This is an exclusive BHB+ story

Behavioral health spending has ballooned since the COVID-19 pandemic – and payers are taking note.

This, combined with rising hospital costs and the high cost of GLP-1 medications, has prompted payers to reassess their premiums.

One of the main factors driving this change is the trend that therapy has gained mainstream acceptance as beneficial for everyone. Still, many are questioning the sustainability of therapy for all. And eventually, those expenses will be passed back to the member.

“If we went to the Freud model – therapist and patient and everyone got access – your premiums would be 3 times higher on your medical insurance, because it just is not a model that can be sustained,” Rhonda Robinson Beale, senior vice president and deputy chief medical officer of mental health services at UnitedHealth Group (NYSE: UNH), recently said at The Future of Mental Health conference.

On the flip side, I would argue that better behavioral health care is linked to a reduction in overall medical spending costs. A report from Evernorth found that patients with a newly diagnosed behavioral health condition who received outpatient care generated cost savings of up to $2,565 per person over a 15-month period.

Even so, it’s important to note that therapy for all is different from therapy for those with a diagnosis. Beale noted that the bulk of folks seeking treatment are looking for something sub-clinical.

Several potential options could help balance the demand for services with the rising costs for payers. First, a significant portion of the population could benefit from digital services or coaching. And secondly, the employer may become a larger part of covering behavioral health care in the future.

In this BHB+ Update, I will explore:

– The payer’s rising costs associated with behavioral health

– Alternatives to traditional care

– The employer’s role in covering mental health

Utilization trends

The rise in behavioral health utilization has been a top concern for payers since the COVID-19 pandemic. In 2023, UnitedHealth Group noted that behavioral health utilization increased by double digits.

Executives of the company shared similar information during UnitedHealth Groups Q2 2025 earnings call just this week.

“Elevated trends are apparent and further affected by increasing and unanticipated acceleration of the cost and behavioral health, where the trend is running at 20%, as well as in pharmacy and home health,” Tim Noel, CEO of UnitedHealthcare, said this week. “We anticipate the existing rate and acuity mismatch will extend well into next year beyond these segment-specific factors.”

While utilization is generally seen as a pressure point for payers, many providers have seen the benefits of the demand in their health services divisions, which directly provide care.

But it’s hard to ignore the financial implications of these large changes.

“Utilization of inpatient and outpatient behavioral health services is soaring,” according to a PwC report. “Claims for inpatient services were up nearly 80% between January 2023 and December 2024. For outpatient services, claims were up nearly 40% over that same period. One out of three health plan actuaries we surveyed named behavioral health services as a top three inflator and said they expect a 10% to 20% trend for behavioral health next year.”

In the report, PwC advises payers to collaborate with providers to develop alternative-based payment models. It also advises teaming up with EAP programs to help with coverage and limit the cost of care.

Executives from Centene Corp. (NYSE: CNC) also discussed the challenge of skyrocketing behavioral health utilization during the insurance company’s Q2 2025 earnings call. Specifically, Centene is facing rising costs associated with applied behavior analysis (ABA) therapy.

“Behavioral health was the most significant driver of the quarter-over-quarter increase with ABA, or applied behavioral analysis, as an accelerating pressure point across a number of our markets,” CEO Sarah London said.

Investing in triage and navigation

OK, so we’ve established that behavioral health care costs are going up, more patients are accessing care than ever before, and there are alternatives to traditional therapy.

All of that works in theory, but it can be tricky for patients to figure out what kind of care they need and where to access that care. The expectation that a patient understands the complexities of the behavioral health arena is unrealistic.

What is the difference between a clinical therapist and a behavioral health coach? Why can a psychiatrist prescribe medicine and a psychologist can’t?

Health plans and employers could benefit from investing in triage and care navigation tools, I believe. Those could be digital services that use AI to help navigate and answer questions about the system. It could also be a person who understands the nuances of the space and what each potential patient is looking for.

A person with anxiety about an upcoming final probably doesn’t need to see a psychiatrist. However, a person with clinical depression who hasn’t gotten out of bed in three days probably isn’t going to get a lot out of a chatbot walking them through CBT.

More investment in the right tools could lead to lower costs downstream.

Finding an alternative to traditional therapy

Speaking of digital. I love a good app. Having tracked my pregnancy from blueberry baby to watermelon child, I’m all in on a well-designed app.

Investors have taken note that mental health is a low-hanging fruit for the digital space. Rock Health consistently reports it is the top clinical indication for digital health funding.

Virtual care makes sense for so many reasons when it comes to mental health. Still, to truly combat the financial side, digital tools need to provide more than an individual provider seeing one patient at a time.

This could be digital AI assistants, though most chatbot companies are quick to tell users this does not replace a therapist and is a wellness tool. Additionally, some folks may need a wellness tool. I also think virtual group therapy could be an avenue to help reach more individuals at lower rates. Resilience Lab is an example of a virtual provider offering group services.

Additionally, more digital providers could tap into the paraprofessional workforce, such as behavioral health coaches and peers, offering lower-cost services. But if payers want to tap into these services, they must properly reimburse.

More community programs could be the answer to linking more individuals in need of support to subclinical care, I believe.

“[Traditional therapy] can’t work to be the sole supplier of services and behavioral health; you need to have alternatives,” Beale said. “So I talked about peers, community resources, schools, YMCA, even other support groups that have been out there for years, like the Mankind project.”

Employers covering more

As behavioral health services become more commonplace, employees are expecting more from their employer.

Employers have often worked in the behavioral health space through employee assistance programs (EAPs). However, as more of their workforce seeks out care, some HR departments are looking for additional tools.

Recently, BHB reporter Ashleigh Hollowell spoke with industry insiders about the employer’s role in substance use disorder care.

“I think we’re in a transformative period right now,” Philip Van Guilder, director of community relations at American Addiction Centers, told her. “We’re starting to see across the board that employers that are invested in addiction treatment and recognizing that supporting employees’ mental health is crucial for maintaining productivity and reducing absenteeism – which is 50% greater for addiction than a normal person struggling with regular issues.”

Investing more in behavioral health services for their workforce could pay dividends in productivity. It could also make an employer more competitive.