Is Therapy Covered by Health Insurance?
Is therapy covered by health insurance? What specifications help a person seek therapy? Use this article to find the answer.
The Importance of Mental Health and Wellness
Although treatment for most mental health conditions is somewhat widely available, it can be very costly. Unfortunately, many people do not have mental health insurance coverage to cover these therapy costs. According to the National Health Interview Survey (NHIS), in 2020, 31.2 million people under the age of sixty-five are uninsured. Thus, they are unable to have access to the quality care they very much need.2
Therapy and Health Insurance
In recent years, there has been an increase in the adoption of therapy as a major part of treating and managing several medical conditions, especially mental health conditions. However, there has been one significant limiting factor to further adoption and, by extension, the success of therapy for improving medical conditions—cost. This has led to what is a very frequently asked question, is therapy covered by insurance?
There is no question that many have been able to enjoy reduced therapy costs with insurance, and there are even several physical and mental health care plans devoted to improving patients’ conditions. Nevertheless, there are still other forms of therapy that are not covered by health insurance. So, it is important for people to know exactly what health insurance is and the kind of treatments it covers.
What Is Health Insurance?
Health insurance, also known as medical insurance, helps provide cost coverage (fully or partially) for medical bills and expenditures. Simply put, health insurance allows people to only pay a certain amount of their medical bills out of pocket (partial coverage) or none at all (full coverage). Note that the type of health insurance determines if people pay fully from their pocket and get reimbursed by their health insurer later or if the insurer settles their medical expenses by communicating directly with their health care provider.
How Health Insurance Works
The average cost of mental health treatment or other forms of medical healthcare as a whole can be very expensive. In fact, a single visit to the doctor may cost hundreds of dollars. This, in essence, defeats the purpose of healthcare; after all, what good is medical treatment if people can’t even afford even the most basic of medical attention in the first place? This is where health insurance comes in. Basically, health insurance providers take on the majority of people’s medical expenses, leaving a much lower cost to pay out of pocket than the initial bill.
Keep in mind that health insurance is not free money. Health insurance works as a partner (via legally binding contracts) with an insurance provider of a person’s choosing. This partnership involves paying a certain premium (more or less a health insurance subscription fee) monthly or quarterly, varying from one provider to the next. After paying the premium, the health insurance provider will then be able to step in when people need assistance meeting their medical bills.
Unfortunately, most insurance providers only cover preventive treatment fully. Other treatment types are settled on a “cost-sharing basis,” where clients will be required to pay a certain percentage of their medical bill (a deductible), and then the insurance company takes care of the rest.
In addition, health insurance providers usually have hospital or health care provider “networks” that they cover, so the only way to save money and avoid paying out of pocket is to seek treatment only through providers in the insurance network. A study from the National Alliance on Mental Illness (NAMI) found that 28% of people had to receive mental health therapy through an out-of-network therapist.3
Is Therapy Covered by Health Insurance?
Is therapy covered by insurance? This is a question that is asked quite frequently and does not have a straightforward answer. The most appropriate answer is—it depends. Usually, health insurance providers have a mental health insurance policy, so people should have access to insurance that covers mental health. The problem, however, usually lies in the type of therapy that the mental health insurance covers.
For example, most mental health insurance providers do not provide therapy insurance coverage for clients who would prefer online therapy despite it usually being cheaper and more accessible. Mental health therapy insurance providers may also not cover relatively new or alternative therapy types, so it’s important to confirm what type of mental health treatment is covered.
Can You See a Therapist on Insurance?
Again, the answer to this question is not a direct yes or no. It largely depends on several factors, such as the therapy insurance coverage type, therapy insurance provider, and the type of therapy people are opting for. Generally, mental health insurance coverage should take care of visits to a therapist, emergency mental care, group therapy, and possibly addiction rehabilitation therapy.
Thankfully, the general mental health coverage takes care of many expensive aspects, allowing clients to seek the care they need without paying costly medical bills in full. Nevertheless, people should always verify with their therapy insurance provider if their health insurance for mental illness will cover therapy visits.
What Kinds of Treatments Are Typically Covered by Insurance?
As mentioned earlier, not all therapy options have mental health insurance coverage, so it is important to know what is commonly covered. If you plan on using insurance for therapy, below are some insurance covered therapy options your insurance for therapy should cover:
- Psychiatric emergency services
- Co-occurring medical and behavioral health conditions
- Talking therapies, including psychotherapy and cognitive behavioral therapy
- Unlimited outpatient sessions
- Telemedicine and online therapy
- Inpatient behavioral health services received in a hospital or rehabilitative setting
- Addiction treatment
- Medical detox services, including medications
How Much Does Therapy Cost?
Therapy for the treatment and management of mental health conditions can be pretty expensive without insurance for therapy. When people go to a therapist not covered by insurance, they may end up spending hundreds or even thousands of dollars, depending on the factors surrounding the therapy option.
Factors That Influence the Cost of Therapy
Therapy rates usually differ depending on several factors, including:
- The type of provider and their qualifications
- The type of therapy
- Insurance policy terms
- The duration of each session
Which Insurance Plans Cover Therapy?
The supplemental mental health insurance plan determines if clients will have access to mental health care at a reduced cost. Here are some insurance therapy options you can leverage to access quality mental health care at a reduced price:
- Employer-sponsored health coverage
- Health insurance purchased under the Affordable Care Act
- Children’s Health Insurance Program (CHIP)
- Medicaid programs
How Do You Know if Your Insurance Covers Therapy?
There are several methods to determine if your health insurance covers therapy. Some of these ways include the following:
- Register and log on to your insurance account online
- Call your insurance provider
- Check with your company’s HR department
- Ask the therapist if they accept your insurance
Again, it is important always to ascertain that your insurance covers the therapy options you are looking to employ before registering for them. Between 2012 and 2017, the Health Care Cost Institute reported that out-of-pocket spending on mental health services grew thirteen times faster than inpatient care.4
When Does Insurance Start for Mental Health Services?
Ideally, insurance for mental health services should kick in as soon as the insurance agreement is concluded and the client has fulfilled all the stated requirements. However, before some providers cover therapy options, they may require their clients to fulfill some conditions. Some of these conditions may include:
After Prior Authorization
For some therapy insurance providers, clients may need to get prior approval before they have access to insurance coverage.
After Meeting a Deductible
Some therapy insurance providers will pause people’s therapy insurance plans until they fulfill an out-of-pocket deductible. This sum may be substantial depending on the plan.
After Spending a Minimum
Some insurance providers may require clients to pay a certain amount of money from the medical bill before they step in to pay for the rest.
Find More About Health Insurance Therapy at Pacific Beach Health
If you are looking for insurance therapy options to use as a cost-saving treatment option for your mental health condition or still have some inquiries about health insurance therapy, Pacific Beach Health is happy to help. Contact us today and get all of the answers you need.