India’s new Mental Healthcare Act: What does it mean for the insurers?

Mental health is a major concern worldwide with approximately 14% of the global burden of disease attributable to neuropsychiatric disorders. In India, mental healthcare faces challenges in terms of existing public health priorities and their influence on funding, shortage of mental health services facilities and resources, poor utilisation of available services by patients and caretakers and issues with the recovery and reintegration processes of those who are mentally ill.

The Mental Healthcare Act, 2017 (Act) was passed in India in April 2017 and put into effect in July 2018. It grants a legally binding right to mental healthcare to all citizens of India and is intended to set a foundation for delivering high-quality healthcare and protecting the rights of individuals receiving such care.

The Act aims to bring a number of changes in the healthcare sector through provisions that place greater emphasis on the type of care, treatment, and welfare of those suffering from mental illness. Additionally, the Act places an obligation on insurance companies to provide health insurance for mental illness on the same basis as other physical illness.

In this paper, Milliman’s Joanne Buckle, Neha Taneja, Rachin Aggarwal and Vidhi Gupta look at the key provisions of the Act, mental illness prevalence, supply-side indicators and the current treatment gap. They also discuss the results of an industry survey they carried out to understand the impact of the Act on the Indian health insurance market and the mental health landscape in select international markets to arrive at key learnings for the Indian market.

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