If you’re thinking about going to therapy for your mental health, you may be wondering if insurance will cover the cost. While there are federal and state laws made to help you get accessible mental health treatment, some insurances might deny claims if they don’t believe the treatment was medically necessary.
Below you’ll find more on what’s covered under law, and how to appeal your health insurance’s decision.
Which Therapy Is Covered by Insurance?
You may be seeking mental health treatment on your own, or have been referred by a doctor. Yet, the biggest barrier to getting help may be the cost. The average cost of one session can range from $100 to $200. However, this may change based on the insurance, location, and experience level of your therapist.
According to the CDC, a quarter of U.S. adults have a mental illness during any given time. Additionally, half of U.S. adults will have a mental illness at some point in their life. Because of this, there’s been a push in federal programs to make therapy and mental health services more accessible.
Many people need therapy for their mental illness. However, health insurance has a big impact on whether or not you’re likely to get treatment. Studies show that 72% of adults with mental illness have at least one barrier to treatment, like cost or lack of needed health insurance.
In 2008, a mental health parity law was passed that requires health insurance companies to cover mental health, behavioral health, and substance use disorder services. This law is meant to keep your health insurance from charging you a higher copay for office visits to your therapist than they would for an average checkup at your doctor’s office.
Another benefit to it was removing annual limits on how many therapy visits would be covered. One limitation to this law, however, is that your health insurance company gets to determine what mental health treatment is a medical necessity.
Which Plans Cover Therapy
Whether you have insurance or are looking for insurance, below are the types of health insurance that are affected by the parity law.
Do you have Insurance Questions about Mental Health or Addiction Services?
Help is available, if you have:
- Been denied coverage
- Reached a limit on your plan (such as copayments, deductibles, yearly visits, etc.)
- Have an overly large copay or deductible
You may be protected by Mental Health and Substance Use Disorder Coverage Parity laws require most health plans to apply similar rules to mental health benefits as they do for medical/surgical benefits. Select your insurance type below for more about the protections that apply for you, and to get assistance information. There are Federal and State Agencies who can provide assistance.
Q: Does the Affordable Care Act require insurance plans to cover mental health benefits?
Answer: As of 2014, most individual and small group health insurance plans, including plans sold on the Marketplace are required to cover mental health and substance use disorder services. Medicaid Alternative Benefit Plans also must cover mental health and substance use disorder services. These plans must have coverage of essential health benefits, which include 10 categories of benefits as defined under the health care law. One of those categories is mental health and substance use disorder services. Another is rehabilitative and habilitative services. Additionally, these plans must comply with mental health and substance use parity requirements, as set forth in MHPAEA, meaning coverage for mental health and substance abuse services generally cannot be more restrictive than coverage for medical and surgical services.
Q: How do I find out if my health insurance plan is supposed to be covering mental health or substance use disorder services in parity with medical and surgical benefits? What do I do if I think my plan is not meeting parity requirements?
Answer: In general, for those in large employer plans, if mental health or substance use disorder services are offered, they are subject to the parity protections required under MHPAEA. And, as of 2014, for most small employer and individual plans, mental health and substance use disorder services must meet MHPAEA requirements.
If you have questions about your insurance plan, we recommend you first look at your plan’s enrollment materials, or any other information you have on the plan, to see what the coverage levels are for all benefits. Because of the Affordable Care Act, health insurers are required to provide you with an easy-to-understand summary about your benefits including mental health benefits, which should make it easier to see what your coverage is. More information also may be available via the Mental Health and Addiction Insurance Help consumer portal prototype and with your state Consumer Assistance Program (CAP). Additional, helpful information on what you can do to better understand the parity protections you have is available in Know your Rights: Parity for Mental Health and Substance Use Disorder Benefits.
Q: Does Medicaid cover mental health or substance use disorder services?
Answer: All state Medicaid programs provide some mental health services and some offer substance use disorder services to beneficiaries, and Children’s Health Insurance Program (CHIP) beneficiaries receive a full service array. These services often include counseling, therapy, medication management, social work services, peer supports, and substance use disorder treatment. While states determine which of these services to cover for adults, Medicaid and CHIP requires that children enrolled in Medicaid receive a wide range of medically necessary services, including mental health services. In addition, coverage for the new Medicaid adult expansion populations is required to include essential health benefits, including mental health and substance use disorder benefits, and must meet mental health and substance abuse parity requirements under MHPAEA in the same manner as health plans. Find additional information on Medicaid and mental health and substance use disorder services.
Q: Does Medicare cover mental health or substance use disorder services?
Answer: Yes, Medicare covers a wide range of mental health services.
Medicare Part A (Hospital Insurance) covers inpatient mental health care services you get in a hospital. Part A covers your room, meals, nursing care, and other related services and supplies.
Medicare Part B (Medical Insurance) helps cover mental health services that you would generally get outside of a hospital, including visits with a psychiatrist or other doctor, visits with a clinical psychologist or clinical social worker, and lab tests ordered by your doctor.
