As of 2022, 50 million people in the US experience some form of mental health condition. While mental illness is a catch-all term that implies a variety of disorders ranging from General Anxiety to Schizophrenia, one cannot ignore the current prevalence of discourse on a subject that used to be taboo.
With the increased societal emphasis on mental health over the past decade, more and more people are seeking treatment. However, as with any medical treatment, mental health services cost money. Therefore, seeking insurance coverage for those services has become top of mind for many people.
In this article, we’ll unpack what mental health services are available to the public, which insurance plans cover them, and how you can gain access.
Does Insurance Cover Therapy?
Yes, most health insurance plans cover therapy as part of their treatment offerings.
According to the law, insurance companies offering Affordable Care Act (ACA)-compliant health plans are required to provide coverage for mental health services, including therapy.
In the past, those selling health insurance policies were not required to offer therapy as part of their services. That all changed in 2010 when the Affordable Care Act (ACA), also known as Obamacare, was passed through congress.
The ACA requires that every plan purchased through its marketplace cover ten health service categories. These include:
- Ambulatory patient services (outpatient services)
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services, including therapy
- Prescription drugs
- Rehabilitative and habilitative services (those that help patients acquire, maintain, or improve skills necessary for daily functioning) and devices
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
Therefore, Americans who purchase health insurance through the ACA marketplace (or from an insurer that provides ACA-compliant policies) have a plan that is required to cover services like counseling and psychotherapy. While the exact coverage varies widely according to the state in which the policy is purchased and the provider, insurers are prohibited from denying coverage.
ACA Compliant vs. Non-compliant Insurance Plans
Not all health insurance plans are ACA-compliant. For example, renewable short-term health plans are not held to the same standards as ACA-compliant plans. Further, they are not required to provide access to therapy or refrain from penalizing insured people with a pre-existing mental health diagnosis.
Insurers offering substance use disorders and mental health services provide coverage comparable to the plan’s coverage for general surgical and medical care according to the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008. The ACA expanded this law to include qualified plans on the Health Insurance Marketplace.
How to Determine if Your Health Insurance Offers Therapy
If you aren’t sure whether your non-compliant plan provides access to therapy, we recommend taking the following steps:
Check Your Insurance Account Online
Many insurers have online portals providing easy access to the details of your health insurance coverage, including your co-pay and co-insurance amounts, your annual deductible, services that are covered at no charge, which may include vaccinations and preventive care, and whether you must receive care from in-network providers to get coverage.
If you must receive care from an in-network healthcare provider to get coverage (as with an HMO), you may be able to search the health insurance company’s site to find out if your doctor or therapist is in your network.
Call Your Insurance Provider
If you are unsure whether your health insurance plan covers therapy, you can call the insurance provider directly. Have your health insurance card ready so you can share the plan ID and other details to help the customer service representative find your plan in their database.
Make sure to inquire about the following:
- If the therapy services you need are covered, how much should you expect to pay.
- Whether you need pre-authorization for mental health services.
- Ask if you can have a list of therapists in your area who accept your insurance coverage.
Ask Your Employer’s HR
If you can’t access your health insurance information online or want to find out if your company provides mental health services as part of its benefits package, you can contact HR. Ask whether the company covers therapy, and if so, how you can take advantage of that benefit. You may have to see certain participating providers.
Suppose your HR department can’t provide details about whether your health insurance plan covers therapy. In that case, they might be able to help you navigate your insurer’s online portal or provide you with a phone number for customer service so you can learn more about your coverage.
Ask the Therapist
When you make an appointment, the receptionist or therapist may check whether your health insurance covers the treatment. If they do not, they might be able to refer you to a practice that works with your insurer. If the office does take your insurance, verify the required co-payments or co-insurance so you understand your upfront out-of-pocket costs.
Remember that if you must satisfy an annual deductible, you may have to pay for 100% of the cost of each session until you reach your plan’s deductible before the insurer starts paying a portion of your costs.
Does Insurance Cover Online Therapy?
Many mental health professionals provide online access to counseling and therapy, but not all online therapists accept insurance. Online therapy provides convenient access to professional counseling services from the comfort of your home. The main difference between online and conventional therapy is that your sessions are conducted over a video chat platform instead of in person.
Telehealth providers may need to be licensed in your state to accept your insurance. Online therapy could be less expensive than alternatives covered by your health insurance plan, depending on your out-of-pocket costs.
How Does Insurance Cover Therapy?
The method in which compensation is provided to specialists for your use of mental health services depends on your insurance policy. Mental health services do not count toward your deductible for some ACA-compliant plans. Therefore, you pay only a small co-pay per session; the insurer provides the difference between the total cost of the session and your contribution. This model is similar to how many insurance policies pay for office visits to a general practitioner.
In contrast, some plans (even ACA-compliant ones) do not provide payment for therapy until you’ve reached your annual deductible. For example, imagine your annual deductible is $1,000, and each of your therapy sessions costs $50 out-of-pocket. In this case, you would need to pay for 20 sessions before the insurance begins sharing the cost.
Further, ACA-compliant plans mandate parity laws. These laws state that your insurer must count your out-of-pocket costs for mental health services toward your health plan’s deductible and that mental health benefits must not be subject to separate treatment limitations.
Non-ACA-compliant plans that offer therapy commonly do not provide cost-sharing until you reach your deductible. Keep in mind that not all non-ACA-compliant plans offer mental health services as an available treatment, especially if you enrolled in your insurance prior to the ACA or you’ve been previously diagnosed with a mental disorder. If you find yourself with one of those plans, you will likely become responsible for paying for any out-of-pocket treatment.
