A new report published by System 2 shows for the first time how young people are being hit by the rapidly rising costs of accessing mental health services, and are paying considerably more for these services than those aged over 45.
Using data published by the Australian Institute of Health and Welfare, the report shows that:
- In the last two years, young people accessing Medicare-subsidised non-inpatient mental health services have seen a 52% increase in out-of-pocket (OOP) costs.
Those aged 15-24 years old paid an average of $57.69 per service in 2022-23, compared to $37.91 in 2020-21.
- These out-of-pocket costs have risen at 4.5 times the rate of Consumer Price inflation over the period.
Outpacing already high rates of inflation, rapidly rising out-of-pocket payments exacerbate the cost of living crisis for those needing mental health support.
- Young people are paying much more than those aged over 45 to access mental health services.
Those aged 15-24 pay 35% more per service than those aged 45-64, and nearly double that of 65-79 year olds. This pattern is quite different to common services such as Medicare GP non-mental health services, where those aged 45-64 paid the most.
Our research showed that the increase in the average Medicare Benefit Schedule (MBS) benefit paid (<6% from 2020-21 to 2022-23) had been much smaller than the increase in the average provider fees charged (16%), resulting in this large increase in OOP costs (50% across all age groups).
John Craven, Executive Officer at System 2, commented:
“Rapidly rising costs means that many young people cannot afford to access the mental health support they urgently need. As well as being a health emergency, it’s unfair that young people are paying so much more than Gen X and Baby Boomers. This intergenerational inequality in health care costs adds further to growing economic immobility caused by the housing crisis.”
How OOP costs vary by service
Average OOP costs for Medicare subsidised non-inpatient mental health services vary depending on the type of health professional delivering the service. In 2022-23, Australians paid an average of $86.10 for a Medicare-subsidised non-inpatient appointment with a psychiatrist, $61.57 for a clinical psychologist, and $66.79 for a non-clinical psychologist.
Dr Erin Dakin, Youth Mental Health Research Lead at System 2 and Research Advisor at the Behavioural Insights Team, commented:
“These out-of-pocket costs for accessing Medicare subsidised mental health services can really stack up, since the average person requires multiple sessions to get the help they need and young people are already battling a cost of living crisis. Costs can become even more out of reach once the annual limit of ten subsidised sessions in a care plan is passed.”
What do young people think?
Consultation with the twelve members of the System 2 Youth Advisory Board confirmed that while rising costs are a major barrier, other factors include local availability of appropriate services, waiting lists and stigma.
Kushagra Rathore, a 22 year old from Perth, and member of System 2’s Youth Advisory Board, commented:
“One of the biggest barriers to accessing mental health care is the financial strain. It’s not just about affording the sessions themselves, but also the cost of transportation, time away from work or study, and the emotional toll of navigating a complex system.”
“Accessing mental health care often feels out of reach, not just because of the cost, but also due to long wait times and the challenge of finding the right support that truly understands my needs.”
Julia Coscolluela, a 24 year old from Melbourne, and member of System 2’s Youth Advisory Board, added:
“Our society needs an accessible and affordable mental healthcare system that ensures everyone has the opportunity to prioritise their mental wellbeing, regardless of their financial situation or other barriers. Sadly, for many of my peers, rising costs make mental healthcare a luxury.”
“In a world that feels increasingly uncertain, we’re juggling work, study and other responsibilities, while also dealing with rising living costs and a bleak projected future.”
“When it comes to challenging societal stigma around accessing mental healthcare, young people are at the forefront of driving positive change. If no one can actually afford to look after their mental health, then all the awareness and advocacy work we’re doing goes to waste.”
System 2 is planning further research in early 2025 to understand better the reasons for this sharp rise in out-of-pocket costs and the demographic differences identified, and would welcome input from those working in the sector.
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