Fighting mental health insurance discrimination: Sarah’s story

Sarah was on a long-anticipated holiday in Thailand in August 2016 when the unthinkable happened. While having dinner with her friends, she experienced a sudden and severe panic attack. The episode made her feel paranoid and confused and was so severe that she was eventually admitted to hospital where she stayed for four days to support her recovery. Sarah’s illness meant she couldn’t travel alone, so her husband had to fly to Thailand to accompany her on the journey home. Thankfully, with appropriate treatment overseas and at home, Sarah made a full recovery.

When she was feeling better, Sarah made an insurance claim for her medical expenses and unexpected travel costs. She had coverage for medical assistance so she thought her claim would be fairly straight forward. However, she was shocked when the insurance company, 1Cover, refused to pay, citing a blanket exclusion for mental health conditions in her policy.

‘Finding out that I wasn’t covered was a major shock,’ said Sarah.

1Cover also implied that the condition Sarah experienced in Thailand was a pre-existing illness, on the basis that she had experienced post-natal depression following the birth of her first child, over 16 years earlier.

‘I was also amazed that 1Cover seemed to consider that an illness I had fully recovered from 16 years ago meant that the episode I experienced in Thailand was somehow ‘pre-existing’,’ Sarah said.

Mary Flanagan, a solicitor in PIAC’s Mental Health and Insurance Project, said that Sarah’s story isn’t particularly unusual.

‘Many people don’t know that most travel insurance policies exclude cover for mental health conditions, including mental health conditions that develop after they purchase the policy’.

In Sarah’s case, 1Cover eventually paid Sarah’s claim, but only after PIAC assisted Sarah to challenge 1Cover’s earlier decision.

‘Blanket mental health exclusions may constitute unlawful discrimination.

While we’ve seen some insurance companies drop them in recent months, there’s still a number of policies in the Australian market with these exclusions,’ said Mary.

‘When taking out a policy, people should read the product disclosure statement carefully and make sure they are aware of any exclusions so they don’t get caught out.

‘And if you feel you have been unfairly treated by an insurance company because of a mental health condition, don’t be afraid to challenge the decision. If you’re unhappy with the outcome, consider contacting us at PIAC for advice,’ said Mary.

‘The more people who speak up about these unfair clauses, the more likely insurance companies are to improve their policies, to make them fair for everyone,’ added Mary.

Photo: Flickr

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