AIA Australia is urging the Federal Government to allow life insurers to fund early intervention and treatment for mental health conditions.
AIA Australia and New Zealand chief executive Damien Mu said the legislative barriers that restrict life insurers from funding medical treatments for mental health conditions must be overhauled.
The health care system has to keep up with one of the fastest growing issues confronting many Australians and change is long overdue, he said.
"There is currently a gap in the health system where people may be unable to receive or afford the support they need at the time they need it most. We believe life insurers can help to fill this void through funding medical treatments," he said.
By way of example, a person impacted by a mental health condition can receive 10 medical appointments through Medicare. Under the proposed legislative changes, life insurers would be able to provide financial support to cover the costs of any additional appointments once the initial allocation was exhausted, Mu said.
"The changes we are proposing will add an additional layer of support to Australia's health system and would work in conjunction with the existing services, not in direct competition," he said.
If the restrictions are removed the benefits are obvious, he said, noting the most important one is helping Australians suffering from mental health issues when they need it.
The other benefits include the ability to help people to return to work earlier, promoting a more sustainable life insurance industry, and reducing the fiscal burden on the government at a time it is tackling the twin issues of an ageing population and shrinking workforce, Mu added.
Based on AIA Australia data, mental health issues represent the third largest claims, sitting behind cancer and musculoskeletal conditions.
More than $153 million was paid out for mental health claims in 2017, rising by about $25 million each year since 2015.
Mu said depressive episodes followed by anxiety disorders are two leading conditions of all mental health claims. Another staggering trend is mental health becoming more prominent among 20 to 39-years-olds. One-third of all claims from this age group related to mental health, he added.
"While awareness has certainly increased, as a society we have not yet removed the stigma around mental health issues. There is still a long way to go for people to feel comfortable to speak up and seek help," Mu said.