Ahmedabad: Health insurers have often relied on exclusion clauses to deny claims related to mental health treatment. But a consumer commission has ruled that such exclusions are “arbitrary and illegal”, and cannot override the law. In a case involving treatment for psychosis, the commission held that insurers are required to cover mental illnesses just as they cover physical ailments. It subsequently ordered reimbursement of the hospital bill with interest.The order came in a case filed by a Vastrapur resident whose claim for treatment of psychosis was denied despite having a health insurance cover of Rs 3 lakh with the National Insurance Company Ltd.The complainant was admitted to a private hospital for four days in Oct 2022 for treatment of psychosis. He spent Rs 44,409 on hospitalisation and subsequently sought reimbursement under his mediclaim policy. However, the insurer rejected the claim, citing Clause 3.1.4 of the policy, which excluded hospitalisation expenses related to mental illness.Aggrieved by the rejection, the policyholder approached the District Consumer Disputes Redressal Commission (Additional), Ahmedabad, alleging deficiency in service and unfair trade practice. The insurance company defended its decision, contending that the claim was not payable under the terms and conditions of the policy.After hearing both sides, the commission rejected the insurer’s arguments and referred to the Mental Healthcare Act, 2017, as well as directions issued by the Insurance Regulatory and Development Authority of India (IRDAI) in Aug 2018 that say, “every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness”.The commission observed that the insurance company failed to explain why the statutory provisions and IRDAI directives would not apply in the present case. It said, “Therefore, due to lack of such cogent and adverse evidence on record, the commission declines to agree with the facts of the repudiation. So, the commission is of the view that the insurance company has miserably failed to prove the facts of the repudiation and therefore, the repudiation by applying the terms and conditions of clause ie hospitalisation for mental illness cover of the policy can be termed arbitrary, illegal and invalid.”The commission ordered the insurer to pay the claim with 7% interest along with Rs 4,000 compensation for physical harassment and towards the cost of litigation.
