This longitudinal study aimed to compare levels of anxiety and depression between hospitalized patients with COVID-19 and those hospitalized for other conditions in Mongolia. Utilizing a mixed-methods design, 552 patients were assessed, including 339 with COVID-19 and 153 with non-COVID-19 conditions. Mental health was evaluated using the Patient Health Questionnaire-9 (PHQ-9) for depression and the Generalized Anxiety Disorder 7-item scale (GAD-7) for anxiety. Results indicated that 58.4% of the COVID-19 group and 47.7% of the non-COVID-19 group exhibited signs of depression, while 48.9% and 35.9%, respectively, met criteria for anxiety, with significant differences (p=0.024 and p=0.006). Follow-up assessments at three- and twelve-months post-discharge showed higher rates of depression (57.3% at three months) and anxiety (46.9% at three months) in the COVID-19 group compared to their counterparts. Multivariable logistic regression analysis revealed that the COVID-19 group had a 1.5-fold increased risk of depression and a 1.7-fold increased risk of anxiety, even after adjusting for age, sex, marital status, employment, and household conditions. The findings confirm that COVID-19 significantly increases depression and anxiety among hospitalized patients. Notably, both short-term and long-term follow-ups revealed that depression and anxiety were highly prevalent in the COVID-19 group.