Medicare Part D (Prescription Drug ) helps cover drugs you may need to treat a mental health condition. Each Part D plan has its own list of covered drugs, known as formulary. Learn more about which plans cover various drugs.
If you get your Medicare benefits through a Medicare Advantage Plan (like an HMO or PPO) or other Medicare health plan, check your plan’s membership materials or call the plan for details about how to get your mental health benefits.
If you get your Medicare benefits through traditional Medicare (not a Medicare Advantage plan) and want more information, visit Medicare and Your Mental Health Benefits (PDF | 879 KB). To see if a particular test, item or service is covered, please visit the Medicare Coverage Database.
Q. What can I do if I think I need mental health or substance use disorder services for myself or family members?
Here are three steps you can take right now:
Q: What is the Health Insurance Marketplace?
The Health Insurance Marketplace is designed to make buying health coverage easier and more affordable. The Marketplace allows individuals to compare health plans, get answers to questions, find out if they are eligible for tax credits to help pay for private insurance or health programs like the Children’s Health Insurance Program (CHIP), and enroll in a health plan that meets their needs. The Marketplace Can Help You:
- Look for and compare private health plans.
- Get answers to questions about your health coverage options.
- Get reduced costs, if you’re eligible.
- Enroll in a health plan that meets your needs.
Learn more at HealthCare.gov.
Mental health care that’s expensive to the point of being inaccessible has been an issue for a long time, but it has taken on new urgency during the Covid-19 pandemic. For many people, waiting for insurance companies to get it together is not an option right now. Luckily, you may not have to wait. There are steps you can take to better manage these costs.
There’s no other way to put it: Health insurance plans are confusing. For young people navigating them for the first time on their own, it can be difficult to figure out what’s actually covered and what’s not — especially when it comes to mental health.
Though federal laws require insurance companies to cover mental and physical health issues equally, deep disparities persist between the two. In fact, 42% of people struggle to cover high costs related to mental health. Even if you’re insured through your school, your parents, or your job, any treatment beyond mindful meditation can be difficult to afford.
Mental health care that’s expensive to the point of being inaccessible has been an issue for a long time, but it has taken on new urgency during the Covid-19 pandemic. Last year, almost 80% of people aged 18 to 24 and more than 75% of people aged 25 to 34 who took an anxiety or depression screen scored with moderate to severe symptoms.
While younger generations, specifically Millennials, are more likely to attend therapy than their predecessors, 20% of those diagnosed with major depression don’t seek treatment — and it’s not hard to imagine why. Even with insurance, the copay for a therapy session can range from just a few dollars to $50 or more.
For many people, waiting for insurance companies to get it together is not an option right now. Luckily, you may not have to wait. There are steps you can take to better manage these costs. Based on my experience as the CEO and co-founder of a health savings account (HSA) provider, here are a few tips for getting yourself set up with (affordable) mental health care:
A Guide to Confusing Health Care Terms
This is not an exhaustive list by any means, but these are the terms that will come up most often as you navigate mental health care costs and decide what route is best for you.
Out of pocket:
When you pay out-of-pocket expenses, it means you’re covering the cost of care with your own money. Though you may be reimbursed for these costs later, this term refers to the amount you pay for your deductible, coinsurance, copay, and premium.
Deductible:
This is the amount of money you are required to pay out of pocket before your insurance actually kicks in. If your deductible is $1,500, for instance, you will be responsible for putting that amount of money toward your medical costs each year.
Copay:
A predetermined amount of money you pay for in-network doctor visits, prescriptions, therapy, and other care at the time you receive it, which does not go toward your deductible amount. Not all plans have associated copays.
Coinsurance:
After you’ve reached your deductible (without adding the cost of copays) and your insurance company starts helping you out, you will still be responsible for paying a percentage of your medical costs. That percentage is called your coinsurance rate. Let’s say you meet your $1,500 deductible and then book a $100 doctor’s visit, for instance. If your coinsurance rate is 20%, you would pay $20% of $100, or $20 total, for the appointment, and your insurance would cover the rest.
Premium:
The fee you pay every month to your insurance provider for health care coverage.
Reimbursement:
You can sometimes get money back for insurance costs you’ve already paid — often by submitting a claim. Most insurance companies will guide you on how and when you are able to do this.
In-network:
Not every doctor or medical institution works with your insurance company to provide lower rates for care.“In-network” refers to the ones that definitely do. For example, if you’re insured by Blue Cross Blue Shield, and your therapy appointments are covered by the company, then your therapist is what we call an “in-network provider.” You can see in-network providers at a lower cost than out-of-network providers.
Out-of-network:
Out-of-network providers don’t have set agreements with your insurance company to offer lower rates. Naturally, they are more expensive — you often have to pay entirely out of pocket to see them. Sometimes, you can submit a claim to get reimbursed for some of that cost, but it will depend entirely on your plan.
