Need to know
- Posing as a customer, we applied for travel insurance with 15 brands and disclosed a pre-existing condition of depression with anxiety, one of the most common mental illness combinations in Australia
- Under the scenario we tested, mental health cover was either flatly denied or approved with a massive premium increase
- When mental health cover was an automatic inclusion, it came with so many restrictions that anyone who had previously sought help would likely be ruled out
There was a major shake-up in the travel insurance industry eight years ago, when a 21-year-old successfully challenged the denial of their mental health claim by the mammoth insurance company QBE.
The litigant in question had scrimped and saved for a big overseas trip. But then, as has happened or will happen to nearly half of us (44% of the population), they suffered a mental illness episode.
They couldn't take the trip and QBE refused to reimburse the travel costs.
The legal case that highlighted the discrimination
The 21-year-old, who had experienced an unprecedented bout of depression, bravely took legal action against QBE.
After winning at the Victorian Civil and Administrative Tribunal (VCAT) in a case brought by Victoria Legal Aid, they got their $4292 back.
QBE couldn't produce the statistical data to justify the blanket mental health exclusion in its policy, so the rejection of the travel insurance claim was ruled discriminatory.
That set the stage for a series of inquiries into the industry's stigmatised approach to mental health cover, and the industry-wide lack of data to justify the discrimination.
In 2019, the Victorian Equal Opportunity and Human Rights Commission (VEOHRC) dropped a bombshell report: a two-year investigation had found that blanket mental health exclusions by three major travel insurers were inherently discriminatory.
It was a wakeup call for the entire sector, or was meant to be.
'We will treat you fairly'
Following the VEOHRC report, the insurance industry committed to removing blanket mental health exclusions from its travel insurance products.
It also updated the General Insurance Code of Practice, which now says insurers will "at a minimum" comply with the Disability Discrimination Act and "treat people with any past or current mental health condition fairly".
The industry was also meant to start basing risk assessments on individual mental health profiles rather than lumping everyone into the same mental health basket.
And it was meant to give clear reasons for rejecting an applicant's mental health cover as well as provide the risk data behind the decision.
But reports of discrimination continued.
Stigma report card
In 2020, the mental health advocacy group SANE released its National Stigma Report Card.
Of the people who reported they had faced discrimination by a financial services provider due to their mental health condition, nearly 90% said they'd been treated unfairly by an insurance company.
One person wrote: "I am not able to receive travel insurance unless I exclude my mental health condition."
The Public Interest Advocacy Centre (PIAC) has also played a major part in pushing the industry toward fairer treatment of people living with a mental illness.
Nearly 90% said they'd been treated unfairly by an insurance company
In a 2021 report, PIAC highlighted cases where travel insurance claims for mental health cover were unfairly denied.
In one, a woman who suffered a severe panic attack while travelling in Thailand and spent a few days in the hospital, had her claim for medical expenses rejected on the grounds of a blanket mental health exclusion. The insurer also implied the panic attack would be classed as a pre-existing condition due to the woman experiencing postnatal depression 16 years earlier.
The PIAC has provided legal representation for many people who have been similarly treated, and won some cases. But the isolated wins don't seem to have added up to systemic change.
Where some degree of cover for depression and anxiety was an automatic inclusion, the restrictions seemed designed to prevent anyone from actually claiming.
CHOICE tries 15 insurance providers
So, how far has the industry really come since the VCAT case and the VEOHRC report? According to the results of a recent CHOICE mystery shop of the travel insurance industry — not very.
Posing as a customer, we applied for travel insurance with 15 providers and disclosed a pre-existing condition of depression with anxiety, one of the most widespread mental health conditions in Australia.
When we declared we had visited a psychiatrist and been to hospital due to depression or anxiety once in the previous two years – and had cancelled travel plans because of it once in the previous five years – mental health cover was either flatly denied or approved with a massive premium increase.
We recorded increases from $458 to $1720, from $735 to $2869 and from $392 to $1472, to cite a few examples.
These conditions can affect people differently ... and many people continue to work, travel, play sport and socialise whilst managing their mental health
Royal Australia and New Zealand College of Psychiatrists president Dr Elizabeth Moore
We had the option of indicating that we'd gone to hospital more frequently or had been forcibly admitted, but we stuck to the general profile of a person who might have moderate and controlled depression and anxiety and had received psychiatric care.
All our test applicants were, in effect, dropped into the same "depression with anxiety" mental health basket, though the impact of the illness has a wide spectrum.
"Anxiety and affective disorders [a category that includes depression] are some of the most common conditions experienced by Australians," Royal Australia and New Zealand College of Psychiatrists president Dr Elizabeth Moore told CHOICE.
"These conditions can affect people differently, with a broad range in severity, and many people continue to work, travel, play sport and socialise whilst managing their mental health."
Premiums can double if you've sought help
When we declared we had visited a psychiatrist in the previous two years, but hadn't cancelled a trip or been to hospital, the premium still more than doubled in many cases, though in others it only went up slightly or stayed the same.
The travel insurance industry appears to be discriminating against people who've found the courage to seek help for a mental health condition. Rather than such disclosures resulting in the denial of cover or inflated premiums, these efforts should be recognised as an attempt to reduce the risk of future mental health issues, including while travelling.
In all cases, cover was denied if you had an appointment scheduled with a psychologist or psychiatrist
"We should be making it easier for people who seek professional support to manage their mental health conditions to lead their lives fully and functionally, and access essential personal-centred healthcare like everyone else, no matter where they are," Moore says.
