Alberta Blue Cross' benefits report shows psychology spending surging, but the insurer warns richer plan designs alone won't fix the mental health gap
Recent findings from Alberta Blue Cross’ benefits report found psychology spending across Alberta Blue Cross' book of business is up nearly 35 per cent, with cost per user rising 13 per cent in three years.
Margaret Wurzer, director of benefits design and strategy at Alberta Blue Cross, noted the insurer's latest benefits report was built to give plan sponsors a basis for comparison as well as a look at what's coming next. She emphasized how mental health numbers should be top of mind.
"We saw how high the mental health claiming is on the disability side of things because disability is such an expensive benefit," she said. “Mental health support really should be a top priority for plan sponsors because those could really translate into some fairly substantial increases in terms of absenteeism as well as disability," she said.
What’s causing psychology spending in benefits
According to Wurzer, the growth in psychology spending isn't being driven by heavier individual use as more plan members are accessing the benefit for the first time. Additionally, the average number of sessions per claimant hasn't moved because it's held at about five visits across the insurer's book. Rather, what has moved is cost.
Over the past three years, she noted how the average cost per session has increased about 9 per cent while the annual cost per user, though, has climbed 13 per cent - a 4 per cent gap that Wurzer attributes entirely to plan design decisions.
"We are seeing higher amounts paid for the sessions," Wurzer said. She attributed this to both rising provider fees and employers expanding their psychology maximums, so each session draws more coverage.
"We've got richer plan designs now. Employers are paying more under the psychology benefit," she said, underscoring employers are spending more by choice, but without a broader strategy that spending may not translate into better outcomes.
How mental health support works as a three-layer system
To that end, Wurzer frames effective mental health support as a three-layer system, and says most employers still have gaps in at least one of them.
The first layer is early intervention, making sure employees can access psychology and medication coverage at the onset of an issue, before it progresses to something more severe or leads to an absence. Notably, across the book of business at the insurer, fewer people are relying on medication alone, and more are using psychology on its own or in combination with drugs, said Wurzer.
That shift toward psychology-first treatment aligns with clinical guidelines recommending psychology as the indicated treatment for mild anxiety and depression. Wurzer highlighted page 26 of the report, which outlines the treatment mix, consistently draws the most attention from plan sponsors when the insurer walks them through their data.
The second layer is short- and long-term disability coverage. When early intervention isn't enough and an employee's condition worsens, disability programs provide the case management infrastructure to navigate people toward the right treatment, identify return-to-work accommodations, and prevent prolonged absences. Meanwhile, she believes some employers still don't offer disability programs at all.
The third layer, and the one Wurzer says represents the biggest area of untapped potential, is proactive workplace well-being. Rather than waiting to respond once someone is already unwell, employers could be building workplace supports that prevent mental health issues from escalating in the first place. Despite most employers having the reactive infrastructure in place, fewer have made the shift toward prevention.
Why clinical counselors remain a regulatory gamble for plan sponsors
One such lever could be broadening provider eligibility to include clinical counselors. While it might look like a cost lever for plan sponsors, in Alberta at least, the regulatory picture makes it a gamble, Wurzer suggests. She noted how psychologists and social workers are both regulated in the province, but clinical counselors have yet to be.
Despite a bill being passed in 2024, the Alberta College of Psychologists is still working through the process of determining what credentials a clinical counselor will need to qualify as a regulated provider. Until those entry requirements are set, the insurer is holding off on adding clinical counselors to its standard plans.
"It's really a bit of a waiting game in Alberta right now but we've been telling plan sponsors that there is a risk if you cover counselors on your plan. Depending on what the college decides, some of the counselors that you're currently covering may not end up being regulated in the future," she said. "We don't know at this time what the college is going to require in terms of the qualifications of a counselor in order for them to continue to be regulated the province."
According to Wurzer, Alberta Blue Cross' psychology benefit already bundles psychologists, social workers, and in some cases counselors under one umbrella. Psychologists account for the largest share of utilization under that combined benefit, and Wurzer says the reason is clinical.
"Psychologists have the ability to diagnose and develop a treatment plan for mental health conditions," she said. "That's where there's a little bit of a difference with their credentialing."
When a mental health issue requires a formal diagnosis and a structured treatment plan, plan members are gravitating toward the provider type equipped to deliver both.
Report helps plan sponsors tackle core question
According to Wurzer, the report was designed to answer a question Alberta Blue Cross hears constantly from plan sponsors: how do their plans stack up? The insurer built it as a benchmarking tool, giving employers a way to measure their own spending and growth patterns in drugs, dental, and other benefit lines against the broader book of business.
But the report was also meant to break from the usual industry approach. Where most trend reports look backward, Alberta Blue Cross deliberately included forward-looking sections across each line of benefit.
"We wanted to not just paint the picture of what's happened in the past but to also give some insight into what could be coming in the future," Wurzer said. "We tried to come up with some practical solutions on how a plan sponsor can look at balancing sustainability with the need to address member needs throughout the report," she said.
