Insomnia is considered a psychophysiological problem.
That means that it can affect you psychologically and it can affect you physically. In some people, it can affect them more physically and they don’t see the psychological symptoms of stress and anxiety and feeling low and emotional.
Other people will feel all those things and they won’t get so many of the physical side effects and some people feel both.
So the answer is yes.
It could be considered a mental health issue but it could also be considered a very physical issue.