The United States spent $126.5 billion on mental health treatment in 2021, the most recent year with comprehensive national data. That figure has grown dramatically over the past two decades, up from roughly $37 billion in 2000 as part of a broader trend in which combined mental health and substance use disorder spending more than tripled.
Total Spending and How It Breaks Down
National spending on mental health and substance use disorder treatment together reached $139.6 billion in 2021, according to an analysis published in Health Affairs. Mental health services accounted for the vast majority of that total: 90.6 percent, or $126.5 billion. Substance use disorder treatment made up the remaining 9.4 percent ($13.1 billion), with drug use disorders drawing about 26 percent more spending than alcohol use disorders ($7.3 billion versus $5.8 billion).
The growth has been steep. In 2000, combined mental health and substance use disorder spending totaled just $40.9 billion. Researchers attribute the increase primarily to case growth, meaning more people receiving treatment, rather than rising prices alone.
Where the Money Goes
The way mental health care is delivered has shifted significantly in the past decade, and spending patterns reflect that. Outpatient services now account for about two-thirds of total mental health spending, up from just over half in 2013. This includes therapy visits, psychiatry appointments, and telehealth sessions.
Prescription drug spending, meanwhile, has fallen as a share of the total. Medications dropped from 34 percent of mental health spending in 2013 to 23 percent by 2020, largely because commonly prescribed drugs became available in cheaper generic versions. Inpatient hospital stays, while expensive per episode, remained rare at about 0.3 percent of service use in both 2013 and 2020.
Who Pays for Mental Health Care
Medicaid is the single largest payer for mental health services in the country, covering an estimated 25 percent of all mental health spending and 21 percent of substance use disorder treatment costs. Along with the Children’s Health Insurance Program (CHIP), Medicaid serves as the financial backbone for behavioral health care, particularly for low-income adults and children who might otherwise go without treatment.
Private insurance, Medicare, and other public programs cover the rest, though exact shares shift year to year. The practical reality is that no single payer dominates the landscape. Mental health funding is spread across federal programs, state budgets, employer-sponsored plans, and individual spending in a way that makes the system both broad and fragmented.
What Patients Pay Out of Pocket
Even with insurance, mental health care costs patients more than other types of care. People with private insurance who were treated for depression or anxiety in 2021 spent an average of $1,501 out of pocket annually, nearly twice the $863 average for enrollees without a mental health diagnosis. That gap reflects both the frequency of visits that therapy-based treatment requires and the higher cost-sharing rates applied to mental health services.
The numbers tell a clear story about uneven coverage. Privately insured patients paid about 20 percent of their outpatient mental health costs out of pocket, with insurance covering the other 80 percent. For non-mental health outpatient services, those same patients paid only 13 percent out of pocket, with plans covering 87 percent. That seven-percentage-point difference adds up quickly when someone is seeing a therapist weekly or managing a condition that requires ongoing care. Despite federal parity laws that are supposed to make mental health coverage equal to medical coverage, the gap in what patients actually pay persists.
Why Spending Keeps Growing
The rise in mental health spending is driven primarily by more people seeking treatment, not just by rising prices. Awareness of mental health conditions has increased, stigma has decreased (particularly among younger adults), and access has expanded through telehealth and insurance reforms under the Affordable Care Act. Medicaid expansion in many states brought millions of previously uninsured adults into coverage that includes behavioral health benefits.
At the same time, demand continues to outpace supply. Shortages of psychiatrists, therapists, and other mental health professionals remain a persistent issue, particularly in rural areas. The result is a system that spends more each year but still leaves significant gaps in access, with many people unable to find a provider, afford their share of the cost, or get timely appointments even when they have coverage.