COVID-19 Drives Spending On Mental Health Claims Up 25%, Insurer’s Report Shows

The rise in behavioral issues amid the pandemic has also had a significant health effect on employee claims for mental health services, a new report shows.

Specifically, spending on mental health insurance claims increased about 25% year-over-year in 2020.

The findings were put out by the international financial services company and insurer Sun Life. which looked at the costs of insurance claims to employers resulting from a variety of services, including mental health care. The report was compiled from Sun Life’s book of business data.


Data from the report covered the period between 2017 and 2020, honing in on stop-loss insurance, which employers and insurers use to protect themselves against large individual claims. Overall, stop-loss claims related to mental health disorders rose 21% last year compared to 2019.

Also interesting to note: Although the total spend for mental health claims also rose significantly in 2020, the average cost of a mental health claim per person essentially remained flat at just under $80,000. The report said that the rise in total spend was indicative of more individuals being affected by mental health issues, as opposed to the cost of treatment becoming more expensive.

For the four-year period included in the report, as well as for 2020 alone, the most expensive subcategories within mental health were alcohol use disorder (AUD), opioid use disorder (OUD) and depressive disorders. For deductibles under $50,000, mental health disorders rank the fourth highest of all health conditions in terms of total spend.


The findings are hardly a shock, considering that demand for behavioral health and addiction treatment services have risen by more than 50% since the onset of the pandemic, according to the National Council for Mental Wellbeing.

In the report, Sun Life acknowledged the urgency of the increase and suggested behavioral health issues could likely linger, even as the pandemic continues to subside in America.

“The loss of daily contact, grief, work stress, finances and on-going health or family concerns

may contribute to a sustained impact of the pandemic on mental health, even when we

think it’s ‘over,’” the report noted.

The authors of the report also said that the findings should highlight the need for self-funded employers to properly invest in mental health resources for its workforce going forward.

“Addressing the long-term effects of the COVID-19 pandemic on the mental health of employees and their families remains a public health priority,” Sun Life wrote in the report. “Employers in different industries, with different demographic profiles, may have unique needs

within their employee population. It is important to think about how the pandemic may have affected the mental health of … employees to provide the right resources and support.”

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