Insurance Research Institute "Social Stigma Must Be Reduced for Rate Setting"
To address the increasingly serious mental health issues such as depression and anxiety disorders, it has been argued that insurance companies need to develop various insurance products and mental illness prevention and management services.
On the 29th, the Korea Insurance Research Institute stated in its report titled "Strengthening the Role of Insurance in Promoting Mental Health" that "to improve the mental health of the public, close cooperation between the public and private sectors is necessary, and insurance companies should consider customized insurance products targeting specific occupations and generations."
Although coverage within public and private insurance has expanded recently due to growing social demands for mental illness coverage, the scope of coverage remains limited. Patients with severe mental illnesses require long-term hospitalization, but public health insurance has limitations in supporting long-term inpatient treatment costs. For some mild mental illnesses or borderline mental illnesses such as stress and anxiety disorders, public health insurance coverage is limited, making it difficult to receive necessary treatment. Some examinations, psychological counseling, psychotherapy, and cognitive behavioral therapy required for mental health treatment are classified as non-reimbursable items, often resulting in patients bearing the full cost.
The background of coverage gaps includes social and structural factors inherent to mental illnesses. The Korea Insurance Research Institute pointed out that due to social stigma associated with mental illness, patients are diagnosed and treated less than they actually need. Consequently, insurance companies struggle to secure sufficient experience statistics, making it difficult to predict loss ratios or manage risks, which complicates the design of insurance products.
To expand coverage, the Korea Insurance Research Institute analyzed that insurance companies could first develop customized insurance products for specific occupations or the 10s and 20s age groups, where mental illnesses mainly occur. Additionally, when providing insurance products for mental illness prevention and management, it is necessary to actively utilize mental health management programs or applications (apps) and wearable devices that track health activities. Using apps can offer mental health coaching, digital therapeutics, and faceless remote medical consultations preferred for anonymity.
Jae-il Cho, a research fellow at the Korea Insurance Research Institute, said, "Mental health-related insurance is a disease difficult to cover even in Western countries due to the unique characteristics of mental illness," but added, "Since Korea has also joined the ranks of advanced countries, it is necessary for the public and private sectors to cooperate to find solutions." He further predicted, "If the government implements policies to minimize social stigma against mental illness and patients visit hospitals, insurance companies will be able to secure related data and calculate insurance rates."
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