In cases where some degree of cover for depression and anxiety was an automatic inclusion (seven of the 15 brands we checked) the restrictions seemed designed to prevent anyone from actually being covered, or from claiming in the event that cover was needed.
In all cases, cover was denied if you had an appointment scheduled with a psychologist or psychiatrist, or if you had been diagnosed with depression in the previous three years, or if you had ever had to cancel a trip due to your mental health.
Blanket exclusions are gone, but a stigmatised and overly risk-averse approach to mental health seems to be alive and well.
Most insurers denied mental health cover; some offered it with a massive premium increase.
'A very tick-box exercise'
One travel insurance customer we spoke to, Amir*, carefully manages his bipolar disorder with medications and doesn't consider himself a high risk to insurance companies. Yet most insurers refused to provide mental health cover once he had disclosed his pre-existing condition. One offered cover if he was willing to pay $1700, which was more than his airfare.
Amir started off applying online, where applicants are often given the option of calling the insurer to discuss their pre-existing conditions after ticking the "pre-existing condition" boxes online. He ended up talking to four providers.
"I think I was on the phone for about half an hour with each of them. They asked me a lot of very detailed questions about whether I'd ever had to cancel travel plans before, whether I was seeing a psychiatrist or psychologist, whether I'd changed my medication recently or had been to hospital or been forcibly admitted to hospital. They all asked me the exact same questions," Amir says.
These questions – the same ones we were asked during our online mystery shop – were not being asked by mental health professionals, but by salespeople.
I don't think that there is an unreasonable risk involved in offering me an insurance policy
Travel insurance customer 'Amir'
After one insurance rep said no to mental health cover, they repeatedly tried to get Amir to pay for the cover anyway.
"The guy asked me about three times whether I wanted to purchase that policy."
Amir doesn't believe he was treated fairly.
"It felt like a very tick-box exercise, like it was predetermined that I had no chance of getting cover. A much better system would involve the participation of a doctor or a mental health professional, someone who could actually assess me. I don't think that there is an unreasonable risk involved in offering me an insurance policy."
CHOICE has heard from others who have found it difficult or impossible to get travel insurance cover for mental health conditions.
'An ongoing problem'
Ellen Tilbury, a senior solicitor at PIAC, is less than shocked about the findings of our investigation.
"It's not a huge surprise that insurers are imposing conditions of this nature. It's an ongoing problem," Tilbury says.
"It was always going to be a question of how insurance companies approached disclosure of pre-existing conditions and what approach they might take. So it's disappointing to see that they are still denying cover in a lot of circumstances. And I think there needs to be some greater level of scrutiny from either the Australian Human Rights Commission, which oversees discrimination law, or the corporate regulator regarding whether insurers are complying with the law."
A Victorian Equal Opportunity and Human Rights Commission spokesperson tells CHOICE that "discrimination against people on the basis of their mental health in the insurance industry is a longstanding issue", adding that it's the subject of many of the complaints the organisation receives.
There needs to be some greater level of scrutiny from either the Australian Human Rights Commission, which oversees discrimination law, or the corporate regulator
Ellen Tilbury, senior solicitor at the Public Interest Advocacy Centre
"Every year we see the significant harm caused by mental health discrimination."
Following its 2019 report, the VEOHRC last consulted with the insurance industry in October 2020, when insurers again committed to using statistical data in their screening processes and developing different risk profiles for different types of mental health conditions.
The Commission has not been monitoring the industry's progress since then, and our findings were cause for concern.
"If an insurance provider refuses to provide coverage, sets a premium at a higher rate, or imposes restrictive terms on someone because of a diagnosis of a mental health condition, or because they have been hospitalised or cancelled travel plans because of their mental health condition in the past, this may be unlawful discrimination," the spokesperson says.
Around 5 million people potentially affected
Priscilla Brice, CEO of BEING – Mental Health Consumers, a member of the National Mental Health Consumer Alliance, says "we believe the insurance industry's practice of denying coverage or charging excessive premiums to a person on the basis of mental health challenges is unreasonable and discriminatory." She adds that "around 5 million people are potentially affected by these policies".
Brice points to research showing that people experiencing mental health challenges are twice as likely to also be experiencing financial challenges.
"Consequently, discrimination that imposes a financial penalty on those of us living with mental health challenges becomes a double-edged sword, making it harder for us to participate in society, and adding pressure to our ongoing mental health concerns," Brice says.
Industry responds: 'We've made significant steps'
Despite the findings of our mystery shop, a spokesperson for the Insurance Council of Australia (ICA) says "the travel insurance industry has made significant steps in the availability of cover for people with mental health conditions in recent years."
They point to the providers who offer cover as an inclusion (with considerable restrictions) and the cover available from some of the providers we tested (even when CHOICE found the premiums were hugely inflated).
We believe the insurance industry's practice of denying coverage or charging excessive premiums to a person on the basis of mental health challenges is unreasonable and discriminatory
Priscilla Brice, CEO of BEING – Mental Health Consumers
As for the specific data to justify the mental health cover denials we recorded, the spokesperson says "Insurers consider individual circumstances when pricing a premium and they have their own underwriting criteria for determining premium pricing and availability."
Insurers take their obligations under the General Insurance Code of Practice "very seriously", the ICA says.
No further evidence
Ellen Tilbury says the question of whether the insurance industry is engaging in discrimination is an open one.
"If they can argue that they have some basis on which to say that the discrimination is reasonable, the discrimination laws, in some ways, allow them to do that. And there's always an ongoing question of what that really means."
But the evidence to prove it's reasonable has yet to emerge.
Stock images: Getty, unless otherwise stated.
