As an HR professional, you're likely all too familiar with the challenge of managing rising healthcare costs. Year after year, insurance premiums seem to climb higher and higher, putting a strain on both your company's bottom line and your employees' pocketbooks. But what's behind this alarming trend? Recent data suggests that a significant driver of these rising costs is the increasing prevalence of mental health claims.
The Numbers Don't Lie: Mental Health Claims on the Rise
According to a recent report by the Health Care Cost Institute (HCCI), mental health claims have risen dramatically in recent years.
Between 2013 and 2017, the percentage of adults with a mental health claim increased by 33%, from 14.2% to 18.5%.
During the same period, spending on mental health services grew by a staggering 52%, from $10.6 billion to $16.1 billion.
But it's not just the number of claims that's increasing – it's also the cost per claim.
The HCCI report found that the average cost per mental health claim rose by 14% between 2013 and 2017, from $458 to $522.
This is significantly higher than the overall growth rate for healthcare spending during the same period, which was just 10%.
The Impact on Insurance Premiums
So what does this mean for insurance premiums? Unfortunately, the data suggests that the rising cost of mental health claims is having a significant impact on premiums across the board. A recent survey by the National Business Group on Health (NBGH) found that employers expect their healthcare costs to rise by an average of 5% in 2021, with mental health and substance abuse treatment cited as one of the top drivers of these increases.
But it's not just a problem for employers – employees are feeling the squeeze too.
According to a report by the Kaiser Family Foundation (KFF), the average annual premium for employer-sponsored health insurance reached $21,342 for family coverage in 2020, with employees contributing an average of $5,588 towards this cost. This represents a 4% increase from 2019 and a staggering 55% increase from 2010.
The Role of Untreated Mental Health Issues
So why are mental health claims on the rise? One significant factor is the high prevalence of untreated mental health issues among the general population. According to the National Alliance on Mental Illness (NAMI), 1 in 5 adults in the United States experiences a mental illness each year, but only 43.8% of these individuals receive treatment.
This lack of treatment can have serious consequences for both individuals and employers. Untreated mental health issues can lead to increased absenteeism, reduced productivity, and higher healthcare costs down the line. In fact, a study by the World Health Organization (WHO) found that depression and anxiety disorders alone cost the global economy over $1 trillion per year in lost productivity.
The Business Case for Mental Health Support
So what can employers do to address this growing problem? The data suggests that investing in comprehensive mental health support for employees can have a significant impact on both healthcare costs and overall business outcomes.
A study by the National Institute for Health Care Management (NIHCM) Foundation found that employers who provided access to mental health services saw a return on investment of $2.30 for every $1 spent, due to reduced healthcare costs and improved productivity. Similarly, a report by the American Psychiatric Association (APA) found that employees who received mental health treatment had an average of $1,377 in reduced healthcare costs per year compared to those who did not receive treatment.
But the benefits of mental health support go beyond just cost savings. A study by Deloitte found that companies with high levels of mental health support had 2.8 times the retention rate of those with low levels of support, and a report by the National Safety Council (NSC) found that employees who felt supported by their employer were 38% more engaged and 18% more likely to go "above and beyond" in their work.
The Way Forward: Investing in Mental Health
As an HR leader, you have the opportunity to make a real difference in the lives of your employees and the success of your company by prioritizing mental health support. By investing in comprehensive, data-driven mental health benefits, including AI-powered tools and platforms, you can help reduce healthcare costs, improve productivity and retention, and create a workplace culture that truly supports the well-being of your people.
The data is clear – the rising cost of mental health claims is a problem that can no longer be ignored. But by taking action now and prioritizing the mental health of your workforce, you can help turn the tide and create a brighter, healthier future for your company and your employees. The time to act is now.
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