Less than 1% of health claims in India are for mental health, report reveals

Less than 1% of health claims in India are for mental health, report reveals

Indian employees are grappling with a growing mental health crisis, yet fewer than 1% of health insurance claims in the country pertain to mental health, according to a new report by one of the world’s leading professional services firm Marsh McLennan.

Despite a 2018 mandate by the Insurance Regulatory and Development Authority of India (IRDAI) requiring insurers to cover mental health treatments on par with physical health, gaps in coverage persist. Many policies exclude outpatient therapy, rehabilitation, and addiction treatment, leaving individuals with significant out-of-pocket costs, the report highlighted.

The findings, released in Marsh McLennan’s "RiseUP for a Better Tomorrow" Mental Health Report 2025 in collaboration with Mpower, highlight key challenges in mental health insurance:

The report found massive coverage gap - as 83% of organizations report minimal claims utilization, while 42% of individuals are unaware of or lack mental health coverage. Only 17% of insured individuals have access to therapy or counseling. Nearly half cite affordability as a major barrier. Around 48% said they fear discrimination, and 21% struggle to find in-network mental health providers. Addiction treatments and rehabilitation centers are largely excluded from insurance policies, creating further barriers to care.

“The insurance industry has failed to provide adequate mental health coverage despite legislative support,” said Sanjay Kedia, CEO of Marsh McLennan India. “We need to establish a strong network of mental health providers, integrate outpatient treatments, and remove exclusions for conditions like substance use disorders and self-harm-related treatments.”

The Parliament enacted landmark Mental Healthcare Act, 2017 further supported by IRADI, mandates every insurer to cover mental health treatment.

Neerja Birla, founder of the Aditya Birla Education Trust, emphasized the urgency of insurance reforms, stating that mental health must be as accessible and affordable as physical health benefits.

“Our healthcare and insurance systems must prioritize mental health,” Birla said. “Untreated mental health issues contribute to declining productivity, absenteeism, and long-term economic losses.”

The report calls for comprehensive policy changes, including expanding coverage for therapy, teleconsultations, and rehabilitation services. It also urges insurers to remove exclusions for substance use disorders and self-harm while increasing public awareness to reduce stigma.

Experts say integrating robust mental health coverage into insurance plans will help build a healthier workforce and contribute to a stronger Indian economy by 2047.