Mental health must be part of mainstream healthcare

Mental health remains one of the most neglected areas of Indian healthcare. Psychiatry and psychology are still too often treated as peripheral departments in hospitals and clinics.  The neglect is not because the need is small; it is because stigma continues to shape how society, institutions and even insurance systems view mental illness.

Just as the heart, liver, kidneys or lungs can malfunction, the brain and mind too can suffer from illness, imbalance, trauma, stress and dysfunction. Depression is not weakness. Anxiety is not drama. Mental illness is a medical and human reality, and it deserves the same dignity, urgency and financial protection as physical illness.

India’s mental health burden is substantial. The India State-Level Disease Burden Initiative estimated that around 197.3 million Indians were living with mental disorders, including approximately 45.7 million with depressive disorders and 44.9 million with anxiety disorders. The National Mental Health Survey 2015-16 found that the current prevalence of mental morbidity among adults was 10.6%, and that nearly 15% of adults required active mental health intervention. The same survey reported a treatment gap ranging from 70 per cent to 92 per cent across different mental disorders.

The urgency is even greater when viewed against India’s demographic scale. A large part of India’s population is young, exposed to academic stress, workplace pressure, digital overload, financial uncertainty, relationship challenges and lifestyle disruption. Mental health is therefore not only a healthcare issue. It is also a question of family wellbeing, workplace productivity, educational performance and national resilience.

The legal position is clear. Section 21(4) of the Mental Healthcare Act, 2017 requires every insurer to make provision for medical insurance for the treatment of mental illness on the same basis as treatment for physical illness. In 2026, the Government of India also clarified in Parliament that policies covering OPD treatment for physical illness must cover mental illness on the same basis.

This principle of parity is important. Mental health coverage should not be a cosmetic clause in a policy document. It should not be a rider, top-up, add-on or symbolic inclusion. It should form part of the base structure of every health insurance policy. If a policy offers Rs 10 lakh of health cover, mental illness should be meaningfully covered within that framework, not pushed into restrictive sub-limits, unclear exclusions or delayed approvals.

India also has a larger insurance protection gap. In FY 2024-25, India’s overall insurance penetration stood at 3.7 per cent of GDP, with life insurance at 2.7 per cent and non-life insurance at only 1 per cent.

Health insurance has grown, but coverage is still uneven. IRDAI’s Annual Report 2024-25 records that general and health insurers covered 58 crore lives under 2.65 crore health insurance policies. In a country of nearly 146 crore people, this shows both progress and a large gap in meaningful individual protection.

The gap is especially relevant for mental healthcare because most treatment is outpatient-based. Mental healthcare is not primarily an admission-based specialty; it is a continuity-based specialty. A person with depression may need repeated psychiatric consultations, therapy sessions and medication review. A child with developmental concerns may need psychological assessment and early intervention.

A person with anxiety may need counselling and follow-up. Very little of this care is inpatient. Most of it takes place in OPD settings, clinics, counselling rooms, digital consultations and structured follow-up programmes.

Therefore, a policy that claims to cover mental illness but largely restricts coverage to hospitalisation is structurally inadequate. Mental health insurance must include psychiatric consultations, psychology sessions, counselling, psychotherapy, psychometric assessments, neuropsychological testing, digital follow-ups, rehabilitation support and clinically required diagnostics.

Daycare mental health services should also be included where relevant. Many interventions do not require overnight admission but may involve structured therapy programmes, supervised assessments, neuromodulation support or short-duration clinical procedures. Insurance frameworks must evolve beyond the old binary of OPD versus hospitalisation.

The private sector is central to this reform. If insurance networks are limited mainly to large hospitals, access will remain narrow. Private mental health clinics and centres must be able to empanel with TPAs, insurers and government schemes through a seamless, transparent and digital process. Empanelment should be based on clear eligibility standards, qualified professionals, ethical documentation, privacy safeguards and defined timelines.

Government schemes such as Ayushman Bharat, CGHS, DGHS and similar programmes should also recognise the role of private mental health providers. Mental healthcare must be integrated more meaningfully into such frameworks, including OPD-linked models where appropriate. Fair pricing and timely payments are equally important. Mental healthcare is manpower-intensive and cost-intensive.

A quality centre requires trained psychiatrists, clinical psychologists, counsellors, therapists, assessment tools, digital systems, privacy infrastructure, crisis protocols, continuous training and, in some cases, expensive technology such as neuromodulation or brain-mapping systems. Margins are often limited because the service depends heavily on professional time and clinical quality.

If reimbursement rates are unviable or payments are delayed for months, good providers will avoid empanelment. The private sector can complement the government sector only if it is treated as a genuine partner. Claims and bills should be processed through time-bound and transparent systems, with minimal administrative friction.  Moreover, mental health insurance must also reach beyond metros. Tier-2, tier-3 and rural India need access through tele-psychiatry, online counselling, digital follow-ups, community screening and empanelment of smaller qualified centres.

The writer is a financial expert with experience across healthcare, investments and business strategy; Views presented are personal.