Insurance & Therapy: What You Need to Know
Buckle up, because this one is all about insurance:
Learn the language of insurance benefits, how to find out about your mental health coverage, pros & cons of insurance vs. private-pay, and more.
Health Insurance 101: The terms you need to know
Trying to make sense of insurance policies, terms, and benefits can be overwhelming. The policies themselves aren't exactly written by folks who are trying to make them easy to understand. If it wasn't already clear by the swarms of run-on sentences swimming in commas throughout your policy paperwork, health insurance policies are legal documents, written by people who are very skilled in the use of legal language (i.e., not most people). While the goal of this legal jargon is actually to make policies clearer in a legal sense, the effect is usually the exact opposite for everyday consumers.
When it comes down to the essentials of what you need to know about your insurance and mental health, it can be helpful to focus on a few key terms:
The monthly amount you pay for insurance coverage (sometimes this is billed annually in a lump sum). Think of this like your "electrical bill" for health insurance - you pay it each month like a subscription for the service.
A co-pay is the dollar amount (usually a flat fee) that you must pay per medical visit (typically for in-network services). Your insurance company will pay your provider a portion of the remaining balance for the visit cost. For example, for a $150 medical visit, you may have a $10 co-pay, and then your insurance may pay your provider an additional $120 for their services.
Co-insurance is similar to a co-pay, but instead of a flat rate, co-insurance rates are determined by percentage. For example, you may have a co-insurance rate of 20% for in-network services, meaning that if the cost of an in-network medical visit is $100, you owe 20% of $100, or $20. IMPORTANT: Co-insurance payments may apply to services you need even after you meet your deductible. Yeah. Bummer.
The amount of money you are required to pay in a year before your insurance company will start helping with expenses.
Most plans have different deductibles for in-network and out-of-network services. This can make understanding what to expect in insurance expense coverage more complicated. For example: If you have a $1000 in-network deductible for 2019, and you spend $1000 on in-network doctor's visits by the end of March 2019, then from April-December 2019 (or the end of your policy term), you should have no further out-of-pocket costs for in-network services. BUT, if you start seeing an out-of-network doctor in April, you will have to meet your out-of-network deductible before your insurance company will pay for their services.
In-network: An in-network healthcare provider (like a doctor or therapist) has agreed to a contract with an insurance company where the provider will serve customers of the insurance company at a reduced rate (that's right -- in-network providers take a hit to help clients access services more easily. According to some data, contracted rates for therapy services from some insurance companies haven't increased in the last 10 to 20 years.). On the consumer end, this lowers out-of-pocket costs for medical visits for clients and patients.
Out-of-network: An out-of-network provider is not under contract with an insurance company. Typically, this means that clients and patients are required to cover the full fee for services up front. However, consumers can often be partially reimbursed for many out-of-pocket services by requesting that their healthcare provider share a "Superbill" with their insurance company. A Superbill outlines all the clinical info needed for an insurance company to pay clients back a portion of their out-of-pocket costs, so long as they've met any outstanding out-of-network deductible for the year.
The process of confirming a client's insurance coverage. This takes place before a client participates in any services so that clients can know for sure what to expect in terms of out-of-pocket costs and whether their insurance can be used. Your provider may ask for your demographic and insurance information before your first appointment to make sure you're both on the same page about financial details.
Some services require "pre-authorization" (a.k.a. "precertification," "prior approval," "prior authorization") from your insurance company before they're eligible for coverage. This means that an insurance company has determined that the services being provided are "medically necessary." IMPORTANT: pre-authorization doesn't guarantee that your insurance company will cover services. Confusing, we know.
Now that you know some of the key jargon of Insurance-ish, let's look at how to find out what your specific coverage for therapy services entails...
How To Find Your Mental Health Benefits
We've created a handy guide to help you figure out what your insurance coverage includes when it comes to counseling and therapy services.
If you're wondering whether your insurance should cover mental health, look no further than the 2008 Mental Health Parity Law - which required that mental health benefits be treated similarly to physical health benefits by insurance companies across the country. However, the law doesn't require that insurance plans cover mental health - only that if they're covered, they're treated no differently than physical health benefits (in terms of things like co-pays and deductibles).
To find out what your plan covers, you can:
Consult your policy documentation (sometimes can be found online, if you can log into a customer account through your insurance company's website)
Call the customer service line of your insurance company (usually listed on the back of your insurance card)
If your health insurance plan is provided by your employer, you can speak with the benefits manager or HR department staff to learn more about your coverage
Visit our Rates & Insurance Page to view some additional questions to consider when discussing benefits with your insurance company or plan manager.
Using Insurance vs. Private-Pay: Pros & Cons
So now that we've covered insurance terminology and how to find out about your available coverage, what should you consider when deciding whether or not using your health insurance to cover therapy services is right for you?
Pros of Using Insurance for Therapy:
Lower out-of-pocket costs: If your insurance offers mental health benefits, it's likely your out-of-pocket expenses will be lower up front, as you'll only be responsible for a co-pay or co-insurance (unless you have an outstanding deductible that must be met). This doesn't include your monthly premium expense, which is technically part of the cost of using insurance, too.
