Time to read : 4 Minutes
Health insurance isn’t addressing Australia’s mental health crisis
Let’s talk about the cost of mental health and health insurance. It’s a subject that’s on my mind as I’m currently sporting a very bushy moustache for Movember.
It’s a subject close to my heart as a mentor of mine took his own life three years back.
But I also speak to people about mental health every day as I try to find a suitable health insurance policy for them. And I often have to give them bad news.
Why? More Australians than ever are requesting mental health services on their cover but it’s not cheap. In some cases a lot of people simply can’t afford it.
👇 Let’s go deeper.
The stats don’t lie: we want better mental health cover
I dug into Compare Club’s data. The results were surprising but not shocking.
Under 30s are 155% more likely than any other age group to request mental health services on their health insurance.
They’re also incredibly unlikely to actually take out cover that includes mental health.
Here’s why.
If you’re in your 20s and 30s fit, healthy, and have no children, you won’t need a high level of cover.
Generally speaking, a lower-mid price extras package will be fine.
💆 This usually includes a decent rebate and annual limits for dental, rebates back on glasses and lenses, and probably a spot of physio, chiro, osteo, and massage.
🥉 Hospital cover will usually be a Bronze tier policy that includes a lot of common procedures such as hernia, appendix, and gynaecology, plus joint reconstructions.
I’m talking in general terms here, as everyone’s different. But you should match your cover to what you need and the truth is many millennials and Gen Zs don’t need that much.
Except when it comes to mental health. And that’s expensive.
Just exactly how much does mental health cover cost?
Let’s say you’re in your late 20s. You want to be proactive about your mental health, so you look for a policy that includes both psychology in the extras and in-patient psychiatric treatment as part of your hospital cover.
Here’s where it gets expensive.
🥇 Unrestricted in-patient psychiatric treatments sit in the Gold hospital cover tier: the most expensive level of cover.
🧑🔬 Psychology extras usually sit in a mid-to-high level of cover, although if you want to claim a decent amount of money back, you’ll have to pay more.
How much more? Let’s look at the costs from Compare Club’s panel for a single person in their late 20s.
The cheapest Gold Hospital + High Extras I can find costs $314 a month.*
A Bronze Hospital + Low extras package is $124.51 a month
The Bronze and Low package will probably be more suitable but if you want good mental health cover then you’ll be paying an extra $190 more a month, or $2,280 a year.
That’s a lot for a package that contains a lot of items this person won’t need like hearing aids and cataracts.
Extra confusing extras packages
It gets even more knotty trying to find a package that offers genuine value for money.
The cheapest mid-range extras + Bronze hospital on our panel starts at $133.82 a month but only has a $100 annual limit for psychology**
The most expensive mid-range extras + Bronze hospital on our panel does have an annual limit of $300 but costs $190.93 a month.
That’s a difference of $57.11 a month or $685.32 a year.
Yes, psychology isn’t the only service you’ll be getting on your extras.
But faced with the cost, you can see why many younger Australians opt not to include mental health on their cover.
Private health needs to do better for mental health
A few months ago I told a conference of private health funds and policy makers that the industry HAD to do better when it came to mental health cover.
We have a generation of young adults who want this cover and are willing to pay for it but are priced out of the market.
There’s plenty of research suggesting that this group actually wants to engage with health funds who offer additional support around mental health.
But they can’t afford it.
That’s not good enough, especially when successive governments have constantly fretted about the low take-up of private health by the under 30s.
And this problem won’t go away. According to Beyond Blue:
One in seven Australians will experience depression in their lifetime.
Half the mental health conditions Australians experience in their lifetime start before the age of 14.
Suicide accounted for 40% of deaths in the 15-17 age group and 36% in the 18-24 bracket.
And it’s getting worse. These numbers have risen by 25% in the past decade.
The bottom line
I’m a big believer in the private health system. When done well, it can lift the burden from the public health system and provide excellent value for money.
But mental health is a big blind spot for the industry. It’s not structured for a generation that wants to buy it. And the industry is missing out on customers who will likely stick with the system for many years to come.
I, sadly, can’t change the industry currently. But I can make a bit of an immediate difference with this bushy moustache on my face. If you’d like to donate to a good cause, my fundraising link is below.
You can support Eli's Movember fundraising at https://au.movember.com/mospace/14623168 Go deeper:
