As the demand for insurance companies to cover mental health conditions, insurance companies are explaining why they

cannot do so. Here is

why we need to continue pushing for mental health coverage.

Dr. Chua Sook Ning

TLDR: It cost more when people are not treated than when people are treated. I estimate it will cost RM 8.244 billion to treat depression with
medication alone. World Health Organization estimates that the economic benefits are 3 X that of the treatment cost = RM24 billion. There is
enough money to conduct a good risk assessment. There is enough knowledge to define what mental illness is, at least to come up with an
insurance plan.

1. “According to Allianz Life Insurance Malaysia Bhd’s CEO Joseph Gross said while mental illness is a serious global issue, any company that
runs a serious insurance business would not provide any coverage as there is a high chance for fraud to happen. It is undeniably a fundamental
issue globally, but generally, the insurance industry around the world has yet to quantify mental illness, its risk and how it should be priced,”

I am puzzled why insurance companies cannot come up with a risk assessment. Allianz had a net profit of RM 99.87 billion in the third quarter of
2018 alone. Surely a portion of that profit could go into coming up with a risk assessment for mental health conditions.

2. “Gross said over the years, the insurance industry has not been able to determine and specify what mental illness really is — and that has led to
the difficulties in financing it.”

But there is the Diagnostic and Statistical Manual of Mental Disorders, the taxonomic and diagnostic tool, now in its 5th edition, published by the
American Psychiatric Association. It was first published in 1952.

3. Is it true that other countries don’t offer mental health insurance?

Here is a list of insurance companies in the UK and USA that cover mental health conditions
4. It is true however that insurances globally are reluctant to cover mental health conditions. Despite the Parity Act in the USA which requires
equal coverage for mental health conditions as there are for physical conditions, “insurers are denying claims, limiting coverage, and finding other
ways to avoid complying with the law.“.

Insurance companies are concerned that they will lose money, not with fraudulent cases, but with genuine cases. Jim Minto, insurance industry
expert: “The biggest issue I would have is whether the market will be able to sustain continued provision of these types of covers and my point is,
if the claims rate continues at the current rate the prices will go up to levels where people cannot afford it and we won’t have cover”. It appears
that so many people need help, that the insurance companies simply cannot offer coverage without losing money.

5. Should insurance companies provide coverage for mental health conditions?

They are under no obligation to do so. It is legally their right to discriminate against people with mental health conditions in Malaysia and they
are a for-profit organization. If they had to pay for many claims, as Jim Minto said, they will lose money. And the fact is, there will be many
claims because 30% of Malaysians currently have a mental health condition and about 80 – 90% of people will have a mental health condition in
their lifetime.

Sadly, even the government’s new mySalam insurance plan does not cover any mental health conditions.

The fact is, insurance companies sell consumers a dream of health.Allianz says: “Dare to. We are with you. So the question is, what will you do
today? Start living the life you want. Allianz will be with you every step of the way. ”

AIA says: They will help you live Healthier, Longer, Better Lives.

It is a dream of health that comes at a cost – consumers have to pay for coverage. This is not charity.

If there is no coverage, the economy will suffer, let alone the cost of human life because people won’t get the treatment they deserve. Workplace
cost of depression alone is 1% of the GDP (Evans-Lacko & Knapp, 2016). This cost is incurred because people can’t work well when they are
depressed – they stop coming to work, or they are not productive at work.
If there is no coverage, health will suffer. One of the reasons why insurance companies discriminate against people who have a prior history of
mental illness is that it is a risk factor for other physical illnesses. For instance, depression is a risk factor for many physical illnesses. A recent
review said “More commonly studied were the connections between depression and cardiovascular disease, metabolic syndrome, biochemical
alterations, diabetes, dementia, cognitive impairment, Alzheimer’s disease, somatization and chronic pain, asthma, arthritis, and hyperlipidemia.
Less frequently studied conditions connected to depression were cancer, infections, allergies, autoimmune disease, gastric ulcer, rhinitis,
thyroiditis, bronchitis, migraines, fractures, and osteoporosis.” (Bica, Castello, Toussaint, & Monteso-Curto, 2017).

