Working with Your Insurance

There are advantages and disadvantages to using health insurance for psychotherapy. This section is designed to help you make the best decision for your needs. The biggest advantage of using health insurance is obvious – once your deductible is met, you pay less out-of-pocket for sessions in the form of a co-pay. However, in today’s world of increasing healthcare costs, monthly premiums and annual deductibles are rising at an alarming rate. This means that the potential cost savings to you take longer to appear or might not appear at all if you have a very high annual deductible. Consider these other disadvantages to using health insurance for therapy:

1. Limited Provider Choices: If you have an HMO plan or want to use the in-network benefits for a PPO, you have to choose a provider that is part of their network. This means that a corporation dictates your choices and limits your freedom to choose a provider that can be the best match for your needs. Many of the best therapists do not participate in insurance panels because of the very low rates of reimbursement for providers.

2. Limited Sessions: Insurance companies can limit the number of sessions you are allowed. Plans often require a short-term treatment approach designed to resolve specific problems that are interfering with your usual level of functioning. While quite a lot can be accomplished in short-term therapy, many people are not comfortable with session limits, especially if additional issues come up during the course of treatment that require extra work. Many patients who want to continue with therapy after insurance benefits expire cannot obtain authorization for additional sessions.

3. Questionable Confidentiality: Most insurance agreements require you to authorize your therapist to provide them with a clinical diagnosis, and occasionally additional clinical information about you, such as a treatment plan or summary, or in rare cases, a copy of the entire record. This information will become part of the insurance company files, and, in all probability, some of it will be made part of an electronic data bank or shared with a national medical information data bank. All insurance companies claim to keep such information confidential (and legally have to because of HIPAA), but once it is in their hands, your therapist has no control over what they do with it. In addition, staff members who view and process this information rarely have training in mental health issues.

Using insurance benefits for therapy is a choice. If you do decide to use your health insurance for psychotherapy treatment, this list of steps will help you research your coverage. You should always know exactly what your insurance coverage is before you begin treatment. Keep in mind that these are general suggestions and each health plan may require additional steps that are not included on this list.

First you have to determine if you actually have coverage for mental health services. You can either call the main number for your health insurance company or contact your human resources and benefits department and ask if mental health benefits are part of your plan. Most of the time, mental health coverage is outsourced to a vendor that specializes in mental health services. Your insurance company should be able to provide you with the phone number to access your mental health benefits.

Next step is to call the mental health benefits phone number and ask about the type and amount of coverage you have. Ask the representative the following questions:

1. What is the in-network deductible? Has it been met this year?
2. Do I have out-of-network benefits?

• Most HMO plans do not have benefits for out-of-network providers. Subscribers to PPO plans can sometimes choose either an in-network or out-of-network provider.

3. What is the out-of-network deductible (if applicable)? Has it been met this year?
4. What is the coverage amount per therapy session for in-network providers and out-of-network providers (if applicable)?

• Most of the time a percentage of the total session fee is covered and you are responsible for the remainder, also known as a co-pay. Insurance companies may base your coverage upon a clinical diagnosis, plan type, service received (such as individual vs. couples therapy), or other restriction. Thus, if you are planning to submit your receipts for insurance reimbursement, ask your carrier about the specific terms of coverage.

5. Do I need approval or a referral from a primary care physician for services or can I call a therapist directly to set up an appointment?

• If you have an HMO, many times a referral from your primary care doctor is required.

6. How many sessions per calendar year does my plan cover?

• Some plans offer unlimited sessions and some plans have strict session limits. It’s important to find this out so you don’t encounter any surprises when you begin treatment.

Although not considered health insurance, an FSA or HSA can help offset the cost of psychotherapy by allowing you to use pre-tax wages to pay for healthcare expenses. Not all health expenses are eligible, but according to the IRS, psychotherapy is a reimbursable health expense. Therefore, you can submit a “superbill” from your therapist or the Explanation of Benefits (EOB) from your insurance company for reimbursement from your FSA or HSA.