What If I Can’t Afford My Deductible?
Many mental health professionals charge, including licensed psychologists and psychiatrists, may provide counseling services for highly variable prices. Some may provide “sliding-scale” services, meaning the payment depends on your income level. No matter what, make sure to shop around before committing to one provider.
Services like Open Path Psychotherapy Collective provide less expensive in-person or online psychotherapy sessions. Open Path is a nationwide network of mental health professionals. The site provides access to a searchable database of therapists in your area and a sliding scale of potential costs that range from $30 to $80 per session. Further, apps such as BetterHelp and Talkspace provide access to teletherapy appointments with costs that may be lower than your insurance deductible.
Keep in mind that if you do not use insurance to help cover your therapy sessions, any money you spend on this mental health service does not count toward fulfilling your annual health insurance deductible.
Therapy Services Typically Covered by Insurance
Depending on the plan’s terms, both online and in-person therapy options might be covered by insurance. Online therapy may be more difficult to cover if the provider is located outside your area since your health plan may consider them an out-of-network provider. Remember that insurance does not generally cover couples counseling, marriage counseling, career counseling, coaching, or holistic treatments.
Behavioral Health Treatments
In general, insurers will cover talk therapy, psychotherapy, and counseling as part of your covered options. Some of the most common treatments include cognitive behavioral therapy (CBT), psychodynamic therapy, dialectical behavioral therapy (DBT), and humanistic therapy. Keep in mind that some of these treatments overlap in intent and method.
- Cognitive Behavioral Therapy is a variety of therapy that aims to actively change one’s thinking as a mechanism to help the patient overcome various anxieties and neurosis.
- Psychodynamic Therapy aims to provide relief to the patient by providing the opportunity to explore their past experience and subconscious as a method of understanding their current issues and an opportunity to overcome them.
- Dialectical Behavioral Therapy allows people with extreme emotions the opportunity to accept their issues in an effort to help them become more comfortable with themselves.
- Humanistic Therapy is a method that provides positive reassurance and a judgment-free atmosphere without a specific treatment goal in mind. The therapist will generally focus on personal growth and alleviating negative self-thought caused by past trauma.
Mental and Behavioral Health Inpatient Services
Inpatient services provide an immersive care environment in the psychiatric unit or a psychiatric hospital for people struggling with mental health. Inpatient settings require an overnight stay (or longer) and may include substance use disorder treatment, medication management, and counseling. People who need mental and behavioral health inpatient services typically stay fewer than 30 days.
These treatments are often helpful for people who are acutely suffering from their issues to the point that they can’t function in their daily lives.
Coverage for Pre-existing Conditions
ACA-compliant health plans cover treatment for mental health conditions diagnosed before the plan’s start date. Pre-existing mental health conditions may include a diagnosis of depression, anxiety, obsessive-compulsive disorder (OCD), bipolar affective disorder, or attention-deficit/hyperactivity disorder (ADHD).
Substance Abuse Treatment
The ACA requires compliant health plans to include coverage for substance use disorder treatment, including outpatient treatment, residential treatment, recovery support services, detoxification, mental health treatment, and medications.
Before the ACA and MHPAEA, substance use disorder treatment was not typically covered by health insurance or was limited with medication coverage restrictions, annual visit limits, and higher co-payments.
The ACA extends substance use disorder treatment coverage to include those covered by an ACA-compliant health plan. All health plans provide coverage for brief intervention and substance use disorder screening. States have the legal right to determine the range of substance use disorder treatment services covered by ACA-compliant plans in their networks.
Therapy Options for Those Without Insurance
Those who do not have access to health insurance for mental health through their employer might be able to get an ACA-compliant plan on the marketplace to gain access to covered therapy and other mental health services. Depending on one’s income level, these plans may be free of charge or fall under Medicaid, the government program that provides health care to low-income individuals. Still, if you cannot enroll in health insurance, various other resources are available. Here are a few of the best options:
CHIP (Children’s Health Insurance Program)
CHIP provides coverage for behavioral and essential mental health services for teens and children to diagnose, treat, and prevent mental health disorders and symptoms via telehealth or in person. Expectant mothers may also be able to access CHIP resources.
Each state sets CHIP cost-sharing requirements for families with this type of coverage. For example, the CHIP co-payment for a counseling session in Texas is between $5 and $25, depending on your income range and family size.
Medicaid is a state-government subsidized and managed program that provides low-cost or free healthcare coverage to low-income people. Medicaid may also cover those with disabilities, those who are pregnant, and those in need of long-term care.
State-run Medicaid programs cover mental health and substance use disorder treatment services. While Medicaid programs may vary by state, they are also governed by MHPAEA.
While the ACA expanded Medicaid eligibility to eliminate some barriers, 11 states chose not to participate in the expansion, including:
- North Carolina
- South Carolina
To receive Medicaid coverage for therapy, getting a diagnosis and prescription for a specific type of therapy may be necessary. Medicaid also provides access to case management for chronic mental illness.
Medicare Part B (medical insurance) provides coverage for outpatient mental health services, including an annual depression screening, individual and group psychotherapy with certain medical professionals, family counseling, and psychiatric evaluations.
Those covered by Medicare pay 20% of the Medicare-approved amount for therapy sessions or doctor visits after meeting the $226 annual Part B deductible.
Depending on whether the provider accepts insurance and is in the provider’s network, online therapy might be covered by a health insurance policy. If an ACA-compatible insurance plan works with the online therapy provider, cost-sharing (co-pays, deductibles, and co-insurance) are the same as it would be for a doctor’s visit.