Payments go toward your deductible: If you do have an outstanding deductible (whether in-network or out-of-network), in using your insurance for services, the amount you pay out of pocket will likely go toward reducing that deductible balance for the year.
Cons of Using Your Insurance for Mental Health Services:
Diagnosis is required, annnd... complicated: Most insurance plans require you to have a diagnosis of a disorder in order to be eligible for coverage. Why does this matter, you might wonder? For one, this can lead to clinically inaccurate or "fudged" diagnoses being given to clients in order to streamline the paperwork and claims process. So what, you say? Well, that diagnosis is now part of your permanent health record, which can have implications for anything from future job prospects (like government service) to limits of coverage due to "pre-existing conditions" if you change insurance companies down the road. These implications are true whether your diagnosis is fudged or not. Furthermore, some insurance companies will not provide coverage for certain types of diagnoses -- this depends on which mental health concerns an insurance company decides require "medically necessary" intervention (i.e., therapy). For example: Are you wrestling with chronic anxiety? Okay, insurance will probably cover that. Is you marriage on the rocks even though you and your partner don't have underlying mental health concerns? Good luck getting coverage.
Personal information exposed: Confidentiality is in many ways the cornerstone of therapeutic work. When insurance becomes involved in mental health care, it exposes private and sensitive data to multiple other people and organizations beyond you and your therapist. Granted, with HIPAA and the giant gears of the healthcare industry in place, breaches are fairly rare, but with every new set of hands or screens that has access to clients' information, the risk increases.
Restrictions on services: So you've found a counselor, verified your coverage, and had a few sessions -- way to go! Until you have to stop. Because insurance says so. Insurance companies can impose limitations on the number of sessions that will be covered in a given time span, how frequently you can participate in therapy, or even the types of therapy you can participate in. Knowing ahead of time how many sessions and what types of sessions your insurance will cover will help you avoid unpleasant billing surprises.
Cons of Paying for Counseling Privately:
Higher up-front fees (at first): Private-paying clients are responsible for paying the full service fee at the time of their appointment. However, many clients are able to take advantage of out-of-network benefits, meaning their insurance company will reimburse them for a portion of therapy costs once their deductible is met. Filing for this reimbursement involves the creation of a Superbill (mentioned above), which we provide and file for clients upon request at Salem Counseling Center. We also work with Better (look under "Insurance" section) as another option for out-of-network reimbursement.
Payments not applied to out-of-network deductibles: As mentioned earlier, when using insurance, payments made toward services can be applied to a deductible. If not planning to use insurance, clients' out-of-pocket expenses may not be applied to any outstanding deductible amount for the year.
Pros of Paying for Therapy Out-of-Pocket:
Fewer risks to confidentiality: Fewer ears and eyeballs on client data means fewer risks to confidentiality breaches. Even we can do the math on this one.
More freedom & options in choosing providers: There are many excellent clinicians out there who take a "39-foot-pole" approach to their relationship with insurance companies, and for good reasons. When clients consider working with clinicians who are outside their insurance network, they may have access to a broader range of therapists with more expertise or specialized experience.
Diagnosis is based on appropriate clinical care, NOT red tape: In many ways, this particular Pro sums up a big chunk of the insurance dilemma: your insurance company should not be the thing deciding the outcomes and nature of your healthcare -- you and your healthcare provider should. This is especially true for mental health. When clients pay for services privately, they eliminate the complicating influence that insurance companies can have on the therapeutic process. Furthermore, paying for services privately means that clients may or may not pursue a diagnosis of any sort, but that clients and their counselors can choose to work toward identifying the most accurate and clinically appropriate diagnosis without insurance breathing down their neck. Another way to look at this: diagnosis is not always necessary (or helpful) to everyone in getting good therapy, but it is always necessary in trying to get insurance to pay for it.
No limitations on time in therapy or service types: Similar to the previous thought, counseling is a different kind of service, compared with your average doctor's visit or dental tune-up. Counseling can involve many different types of approaches, techniques, varying lengths of time, and above all, a certain kind of relationship. When paying privately, you get to decide how often you see your therapist, which therapist you see, and the type of work you do -- all without the restrictions that insurance companies might impose.
Our take on Insurance & Therapy
Overall, insurance can be a helpful way for clients to reduce their initial out of pocket costs for therapy, and can make it easier (sometimes) to get connected to counseling services. Insurance can also put limitations on the types and amount of therapy clients are allowed, create additional potential confidentiality risks, and make it more likely that clients are "diagnosed" with disorders based on paperwork requirements rather than clinical necessity. As the above information outlines, it's a complex conversation that must be considered by each person when deciding what's right for them.
At Salem Counseling Center, we're currently in-network with Aetna, Carolina Behavioral Health Alliance, Medcost and BCBSNC. Our contracts with these insurance companies help us help clients in these networks get access to services faster and more affordably. We also provide Out-of-Network Billing services for clients who opt to pay out of pocket, or who have coverage through other insurance companies. Whether you plan to use your insurance in your work with us, or plan to pay privately, we handle as much of the paperwork side of things as we can, so that your only job is to focus on your counseling goals. Our Rates & Insurance and Frequently Asked Questions pages of our website address these things further.