Health insurance information for people with mental health concerns in the UK and the impact of having a pre-existing mental health condition and your ability to obtain health insurance coverage.

Introduction

This factsheet is intended for people wanting information about insurance and the possible effect that any previous or existing mental health problems could have on their obtaining cover. It gives background information on discriminatory practices affecting people with mental health problems and ways of making a complaint or seeking redress, particularly under the Disability Discrimination Act 1995. It also gives contact details of organisations and insurers who may be able to help.

Background

Mind receives numerous calls and letters from people who have, or have had, mental health problems and cannot get insurance cover. Many people find that when they inform some insurance companies about previous or existing mental health problems, they are either refused cover or asked to pay an increased premium.

In the past, before information advances, insurance companies found it difficult to obtain medical records or reliably assess risk from mortality rates. As a result, insurance companies worked together to create their own mortality tables based on the national average. Under this system, most people could access insurance. Discrimination against people with mental health problems (and other groups seen as 'high risk') began to occur as certain large insurance companies moved away from this system.

Advances in information exchange meant that these companies could access individual medical records and exclude anyone seen as presenting an unacceptable risk. This is called 'cherry picking' and the main motivation behind it is increased profits for insurers. Some insurers ask a single blanket question about whether a person experiences (or has experienced) mental health problems and decide that anyone answering 'yes' to this question poses too high a risk to insure.

The problem with cherry pickers is that they put pressure on the traditional companies (many of whom really believed in insurance for everyone under the old system), leaving them to pick up all of the 'high risks'. ¹ The result is that many of these smaller firms have been forced to adopt the same practices as the larger companies, which means that many people with any form of mental health history are unable to access insurance at all or are forced to pay premiums that are unacceptably high. This creates two categories of people: those who are 'insurable' and those seen as 'uninsurable'. People with mental health problems generally fall into the latter group.

Ivan Massow, who first sold insurance specifically to gay people who had been turned down by mainstream firms over concerns of HIV and Aids, says that it is essential that the Association of British Insurers, and possibly the Social Exclusion Unit, take note and work together to try and get companies to agree to the original code so that more people can get affordable insurance. Ivan Massow has also launched 'Survivors', an insurance and financial services scheme for people who are discriminated against in the traditional system (see 'Recent initiatives' and 'Useful contacts' sections in this factsheet).

The Disability Discrimination Act 1995

The Disability Discrimination Act 1995 makes it illegal to provide goods, facilities and services to a disabled person (including people with mental health problems) on terms which are unjustifiably different from those given to other people. Since 1996, the Disability Discrimination Act has made it illegal to refuse insurance, or charge higher premiums, unless the company can demonstrate statistically higher risks as a direct result of a specific mental health condition.

When deciding about whether to insure someone, a risk assessment should always be carried out by the insurer and should include a statistical analysis that a person presents "a higher than average risk" (since an individual could sue an insurance company under the Disability Discrimination Act if they were unfairly declined insurance). However, people are reluctant to take out cases against big institutions and only a small handful of cases taken out under the Disability Discrimination Act have been successful.²

Insurers may still ask the single question about whether or not the person applying for insurance has ever experienced a mental health problem and either refuse insurance or increase premiums on the basis of a person saying that they have. If you are applying for insurance and this happens to you (or you believe that your insurer has treated you unjustly), you could have a case under the Disability Discrimination Act 1995 and you may wish to seek legal advice (see 'Useful contacts' at the end of this factsheet).

There are, however, many instances where insurers can still justify discrimination despite the existence of disability legislation (for more information please see the separate sections in this factsheet on private health insurance, travel insurance and life insurance).

Successful claims against insurers under the Disability Discrimination Act

Despite some of the failures of the Disability Discrimination Act to protect people from discrimination, there have been some successes. The experience of psychologist Rachel Perkins, who has been diagnosed with manic depression, is one of the examples to be handed over to the Social Exclusion Unit.

After a pay rise five years ago, she applied to increase her payments to her health insurers. But when she declared her spells in psychiatric hospital, her insurance firm refused.

Rachel, a member of the Disability Rights Commission's Mental Health Action Group, then wrote to her insurance firm detailing how she intended to pursue a case of discrimination under the Disability Discrimination Act.

After a two-year battle, the insurance firm granted Rachel her increased cover. "I am delighted Abbey Life changed their mind," says Rachel. "But at the time I was very angry.

"Under the Disability Discrimination Act, insurers are required to treat disabled people no differently than anyone else. The act requires them to make reasonable adjustments. This just does not happen." ³

Mind and a number of other leading mental health organisations have called for the law to be strengthened to outlaw this kind of discrimination.