With mental health and cost of living identified by young Australians as two of the four biggest issues they face, political parties have made major election promises to improve access to mental health services. While extra investment has been widely welcomed, is it enough to tackle the growing youth mental health crisis?
- Newly released data from System 2 shows average out-of-pocket (OOP) costs have soared by nearly 5 times the rate of inflation over the last 3 years, reaching over $68 per service, and for the first time, exceeding $100 to see a psychiatrist.
- Our new report, ‘A fresh approach to improving access to quality mental health services for young Australians,‘ identifies a complex range of barriers beyond cost that are preventing young people from accessing the services they need, and that urgently need tackling:
Psychological barriers that make it hard to ask for help, including poor mental health literacy, social stigma and distrust of therapists.
Structural barriers that make it hard to get the help young people ask for, such as cost, workforce shortages, long wait times and prohibitive travel requirements.
- The report proposes systemic solutions, including illuminating funding flows and structures, and that social media platforms be forced to remove dark patterns that exploit people’s cognitive biases in ways that are not in their best interest.
John Craven, Chief Executive at System 2, commented:
“Soaring out-of-pocket costs means that many young people cannot afford to access the mental health support they urgently need.
In addition to greater Medicare-subsidies and investment to build capacity in the system, we need a greater understanding of how to overcome other barriers to access.
To tackle this health emergency, we must also better regulate social media platforms, forcing them to remove dark patterns that are linked to mental health problems.”
Rising costs driving generational inequality
Our analysis shows 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 Welfare1, the report shows that:
- In the last three years, young people accessing Medicare-subsidised non-inpatient mental health services have seen a 79% increase in out-of-pocket (OOP) costs.
Those aged 15-24 years old paid an average of $68.02 per service in 2023-24, compared to $37.91 in 2020-21.
- These out-of-pocket costs have risen at 4.9 times the rate of Consumer Price inflation2 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, double that of 65-79 year olds, and triple that of those aged 80 or over. 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 (<11% from 2020-21 to 2023-24) had been much smaller than the increase in the average provider fees charged (26%), resulting in this large increase in OOP costs (75% across all age groups).
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 $103.19 for a Medicare subsidised non-inpatient appointment with a psychiatrist, $70.02 for a clinical psychologist, and $76.50 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.”
References:
(1) The System 2 report uses data from the Australian Institute of Health and Welfare – Medicare-subsidised GP, allied health and specialist health care across local areas, for the periods 2020-21, 2021-22, 2022-23 and 2023-24. Accessed via: https://www.aihw.gov.au/reports-data
(2) This calculation is based on published ABS inflation data showing that the Consumer Price Index increased 3.5% in the year to December 2021, 7.8% in the year to December 2022, and 4.1% in the year to December 2023, equivalent to a 16.1% increase over the three years. December data is used as it represents the midpoint of the year for which mental health care cost data is collected. Accessed: https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia/latest-release