चित्ते प्रसन्ने भुवनं प्रसन्नं चित्ते विषण्णे भुवनं विषण्णम् ।
अतोऽभिलाषो यदि ते सुखे स्यात् चित्तप्रसादे प्रथमं यतस्व॥
(Meaning: When your mind is happy, world seems to be happy; when your mind is depressed, entire world seems to be depressed, hence if you desire to be happy you first pay attention to your mental health.)
In the matter of Shikha Nischal v. NICL1 , Hon'ble Justice Prathiba Singh of Delhi High Court vide an order dated April 19, 2021 held that mental illnesses ought to be covered without any discrimination by the health insurance policies.
The matter revolves around three entities viz. the petitioner, the Respondent No.1- M/s National Insurance Company Limited (hereinafter, "NICL") and the Respondent No. 2-Insurance Regulatory and Development Authority of India (hereinafter, "IRDAI").
According to the Guidelines on Product Filing in Health Insurance Business2 (hereinafter, "2016 Guidelines") issued by the IRDAI, when an insurance company gets an approval for a new product from the IRDAI, it has to launch the product commercially within 6 months from the date of approval. The IRDAI approved NICL's product covering mental illness in March 2020 and in accordance with the above mentioned 2016 Guidelines, the NICL launched its new product on July 01, 2020 (hereinafter "New Policy") which was covering mental illness. Petitioner has purchased National Mediclaim Policy (hereinafter "Healthcare Policy") from NICL on May 29, 2020 which was valid for 1 year i.e. till May 28, 2021 with the insured sum of Rs. 3,95,000/-. In June 2020, the Petitioner was diagnosed with Schizoaffective Disorder – a mental illness, undergone hospitalization for a month, with the treatment expense of Rs. 5,54,636/-, for which she applied to the NICL for reimbursement. On September 01, 2020 the NICL rejected Petitioner's claim relying on the clause 4.10 (hereinafter, "Exclusion Clause") in the Healthcare Policy purchased by the petitioner, which was absolving the NICL from the liability of payment under the Healthcare Policy with respect to a psychiatric disorder (i.e. mental illness). Aggrieved by this, the petitioner filed a complaint before the Insurance Ombudsman relying upon the provisions of Mental Healthcare Act, 2017 (hereinafter, "MHA, 2017") which came into effect from May 29, 2018)3 , where the Petitioner's claim was again rejected on the basis of Exclusion Clause in the Healthcare Policy.
Before going into the judgment it is necessary to understand the pertinent legal provisions in this matter. United Nations Convention on the Rights of Persons with Disabilities4 (hereinafter "Convention") which has been ratified by India on October 01, 2007, considers the mental disability as a form of disability and enshrines the principle of Equality and Non-discrimination on all grounds with respect to such disabilities. Article 25 of the Convention specifically talks about the health of persons having disabilities and mentions the appropriate measures that state parties shall take to maintain the standards of health with no discrimination on the basis of any kind of disability. Moreover, Clause (e) of the Article 25 of the convention categorically states the principle of non-discrimination in the health insurance of persons with disabilities. These provisions of international law emanated from the Convention have been manifested in the form of Section 21(4) of MHA, 2017 that talks about right to equality and non-discrimination of a person suffering from a mental illness and makes it clear that 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. Thus, providing coverage for mental illness in a health insurance policy is legal responsibility of every insurer.
The IRDAI has duty to 'control' and 'regulate' the terms and conditions of insurance policies as well as to protect the interests of policy holders. It is important to note that the IRDAI has also issued a circular dated August 16, 2018 to all the insurers directing them to comply with the provisions of MHA, 2017, by drawing their attention towards Section 21(4) of the MHA, 2017.
The court had taken into consideration all the facts and relevant legal provisions and found that coverage of mental illness in a health insurance policy is an undisputed fact by both the respondents; but the NICL was arguing on the basis of the time frame of 6 months given in 2016 Guidelines, regarding the launch of the New Policy which was explicitly covering mental illness. The petitioner had not purchased the New Policy but the Healthcare Policy which had Exclusion Clause making an exception to the coverage of psychiatric disorder and that's the reason, the NICL had rejected the petitioner's claim with respect to the schizoaffective disorder that the petitioner had diagnosed with.
The court found that the provisions of MHA, 2017 were germane for a person who was suffering from Schizoaffective Disorder and the NICL had not given effect to those till July 2020.The court did not find NICL's interpretation of the 2016 Guidelines acceptable as it was not in accordance with the MHA, 2017. In the light of the fact that the MHA, 2017 was in force since May 2018, the involvement of the Exclusion Clause in the Healthcare Policy of NICL issued in 2020 was found to be contradictory to the existing law. Thereby, the policies issued by the NICL in the two years from May 2018, were violative of the provisions of MHA, 2017.
The court further clarified that although mental illnesses may not have the physical manifestations they can be equally devastating like a physical illness. The court also made a reference to the severe psychological issues that have emerged from several harsh consequences of current pandemic including lock-downs, loss of employment, issues related to work from home etc. and emphasized the importance and the necessity of health insurance with respect to mental disorders.
The court also highlighted the supervisory duty of IRDAI to check whether the concerned insurance company has implemented the laws made by the legislature and mentioned that IRDAI has been delinquent in the performance of its duty.
Finally, the court held that the petitioner's claim was reimbursable as she was entitled to it and also directed NICL to pay Rs.25,000/- as the litigation costs to the Petitioner within a period of four weeks. Further, the court also directed IRDAI to circulate the copy of its order to all insurance companies to ensure the future compliance of their respective policies with MHA, 2017.
Footnotes
1 Shikha Nischal v. National Insurance Company Limited & Anr. W.P.(C) 3190/2021
2 Guidelines on Product Filing in Health Insurance Business
3 The Mental Healthcare Act, 2017
4 Convention on the Rights of Persons with Disabilities
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