Summary
Approximately 1 in 5 adults and 1 in 6 youth experience mental illness each year, and these rates have been rising. Over 20 million Americans have a substance use disorder. The COVID-19 pandemic has exacerbated mental health issues nationally and in the workplace. With increases in both the number of individuals diagnosed with mental health disorders and use of health care services, higher spending is of great concern to plan sponsors of health benefit programs. In this study, we investigate trends in spending on mental health disorders. The study examines how diagnoses are changing and associated changes in use of health care services and spending.
Key findings:
- The percentage of the population under age 65 with employment-based health coverage diagnosed with a mental health disorder increased from 14.2 percent in 2013 to 18.5 percent in 2020.
- Use of mental health care services increased between 2013 and 2020. Use of outpatient services increased the most — the percentage of enrollees using outpatient services increased from 12 percent to 16 percent, a 32 percent increase. In contrast, use of prescription drugs increased from 19 percent to 21 percent, a 6 percent increase. Use of inpatient services was unchanged at 0.3 percent between 2013 and 2020.
- Overall spending on mental health care services as a percentage of total spending increased from 6.8 percent in 2013 to 8.2 percent in 2020. As expected, among diagnosed enrollees, spending on mental health care services as a percentage of total spending was higher — roughly 20 percent between 2013 and 2019, increasing to 20.5 percent in 2020. Enrollees with a mental health disorder also tend to have higher overall health care spending.
- Among enrollees with a mental health diagnosis, average annual spending on mental health care services increased from $1,987 to $2,380 between 2013 and 2020. It increased 20 percent, or an average of 3 percent per year, but examining overall trends buries some important findings. Spending on outpatient mental health services increased 37 percent, while spending on prescription drugs for mental health disorders fell 15 percent. In contrast, overall spending on health care services increased 20 percent overall, or 3 percent per year, suggesting that either use of health care services or prices are increasing faster for mental health care services than for other services.
- Outpatient mental health care services accounted for two-thirds of total spending in 2020, up from just over one-half in 2013. The share taken by outpatient spending increased in part because spending on prescription drugs fell and because the dollar amount of outpatient spending increased. The decline in the share taken by spending on prescription drugs, from 34 percent to 23 percent of total spending between 2013 and 2020, was due to lower average prices for drugs, which may be due to some medications becoming available in generic form.
- Although all ages saw increased prevalence over the study period, prevalence was lower for older ages and increasingly higher among younger adult categories. Overall, the percentage of enrollees with a diagnosis for any mental health disorder fell from 21.5 percent for those ages 18–24 to 16.7 percent for those ages 55–64. Diagnoses for children (enrollees under age 18) were at 14.9 percent, lower than any of the adult categories.
- Anxiety diagnoses have been trending up for all ages since 2013. Similarly, diagnoses for major depressive disorder (MDD) have also increased for all groups. In general, diagnosis rates have increased faster among younger enrollees than among older enrollees.
- Spending on mental health care services as a percentage of total spending increased for all but the oldest age groups. Such spending increased the most for younger enrollees.
- Traditionally, older people use more health care than younger people. As a result, health care spending is not evenly distributed across the population. The same pattern does not hold for spending on mental health care services. The distribution of spending on mental health care services is much closer to the distribution of the enrolled population.
The data presented in this paper for 2020 — the first year of the COVID-19 pandemic — may underrepresent the number of people with mental health disorders if enrollees were unable to receive care because of shortages of mental health providers or because they did not seek or were unable to receive care due to lockdowns. The COVID-19 pandemic appears to also have heightened employers’ awareness and response to employees’ mental health disorders. And policymakers have also been addressing the issue of access to mental health services through various forms of mental health parity legislation. Despite heightened employer awareness and response and public policy efforts to address access, with increases in both the number of individuals diagnosed with mental health disorders and use of health care services, higher spending will continue to be of great concern to plan sponsors. A healthier and more productive work force should be considered as employers seek to manage the cost of treating mental health disorders.
This study was conducted through the EBRI Center for Research on Health Benefits Innovation (EBRI CRHBI), with the funding support of the following organizations: Aon, Blue Cross Blue Shield Association, ICUBA, JP Morgan Chase, Pfizer, and PhRMA.