State-Level Costs of Mental Health & Substance Use Disorders
Problem
The economic burden of mental health and substance use disorders in rural communities remains unexplored.
Mental health and substance use disorders carry costs far beyond medical treatment—they are associated with absenteeism, reduced earnings, and lower tax revenues. Yet these indirect economic costs have not been systematically measured in rural America, where health care worker shortages, hospital closures, and limited access to behavioral health services leave many residents without treatment options.
Solution
NORC analyzed publicly available data to capture both direct medical spending and indirect productivity losses of mental health and substance use disorders at national and state levels.
Using the Medical Expenditure Panel Survey—a large, nationally representative dataset from the Agency for Healthcare Research and Quality—NORC calculated direct medical costs associated with mental health and substance use disorders alongside indirect costs: productivity losses from absenteeism among employed individuals, and estimated wages and tax revenue losses associated with unemployment among individuals with mental health and substance use disorders.
The national estimates served as a benchmark for state-level analyses in select heartland states, allowing policymakers to see how their communities, including rural communities, compare to national patterns. This dual-level approach helps demonstrate both the scale of the challenge and its local dimensions.
Result
Our analysis revealed billions in economic losses and identified where expanded services could yield the greatest returns.
Our analysis showed that an estimated 48.1 million people, 14.6 percent of the U.S. population, experienced a mental health or substance use disorder in 2023. Across the nation, these disorders were associated with an estimated cost of $107.3 billion annually: $59.5 billion in direct medical spending and $47.7 billion in indirect costs from lost productivity, unemployment, and foregone tax revenue.
In select heartland states, including Arkansas, Illinois, Indiana, Kansas, Missouri, Oklahoma, and Tennessee, mental health and substance use disorders were associated with an estimated cost of nearly $11.2 billion annually, including $8.6 billion on direct medical care costs and $2.6 billion on indirect costs related to unemployment and lost tax revenue. Total and per-capita burden varies substantially across states, reflecting differences in labor markets, health care capacity, and access conditions. Both nationally and in the heartland, anxiety disorders and depressive episodes account for the largest share of medical spending and productivity losses.
Unmet treatment needs can lead to increased use of expensive emergency care and workforce exit. Our findings support an economic case for expanding mental health coverage, growing the behavioral health workforce, and investing in telehealth—particularly in rural areas where these services remain scarce.
Contact
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Project Leads
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Alexandra F. Kritikos
Senior Research Scientist & Health EconomistProject Manager -
MacKenzie L. Hughes
Senior Research ScientistReport Lead -
Meg Hefferon
Research ScientistAnalytic Lead -
Devi Chelluri
Senior StatisticianAnalytic Support
"Behind every statistic is a person whose life, family, and economic stability are shaped by mental health and substance use disorders. Quantifying the economic impacts helps make visible the real human costs, and underscores why sustained, evidence-based investments in care are essential for healthy, thriving communities."
