A woman considering her notes at a kitchen table.

Cost and cover

Does health insurance cover therapy and psychiatry in India?

In short

The short answer

The law says mental illness has to be covered on the same basis as physical illness. What your own policy pays for is a narrower question. This page sets out what the law and the insurance regulator say, and what to ask your insurer.

Yes, the law is on your side. Indian law requires insurers to provide for mental illness on the same basis as physical illness. That is Section 21(4) of the Mental Healthcare Act, 2017, in one sentence.

  • The regulator enforces it: IRDAI directed all insurance companies to comply on 16 August 2018. Its Master Circular of 29 May 2024 requires every general and health insurer to offer a specific cover for people with mental illness.
  • What your own policy pays is a narrower question. The rules treat a hospital admission and an outpatient (OPD) session as different situations, so a policy that pays for an admission may not pay for weekly outpatient sessions. Your insurer is the one who can tell you which cover you hold.
A couple at a small table looking over papers together, two cups of tea between them.

The statute

What the law says

The Mental Healthcare Act, 2017 governs mental healthcare in India. IRDAI's own 2018 circular records that the Act came into force on 29 May 2018.

“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.”

Mental Healthcare Act, 2017, Section 21(4)

Where it sits

Section 21 is headed “Right to equality and non-discrimination”. Subsection (4) places a duty on insurers. It does not, on its own, tell you what is inside the policy you bought.

The Act defines its terms

It carries a definition of mental illness with a threshold, so whether a particular condition falls inside Section 21(4) is a clinical and legal question rather than a settled one.

The courts have applied it

The Delhi High Court held in 2021 that insurance policies cannot discriminate between mental and physical illness, and struck down a policy exclusion for psychiatric conditions (Shikha Nischal v. National Insurance Company Ltd.).

The regulator

What the insurance regulator has told insurers

IRDAI is the Insurance Regulatory and Development Authority of India. Three of its documents matter most here, and all three sit on the IRDAI website.

16 August 2018

Circular IRDA/HLT/MISC/CIR/128/08/2018 quotes Section 21(4), then states: “All insurance companies are hereby directed to comply with the aforesaid provisions of the Mental Healthcare Act, 2017 with immediate effect.”

18 October 2022

A further circular reiterated that “all insurance products shall cover mental illness and comply with the provisions of the MHC Act, 2017 without any deviation”. Insurers were asked to confirm compliance before 31 October 2022.

Now superseded

That 2022 circular has since been superseded by the 2024 Master Circular, which carries the same requirement forward.

29 May 2024

The Master Circular on Health Insurance Business is the current instruction. It says all general and health insurers “shall offer a specific cover for Persons with Disabilities (PWD), persons affected with HIV/AIDS, and those with mental illness”.

This is what insurers have to offer. It is not a description of what any one policy contains.

In practice

What this means in practice

Insurance rules divide care by the situation you are treated in. That is where most of the confusion about therapy sits.

If someone is admitted

An admission for mental illness is claimed on the same basis as any other admission, subject to the same policy limits.

Cashless, on the way in

Where the policy allows cashless treatment, the 2024 Master Circular sets the clock on the insurer: “Insurer shall decide on the request for cashless authorization immediately but not more than one hour of receipt of request.”

Cashless, on the way out

The same circular says the “Insurer shall grant final authorization within three hours of the receipt of discharge authorization request from the hospital.”

If you are attending sessions

A clinic consultation or a therapy session is not an admission. The Master Circular requires insurers to make products, add-ons or riders available for “every situation of treatment including domiciliary hospitalization, outpatient treatment (OPD), Day Care and Homecare treatment”.

The caveat in the same line

It then adds a note: “The above does not imply that the Insurer shall have one product to cater to all of the above”. So whether your sessions can be claimed depends on whether your policy carries an outpatient (OPD) benefit.

What a website cannot tell you

No page can read your policy. The wording you hold, and your insurer's answer, decide the claim. The Master Circular puts the decision on a cashless request with the insurer, not with the hospital or the clinic.

Six questions

Questions to ask your insurer

Call the number on your policy, or write to your insurer. These six questions get you an answer you can act on.

  • Is mental illness covered on the same basis as physical illness under my policy?
  • Does my policy have an outpatient (OPD) benefit?
  • Are psychiatry consultations and sessions claimable under that benefit?
  • Do I need pre-authorisation before a consultation, a session, or an admission?
  • Are there waiting periods or exclusions I should know about?
  • What papers do you need from the clinic for a claim, and in what format?

Ask for the answer in writing, and keep it with your policy document.

Government schemes

If you are covered by a government scheme

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, usually written AB PM-JAY, is the central government health scheme. Mental illness sits inside its package list.

What the package covers

A Government of India press release dated 25 March 2025 states that the scheme's Health Benefit Package “provides cashless healthcare services related to 1961 procedures across 27 medical specialties including 22 procedures under Mental Disorder Speciality”.

Where it is used

The package is used at hospitals empanelled with the scheme, for admitted or day-care treatment. It is not an outpatient benefit, so clinic consultations and sessions sit outside it.

Who decides

Who is eligible, and which hospital the package can be used at, are decided by the scheme. Check with the scheme, or with the hospital you are considering.

At this clinic

What Weave does

Fees are published

Fees are published openly, so the figure is known before anything is booked. The full list is on the fees page.

Paperwork on request

Weave issues dated receipts and prescriptions on request, which is what an insurer usually asks a patient to produce.

Sources

Where these facts come from

Every claim about the law and the regulator on this page comes from one of these documents. All of them are public, and all of them are linked so you can read them yourself.

This page explains the law and the regulator's instructions in plain language. It is not legal advice and it is not advice about which policy to buy.

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