The US spends at least $225 billion on mental illness each year in a broken system with no clear-cut solutions

• Access to affordable mental healthcare in the US remains deeply unequal across socioeconomic lines.
• Depression alone annually costs an estimated $211 billion in lost productivity and medical care.
• Therapists say insurers do not compensate fairly, while new digital care options only cater to users with milder conditions.

More than a year since the coronavirus hit the US, experts have begun to tally the pandemic's effects on our collective mental health.

Symptoms of anxiety and depression, the most commonly diagnosed conditions, increased fourfold among adults compared to those surveyed in 2019, the Kaiser Family Foundation reported in February. Those aged 18 to 24 were twice as likely as adults overall to report more substance use or recent suicidal thoughts.

Since the pandemic began, experts have warned of a "second pandemic" of mental-health conditions. So far, statistics and major surveys have borne this out, but this second-pandemic frame obscures a grim reality: Even before COVID-19, America's mental-health issues have cost billions of dollars in indirect and direct costs. After musculoskeletal disorders, those with mental-health conditions formed the second-largest group receiving government disability benefits.

For people with mental illness who remain in the workforce, mental-health conditions cumulatively add up in the form of absenteeism and lessened productivity. In a 2015 study looking at the financial burden of major depressive disorder, researchers estimated the ICD diagnosis cost $211 billion in medical care, suicide-related costs, and decreased productivity in the workplace. Major depressive disorder is just one billable diagnosis for depression, which means the figure does not reflect depression's overall costs. Among US workers, an estimated 7.6% of people have the diagnosis.

But what these figures fail to account for is the effect of more severe mental-health illnesses, such as bipolar disorder and schizophrenia, on a person's ability to secure long-term employment and housing. In a 2014 study looking at survey trends between illness severity and employment, fewer than half of people with severe mental-health conditions were employed. For those receiving mental healthcare through Medicare or Medicaid, the rate of unemployment is closer to 80%, according to a 2014 report from the National Alliance on Mental Illness.

Accounting for all diagnoses, the US spent $225 billion on mental health in 2019 between private insurers and public Medicaid programs for low-income Americans. Although about two-thirds of Americans have private health insurance, either through employers or state-run marketplaces, the public sector accounts for the majority of America's mental-health spending.

Even without taking the pandemic into consideration, mental-health disabilities have adversely affected the economy and society. Despite changing cultural attitudes, increased public-health advocacy, and new tech-enabled options like remote therapy in the past decade, America's collective mental-health issues have largely not improved.

The US's largely unchanged rates of depression, anxiety, and public spending on severely ill Medicaid patients reflect the ongoing problems with the nation's healthcare system and the largely fee-for-service private-insurance industry.

Mental-healthcare quality varies widely, and insurers largely do not reimburse fairly for therapy

For those who have employer-based insurance that covers mental-healthcare options like medication management and talk therapy, finding care isn't necessarily easy or affordable.

"Probably 70 to 80% of our clients are on insurance," said Natalie Jeung, a therapist at Skylight Counseling, a private mental-health treatment center in Chicago. At Skylight, most clients are on Blue Cross Blue Shield, with some paying a copay between $15 and $30 and others maxing out an overall deductible.

"That's actually a really huge issue for a lot of therapists in the beginning of the year," Jeung added. At the start of the year, when many patients' insurance deductibles are reset to zero, patients often temporarily stop seeing their therapists rather than pay out of pocket for care. Skylight charges upwards of $120 for a weekly session, or more if a therapist has more experience.

The remaining 30% of Skylight clients typically pay out of pocket. The onus is on the client to chase reimbursement from their respective insurance company. In general, Jeung said most private therapists forgo insurance altogether, since major companies don't reimburse "at a reasonable rate."

"This directly impacts a therapist's ability to earn a livable wage, and is why there's burnout at community health centers," Jeung said. "They're not getting paid enough."

Lack of sufficient reimbursement from insurance companies is precisely why psychologist Karol Darsa largely doesn't accept insurance at her Los Angeles outpatient clinic, Reconnect Integrative Trauma Treatment Center. Unlike most therapists who see clients only once a week, Darsa's clinic offers intensive outpatient care for people with severe mental illness. That level of care, which includes 25 hours of therapy weekly, costs $6,200, though Reconnect also offers less intensive programs at a lower cost, as well as hour-long sessions.

"To keep the quality of care I need to go with what is right," Darsa said. Some clients' private insurers reimburse from out-of-network benefits, but most insurers provide guaranteed reimbursement for only seven days of treatment at a time, whereas Reconnect's programs typically last at least two weeks.

Teletherapy startups like Talkspace want to 'democratize access' to mental healthcare, but essentially restrict treatment to those with milder conditions

Against this collective backdrop of unequal socioeconomic access and byzantine barriers, VCs poured $417 million into mental-health startups in 2020, hoping to provide digital solutions through teletherapy and other app-based approaches to mental health. Among them is teletherapy app Talkspace, which announced plans to go public via SPAC in January.

Started in 2012 with a mission to "democratize access" to therapy, Talkspace as of January had 46,000 users, including those who receive access to the app through their employers, health plan, or local government. But Talkspace's founders told Insider in January it focused on treating those with milder conditions and life crises.

"We tend to limit ourselves to those with lower acuity," a Talkspace representative said when asked if the company's remote therapists had experience with treating severe mental illnesses.

Talkspace defined "lower acuity" as patients capable of managing life on their own without consistent medical intervention, including going to work and taking care of family.

Adrian Aguilera, the director of UC Berkeley's Digital Health Equity and Access Lab, said there were no easy choices in the bifurcated and screwed-up mental-health system.

Direct-to-consumer therapy apps aren't the only way to solve the US's mental-health issues, but they're part of a broader solution.

"We currently do not have the ability to meet the need for mental health off one-to-one therapy alone," Aguilera said. "If we tried to help everybody, we could just not do that, right?"