mental health insurance therapy coverage
Mental illness treatment must be covered by health insurance on the same basis as treatment for physical illness. That does not mean every therapy session or mental-health expense will automatically be reimbursed. Payment depends on the policy type, treatment setting, applicable benefit, limits and conditions attached to the provider or service.
Section 21(4) of the Mental Healthcare Act, 2017 requires insurers to provide medical insurance for mental illness treatment on the same basis as physical illness treatment. IRDAI directed insurers to comply in August 2018 and reiterated the requirement in October 2022.
However, a hospitalisation policy may cover inpatient mental-health treatment without paying for ongoing outpatient psychotherapy. Some policies offer a limited number of counselling sessions through an app or the insurer’s network. That is different from reimbursing bills raised by a policyholder’s chosen therapist.
Policyholders should review the policy schedule, Customer Information Sheet and detailed wording for outpatient, psychotherapy, counselling and psychiatric benefits. The key questions are which service is covered, who can provide it and how much the policy will pay.
A claim may be restricted or refused because the policy covers hospitalisation only, a waiting period is incomplete, an allowance has been exhausted, the provider or service is ineligible, records are missing, a benefit limit applies or co-payment is required. Under IRDAI’s framework, the waiting period for disclosed pre-existing conditions is capped at 36 months of continuous cover, although a policy may specify a shorter period.
A policyholder can ask the insurer for a written explanation when a claim is rejected. The insurer’s grievance process can then be used, followed where appropriate by an approach to the Insurance Ombudsman. In July 2026, the government told Parliament that IRDAI collects data on overall claim repudiations but not the reasons for individual denials.
When a therapy session costs Rs 2,000 or more, weekly therapy can cost at least Rs 8,000 a month and more than Rs 1 lakh a year. Employer benefits, including employee assistance programmes, may offer counselling separately from group health insurance. The Government of India’s Tele-MANAS service provides free, round-the-clock tele-mental-health support at 14416 and 1-800-891-4416.
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