No health without mental health: Insuring mental health conditions in juveniles

Traditionally, mental health^[1] has not been the focus of life and health (L&H) insurers. This is partly due to exclusions placed in the policies, and to some extend a result of the notion that lacking measurable laboratory markers and the like, diagnosis of mental conditions is a tricky field. Then, of course, suicide commanded attention, and so did depression in the context of disability insurance. Nonetheless, there is no health without mental health. As such, mental health and mental illness are being increasingly discussed in the public domain. That is partly due to the fact that the burden of mental illness on society is very significant. According to a recent report from The Lancet,^[2] the incidence of mental illness is trending upward and the economic costs are estimated to reach USD16 trillion worldwide by 2030, chiefly because of the young age of disease onset and reduced productivity.

Furthermore, the justice system is heavily exposed to offenders with mental health issues. For example, in the United States, it is estimated that more than half of inmates in jails and prisons are affected by mental disorders.^[3]

As the wider range of mental illnesses now comes into view, not least in the area of insurance for juveniles, it becomes apparent that a more open approach by the L&H insurance industry is warranted particularly in markets where juvenile insurance is common.

Context

Mental illness can have significant adverse ramifications for the function of societies and the well-being of individuals. That clearly also applies to mental disorders in children and adolescents. Childhood mental disorders can be grouped as emotional, behavioural and developmental conditions. Common diagnoses include anxiety, depression, conduct disorders, Autism Spectrum Disorders (ASD), Attention Deficit Hyperactivity Disorders (ADHD) and intellectual disability. It should be noted that in many cases, the diagnosis is not an isolated one, ie more than one mental disorder is present in the same patient.

A recent UNICEF report^[4] highlights the gravity of the problem. The report suggested that at least 13% of 10 to 19-year-old children and adolescents are diagnosed with a mental health condition globally. Estimates from the United States^[5] also shed light on the magnitude of the issue: between 2016 and 2019, ADHD, anxiety, behavioural problems and depression were diagnosed in 9.8%, 9.4%, 8.9% and 4.4%, respectively, of children aged 3 to 17.  Furthermore, girls generally constitute the majority of children affected.^[6]

Long-term outcomes

Childhood mental illness can have long-lasting consequences that impact a person’s well-being in adult life. Some problems may simply persist into adulthood, but there is also a higher risk of physical and mental disorders developing in adulthood and a higher risk of unemployment, need for social support, and conflicts with the law. Furthermore, the building and maintaining of social relationships later in life may be negatively impacted by mental illness during childhood.

Product concepts for specifically covering mental health conditions in juveniles

Currently, most health insurance policies exclude treatment of mental illness unless the treatment requires hospitalisation. Given the prevalence of mental illness and the dire consequences on individuals and societies, this rather rigid and narrow product design called for a better solution or an alternative.

An example of recent innovation in insuring mental illness is the concept of a critical illness product that pays a lump sum upon the diagnosis of a severe mental condition. This helps ensure the patient (the child or adolescent) can afford the appropriate care regardless of whether care is delivered by in-patient or out-patient services. It is well known that early intervention is critical for treating mental disorders. For instance, for children with autism spectrum disorder (ASD), early intervention often mitigates the symptoms and brings about better quality of life in adulthood. Putting this concept into practice, Peak Re has developed a product that pays a lump sum upon the diagnosis of ASD. The proceeds can be used to fund (early) therapy and interventions to avert institutionalisation and long-term detrimental sequelae.

Conclusion

Mental illness has become a prominent topic for L&H insurers. The notion that mental disorders are fundamentally different to somatic diseases and hence should be covered in a restrictive way is no longer tenable. This is particularly true for childhood mental conditions since children and adolescents are particularly vulnerable and deserve adequate care. Therefore, insurers are asked to find solutions. We have developed a model that may help insurers to broaden their offerings in this field.

[1] Mental health “is a state of well-being in which an individual realizes his or her own abilities, can cope with the normal stresses of life, can work productively and is able to make a contribution to his or her community”, according to the World Health Organization. Mental disorders are generally characterised by a combination of abnormal thoughts, perceptions, emotions, behaviour and relationship with others. In this article, mental disorders, mental health conditions and mental illness are used interchangeably.

[2] The Lancet Commission on global mental health and sustainable development, The Lancet, October 2018.

[3] James, D. J., & Glaze, E. (2006). “Mental health problems of prison and jail inmates”, U.S. Bureau of Justice Statistics Special Report, September 2006.

[4] The State of the World’s Children 2021, UNICEF, October 2021.

[5] Source: US Centers for Disease Control and Prevention, Data and Statistics on Children’s Mental Health, https://www.cdc.gov/childrensmentalhealth/data.html.

[6] Campbell, O.L.K, Bann, David & Patalay, Paveetha, “The gender gap in adolescent mental health: A cross-national investigation of 566,829 adolescents across 73 countries”, SSM-Population Health, Vol. 13, March 2021.