HDHP (high-deductible health plan):
These health care plans have lower monthly premiums and higher deductibles ($1,400 or more for individuals and $2,800 or more for families). They can come in the form of HMOs, PPOs, or EPOs. To offset those out-of-pocket costs, these plans may include HSAs. Low-deductible health plans, on the other hand, offer lower deductibles but often come with higher monthly premiums.
HSA (health savings account):
HSAs are savings accounts used specifically for certain health expenses. They have a triple tax advantage, which means you put tax-free funds into them, that money grows free of tax, and it can be withdrawn tax-free when you need it. The money you contribute is taken straight from your paycheck or transferred from your bank account.
Summary of benefits and coverage (SBC):
The details of your health insurance plan, which will indicate whether mental health and other services are covered — and how much they will cost you.
Educate Yourself Before Choosing a Mental Health Provider
The sheer number of unfamiliar terms you’ll encounter when deciding whether you can afford the cost of mental health care under your insurance plan may feel overwhelming.
Explore Multiple Options
Take some time to think about what you want from a mental health provider (aka a therapist or psychologist). Depending on your location, you may have multiple options. To land on one that will be best suited to your needs, do some good old-fashioned Googling to see what other patients have said about the provider you’re interested in. The National Alliance on Mental Illness (NAMI), the American Medical Association, and the Association for Behavioral and Cognitive Therapies are good resources to check out.
You should also visit each provider’s website to learn whether or not they accept your health insurance. Most insurance companies will have a list of in-network providers available online, or you can call your insurance company and ask it to send you a list of in-network mental health professionals.
If you’re already seeing a therapist that you pay for out-of-pocket, discuss whether they would be willing to offer a discount or payment plan to help you manage the costs. If they won’t and the care is straining your budget, consider switching to an in-network provider. Working with only in-network therapists or psychiatrists may limit the number of doctors available to you or extend how long it takes to find someone you like, but the long-term savings may make it worthwhile.
Last but not least, beware of out-of-network providers that operate from in-network hospitals or treatment facilities. A study by Health Affairs found that as much as $40 billion a year is spent on patients receiving treatment from out-of-network providers (often unknowingly) through in-network facilities.
Understand Reimbursement Protocols
Let’s say you already have a preferred mental health care provider who charges $200 per visit. If this provider is not in your insurance company’s network, you may be on the hook for the total cost of your treatment. But, if your insurance plan offers reimbursement, you can get some of those funds back by submitting a claim.
This will depend entirely on your health plan. Some companies provide reimbursement for a range of services, including therapy, medical management, psychological testing services, etc. Check your “summary of benefits and coverage” (SBC) to figure out whether yours is one of them. Your SBC is normally sent to you when you enroll in a health plan, and it can also be found on your insurer’s website.
Just remember: Even if your plan says mental health is covered, that doesn’t mean all services are included. How much actual “coverage” an insurance plan provides often varies considerably, so be sure to explore your policy’s repayment details.
Save Strategically
If you have a high-deductible health plan (HDHP) that doesn’t include your preferred mental health provider in its network — and the out-of-network benefits for mental health are insufficient for your needs — consider redirecting your premium savings to an HSA and purchasing mental health care directly.
An HSA enables you to pay for out-of-pocket mental health care costs with pretax dollars. With an employer-sponsored HSA, you deduct money from your paycheck before it’s taxed by the government to pay for treatment — and can thereby reduce the wages you pay taxes on. If your HSA doesn’t come from your employer, you can add money from your bank account, and the tax savings will come when you file your taxes for the year. Depending on your tax bracket, or the tax rate you pay based on your income, an HSA could help you save 15% to 37% on health care expenses.
For example, let’s say you fall in the 22% tax bracket (for anyone earning $40,526 to $86,375) and pay $150 for an out-of-pocket therapy session. With an HSA for mental health, you would save $33 on each session in the form of tax savings. That’s basically free money in your pocket.
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Consider Online Therapy
Compared to other forms of health care, therapy is ideally suited to telemedicine. After all, speaking to someone on Zoom (or chat, text, email, or phone) is the closest we can get right now to conversing in the same room. And according to multiple studies, it is just as effective as in-person treatment. There are numerous great options for “remote” mental health care available that are more convenient and less expensive.
Furthermore, you may be able to subscribe to online therapy providers and pay a set fee per month for unlimited access to a therapist, which could provide a higher level of treatment at a lower cost than paying for individual appointments with an in-person therapist. For example, Talkspace costs $65 to $99 a week if you get billed monthly — or $52 to $79 per week if you choose to pay for three or six months in advance. Online therapy might not be the right fit for everyone, but it’s always worth considering.
Until insurance providers start treating mental and physical health care the same, you have to be your own advocate. Educate yourself about your plan options, provider networks, and payment policies. And don’t be afraid to think outside the box. An HSA might seem complicated, for example, but it’s one of the best ways to save on treatment if you lack adequate mental health insurance coverage. Cost should never compromise care; as long as you’re proactive, it doesn’t have to.