Given that 80- 90 % of people have a mental health condition, not treating their mental health will end up inflating the cost of their
physical health treatment.

6. Let’s work this out. How much will treatment cost? Assume that we only reserve treatment for those with a diagnosable mental
disorder.

We will look at depression, which has a prevalence rate of 10%.

For example, if you have a mild case of depression – according to the NICE guidelines (UK NHS), psychotherapy is the first line
treatment. If you have moderate to severe depression, you require both psychotherapy and medication.

But let’s take psychotherapy out of the equation first, given the lack of psychotherapists in the country and that the rates are more
variable.

Antidepressants take about 6 weeks to be effective. This is assuming that the first antidepressant you are prescribed work. You may
have to try several before you find one that works for you.

If you have mild to moderate depression, you are recommended to continue taking antidepressants for 6 months after recovery, to
prevent a relapse.

If you have a history of depression (more than one episode), you are recommended to take antidepressants for up to 2 years.
About 50% of people will have more than 1 episode of depression.

The usual adult dose of Fluoxetine is 20mg. According to the Malaysian Consumer Price Guide, the recommended cost is RM5.60
per 20mg or RM168 per month.

10% of 30 million (population of Malaysia) = 3 million people with clinical depression.

Of that 1.5 million will have recurrent depression (or at least 2 episodes of depression).

Assume that the other 1.5 million will have only a single episode of depression.

1.5 million Malaysians with depression taking Fluoxetine for 7 months at RM 168 per month and 1.5 million Malaysians with
recurrent depression taking Fluoxetine for 2 years at RM 168 per month.

This works out to be RM1.764 billion for medication treatment of mild depression and RM6.48 billion for medication treatment of
recurrent/moderate depression.

The total bill is RM8.244 billion (or RM2748/person).

In 2017 Malaysia’s GDP was RM1.353 trillion. Given that the business cost of depression is 1% of a country’s GDP, this equals to
RM13.53 billion.

This means even if we treat everyone with depression ONLY with medication, it will still cost less than not treating everyone with
depression. RM 5.286 billion less.
7. Many people are pointing to AIA Singapore for covering treatment of mental disorders. Specifically, they cover 5 mental disorders
–

1. Major Depressive Disorder (MDD)

2. Schizophrenia

3. Bipolar Disorder

4. Obsessive Compulsive Disorder (OCD)

5. Tourette Syndrome (up to age 21)

If you are diagnosed with depression, you will get 20% of your coverage amount. Let’s use $100,000 as the amount you are covered
for. Your monthly premium is $177.81.

You can get up to $20, 000. The claim however is capped at $50,000 per claim no matter how much you are covered for.

Let’s say you are diagnosed with depression in 2020. You get $20, 000. That’s your first episode of depression. The treatment works
and you feel better. Two years later however, you are depressed again in 2022. But AIA says that you can only have 1 claim per
illness, and that there is a waiting period of 3 years between each claim. Since you have already claimed for depression, that’s all
you get.

By the calculations in No. 6., insurance companies are not losing money. By ensuring that you are only treated once per illness, that
you have to wait between claims, and that you can only claim 20% of your coverage.

What are the consequences of this policy?

People will be less likely to seek help. Should one delay treatment until it’s bad enough because you are only allowed one shot?
This goes against everything the government is trying to do by encouraging us to seek help early without being ashamed. Even if we
are not ashamed to seek help, there is prejudice and discrimination once we do.

8. World Health Organization conservatively estimates that the economic benefits of treatment is 2 – 3 X more than the treatment
cost (Chisholm et al., 2016).

Let’s not put all the responsibility on the insurance companies though.

– Malaysia invests less than 1% of the health budget into mental health. We need more resources.

– We need less stigma. People are ashamed to seek help because they think that it’s a weakness. Society shames and judges
people for having a mental health condition. This is something that all of us can start doing. We don’t need to wait for a company to
tell us it’s OK to care and be compassionate.

– We need more mental health policies. What protections are afforded to people with a mental health condition? If they get fired,
what legal recourse do they have?