Insurers should be prepared for a significant increase in the multitude of mental health claims triggered by the COVID-19 pandemic in the next few years.
The Australian Institute of Health and Welfare reported that Australians used almost 7.2 million Medicare-subsidized mental health services from 16 March to 27 September 2020 and that major mental health support services, including Lifeline, Beyond Blue and the Kids Helpline, experienced a significant increase in demand.
Much of this increase in demand has been attributed to psychological challenges posed by prolonged lock-in periods in the early days of Australia’s COVID-19. Even for those with a healthy mindset, the combination of fear of the virus, loss of social contact, concerns about job stability, increased responsibility for care, and constant changes in health messages has yielded the expected increase in primary mental health cases. For those with pre-existing mental health conditions, he fears the consequences could be devastating, including the possibility of primary conditions becoming chronic and the occurrence of secondary conditions.
Given that reporting mental health claims usually takes longer than other claims, it may take some time before insurers see the actual effect of the mental health consequences on COVID-19, but most COVID-related mental health claims are expected to 19 be permanent disability claims and disability insurance claims, both from existing claimants and from other insured persons. Workers’ compensation is the second area of projected harm increase, and Safe Work Australia reports that of the 533 COVID-19-related worker compensation claims received on 31 July 2020, 179 related to COVID-19-related mental health impacts.
What about now? The vaccine is slowly being distributed to the Australian public, cases are rare, and when cities are locked up after a case is discovered, it only takes a few days. So should we continue to worry about the impacts of COVID-19 on the healthy mentality of Australians? Should we still expect a significant increase in mental health requirements?
In short, yes.
Although Australians now enjoy a much greater sense of normalcy than they did 6 to 12 months ago, many have been experiencing financial pressure for almost a year, long praised as a major cause of prolonged anxiety and depression, and as time goes on, the challenges these people face they face more reduced government funding.
Further, the last 12 months have taught us that COVID-19 has a habit of throwing balls in a corner when we least expect it, and as far as we know, another attack or mutant strain could be just around the corner, throwing Australians into further periods of isolation and stopping our an economy that is recovering once more. The possibility of just this is the real cause of stress and anxiety in the general public.
Finally, the actual impact of COVID-19 on mental health claims remains to be seen, but insurers should certainly be prepared for a significant increase in claims. The Financial Services Commission reported that insurers paid $ 1.47 billion for mental health claims in the previous financial year. It seems very unlikely that this figure will fall in the next reporting period.