are left stranded with no family support in these pressing COVID-19 times, they become more prone to depression and anxiety issues. In our conventional society, mental illness is often portrayed as a taboo or form of seclusion from societal relations. People suffering from mental health problems are regarded as neglected part of society which are left to suffer on their own without any helping hands. Without any recourse, medical health insurance proves as a lasting resort for them to cope up with rising medical expenditures.

This proves a progressive step towards considering mental illness at par with the physical illness which will further help in providing better mental health care facilities. India’s health care spending stands of 3.6% of total GDP expenditures, the lowest in comparison to other developing countries. With out of the pocket health expenses, people are not being provided with basic health facilities. This move is aimed at widening the scope of facilitating insurance coverage to needy mentally ill patients.

In these trying times of health emergencies, health insurance acts as boon for people suffering from different diseases. According to the National Mental Health Survey, mental illness cases proportionately increase with less income, low education and limited employment which form the part of widespread ramifications of COVID-19 crisis. This move will help in properly temporary relief to mentally ill people who are left stranded without any help. But despite the enactment of relevant statutory provisions, IRDAI has failed to provide directives to different insuring authorities to include mental illness as part of physical illness for a mental health insurance claim.

The cold attitude of IRDAI towards taking legal action against unregulated insurers raised serious objections about the transparency of it. This move will further help in providing insurance cover to mentally ill patients along with the imposition of action against different authorities for non-compliance of the same.

Legal Nuances

According to Section 21(4) of the Mental Health Care Act, all insurers are mandated to provide medical insurance for treatment of mental illness on a similar basis for treating physical illness. This provision was included as a result of ratification of United Nations Convention on Rights of Persons with Disabilities (UNCRPD), Article 25 of UNCRPD deals with health and its sub-clause (e) provides for prohibition of discrimination in relation to Health insurance against Persons with Disabilities[4].

In the recent case, the petitioner has also filed an RTI application for disseminating information of insurers who conceded to order passed by IRDAI in 2018. But in response, despite the inclusion of Section 21(4) in the Act, its implementation remains a stricter challenge as none of the insurance companies have adhered to the same.

This biased behaviour also violates the fundamental right of equality under Article 14 of the Indian constitution as mentally ill patients are disproportionately affected as the existing laws prove to be ineffective. This violation discriminates mentally ill patients as a lack of appropriate health insurance cover only increases their risks.

Critical Analysis

The IRDAI was established as a central authority to regulate the structure of the evolving insurance industry of India. But due to it the prevalent red-tapism, it has been bypassing its responsibilities for stricter implementation of Section 21(4) of MHCA, 2017. IRDAI had also issued an order in 2018 complying all insurance companies to cover mental illness under the purview of Health insurance but without continual follow up, it failed to achieve the desired purpose.

The reluctance in taking stern action against insurance companies and its casual stance for the inclusion of mental illness under the Health insurance scheme poses serious doubts upon its unaccountable behaviour. Transparency helps in enhancing the credibility of any institution but its inaction on the errant behaviour of different insurance companies provides an ideal example of iniquitousness in its functioning.

The Supreme Court has also been continuously monitoring the rehabilitation issues of thousands of people who are languishing in different hospitals despite they are fit for discharge. According to SC, rehabilitation has a wider scope and includes physical, medical, occupational and psychological services necessary for basic existence. But the irresponsible behaviour of IRDAI has excluded a multitude of people from taking benefits of health insurance scheme.


In these pressing times, the significance of medical treatment for mental illness become paramount for achieving better health care facilities. It is high time that IRDAI and Health Ministry should provide an extensive report regarding the compliance of Section 24(1) by different insurance companies for achieving transparency. With recent advancements, it is the hour that society should revamp its ideals to change the notion of mentally ill patients from neglected to being accepted by every section of society.


Dhananjay Mohapatra, Why is mental illness not covered under the medical insurance, asks SC, The Times of India, June 17, 2020
Pooja Mehra Indian economy needs a bigger dose of health spending, Live Mint, April 8th, 2020.
Gururaj G, Varghese M, Benegal V, Rao GN, Pathak K, Singh LK, et al. Bengaluru: National Institute of Mental Health and Neurosciences Publication; 2016. National Mental Health Survey of India, 2015-16
Samanwaya Rautray SC wants mental illness to be covered by insurance companies as provided in law The Economic Times. June 16th, 2020.

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