Insurers should be prepared for a significant increase in the multitude of mental health claims triggered by the COVID-19 pandemic over the next few years.
The Australian Institute of Health and Welfare reported that between 16 March and 27 September 2020, Australians used almost 7.2 million Medicare-subsidized mental health services and that major mental health services in crisis, including Lifeline, Beyond Blue and Kids Helpline, experienced a significant increase in demand.
Much of this increase in demand has been attributed to psychological challenges posed by longer locking periods in the early days of COVID-19 in Australia. 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 brought the expected increase in primary cases of mental health. 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 applicants 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 captured after a case is discovered, it’s only a few days or so. So should we still worry about the effects 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 compared to 6 to 12 months ago, many have been experiencing financial pressure for almost a year, long praised as a major cause of long-term anxiety and depression, and as time goes on, the challenges these people face are increasingly more often they encounter reduced government funding.
Furthermore, the last 12 months have taught us that COVID-19 has a habit of throwing balls out of the curve 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 again stopped our recovering economy. The possibility of just this is a 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 fiscal year. It seems very unlikely that this figure will decrease in the next reporting period.