Less than 1% of health claims in India pertains to mental health, reveals Marsh McLennan Report

Indian employees are silently battling a mental health crisis, with limited access to affordable treatment due to gaps in insurance coverage. Long working hours, rising workplace stress, and economic uncertainties have made mental well-being a growing concern. Despite IRDAI’s 2018 mandate to treat mental health on par with physical health, most insurance policies exclude outpatient therapy, rehabilitation, and addiction treatments, leaving employees to bear high out-of-pocket costs. Without comprehensive insurance support, many are forced to delay or forgo treatment, impacting productivity, business performance, and overall economic growth

Marsh McLennan- the world’s leading professional services firm in the areas of risk, strategy and people, released the latest “RiseUP for a Better Tomorrow” Mental Health Report 2025 in collaboration with Mpower at the Mpowering Minds Summit 2025. The report highlights the critical gaps in India’s mental health insurance landscape and the urgent need for policy interventions. The report examines insurance coverage trends, corporate challenges, and consumer experiences, offering a roadmap for inclusive mental health insurance in India.

Key Findings for India

• Low Claims Utilization: Less than 1% of total health insurance claims in India are for mental health treatment, despite the IRDAI’s 2018 mandate for parity with physical health
• Coverage Gaps: 83% of organizations report minimal claims utilization, while 42% of individuals are either unaware of their mental health coverage or don’t have it
• Limited Outpatient Care: Only 17% of insured individuals have access to outpatient therapy/counselling, which is crucial for mental health treatment
• High Out-of-Pocket Expenses: 49% of individuals cite high treatment costs as the top challenge in accessing mental healthcare
• Stigma & Access Barriers: 48% of employees fear discrimination, while 21% struggle to find in-network providers
• Regulatory Gaps: Addiction treatments and rehabilitation centers are largely excluded from insurance policies, creating further barriers to care

Commenting on the report, Sanjay Kedia, CEO, Marsh McLennan India states that, “The Parliament enacted landmark Mental Healthcare Act, 2017 further supported by IRADI, mandates every insurer to cover mental health treatment. Despite legislative support and less than 1% of claims being for mental health, it’s clear that Insurance industry has failed to provide mental health coverage. This report makes specific recommendations to improve mental health coverage like establishing a robust network of mental health providers, including rehabilitation and de-addiction centres in hospital networks, outpatient mental health treatments and removing exclusions for self-inflicted injuries, suicide attempts, and substance use disorders.”

Mrs. Neerja Birla, Founder & Chairperson of the Aditya Birla Education Trust (ABET), stressed the urgency of insurance reforms said, “Our healthcare and insurance systems must reflect a commitment to mental health by ensuring mental health coverage is as accessible and affordable as physical health benefits.  Mental health issues left untreated lead to decreased productivity, rising absenteeism, and long-term economic losses. Insurers, employers, and policymakers must collaborate to ensure mental health coverage is not just included but prioritized, with equal access to therapy, rehabilitation, and long-term care. The BFSI sector has a crucial role in bridging this gap. By integrating comprehensive mental health coverage, we can build a healthier, more resilient workforce and, ultimately, a stronger Indian economy by 2047.”

The report urges insurers, employers, and policymakers to take decisive action in expanding mental health coverage. This includes integrating outpatient mental healthcare—such as therapy, teleconsultations, and rehabilitation—into core insurance policies.

Additionally, the removal of exclusions for substance use disorders and self-harm-related treatment is essential to ensure comprehensive care. Insurance companies should establish and maintain a robust network of mental health providers, including psychiatrists, psychologists, therapists, and counsellors. This network should be easily accessible to policyholders, ensuring timely and convenient access to mental health services. Finally, public awareness campaigns must be launched to combat stigma and educate individuals on the benefits of mental health insurance, fostering a more inclusive and supportive healthcare ecosystem.