Spike in Telehealth Spending for Mental Health May Drive Payers to Push Back on ‘New Status Quo’

The pandemic has kicked off an uninterrupted spike in telehealth utilization for mental health services and increased spending for those services.

Such spending may inspire commercial health plans to cut back on the historically generous and flexible approach to telehealth rolled out to compensate for the lack of access due to the coronavirus pandemic.

A new study of 1.6 million mental health service claims from commercial health plans from 2019 to 2022 finds mental health service spending was up 29.5% during the acute phase of the pandemic (March 13 to Dec. 17, 2020) and up 53.7% during the post-acute phase of the pandemic (Dec. 18 to Aug. 31, 2022). 


The study — conducted by the RAND Corp. and Castlight Health — raises again the fact that COVID-prompted telehealth utilization in the U.S. expanded overall mental health utilization. It found that overall mental health utilization was 38.8% higher in August 2022 compared to the pre-pandemic period.

“If greater utilization of health services drives higher health care spending, insurers may begin pushing back on the new status quo,” Jonathan Cantor, lead author of the study and a policy researcher at the RAND Corporation, said in a news release. “Insurers may look for ways to curb costs and that could mean less flexibility about using telehealth for mental health services.”

Further, the study report notes that the federal public health emergency (PHE) precipitated the loosening of telehealth overall but was especially impactful for behavioral health.


Telehealth utilization for mental health services increased by 1,019% during the acute phase of the pandemic compared to the pre-pandemic era. By the post-acute pandemic period, telehealth utilization had increased by 1,068%, while in-person visits increased by 2.2% compared to the pre-pandemic era. 

By August 2022, in-person visits had returned to 79.9% of pre-pandemic levels. 

Some of the nation’s largest health plans have disclosed increased utilization and spending on behavioral health benefits. 

At the beginning of August, The Cigna Group (NYSE: CI) executives said they have seen behavioral health utilization grow “at a strong clip, not just this year, but for the past few years.” The growth was expected and is expected to help defray other, greater health costs in the future. The executives also mentioned that employers are suffering from “point solution fatigue” regarding digital behavioral health services.

Executives of UnitedHealth Group (NYSE: UNH), the largest private health plan provider in the U.S., saw higher behavioral health benefit utilization in the second quarter of 2023 and were assuming higher behavioral health usage as it developed future plan benefits.

However, other research by the PwC Health Research Institute found that the bulk of payers do not accounting for behavioral health in setting pricing.

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