Does Health Insurance Cover Therapy?
Often, health insurance plans cover therapy and other types of mental health treatment. However, the level of coverage, the types of therapy covered, and associated costs can vary greatly depending on your specific insurance plan.
In the following guide, we’ll unpack the mental health benefits that are available to the public, which insurance plans cover them, and how you can gain access.
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Mental Health and Therapy a Critical Part of Overall Wellness
In 2023, more than 52 million adults in the United States were suffering from some sort of mental health condition. While the topic of mental health care was once somewhat taboo, society now places a greater emphasis on mental health care, and more individuals are seeking treatment.
Mental health disorders cover a broad spectrum, from common conditions like depression and anxiety to more severe illnesses like bipolar disorder and schizophrenia. Developmental disorders such as autism spectrum disorder and attention-deficit hyperactivity disorder (ADHD) are also included. Many treatment options are available, including preventive measures such as stress management and resilience training, psychological assessments, various forms of psychotherapy, medication management, and holistic therapies.
Affordable Care Act Requires Coverage for Mental Health
Recognizing the necessity of holistic health, the Affordable Care Act (ACA) mandates that compliant health plans must provide coverage for mental health services, including therapy. This requirement means that Americans who purchase insurance through the ACA Marketplace or from an insurer that provides ACA compliant policies have coverage that includes services like counseling and psychotherapy.
While the exact coverage varies widely according to the state and the provider, insurers are prohibited from denying coverage. It is important to note that some health insurance plans, such as renewable short term health plans, are not ACA compliant and are not held to the same standards. Noncompliant plans are not required to provide access to therapy or refrain from penalizing insured people with a preexisting mental health diagnosis.
Types of Mental Health Care Covered by Health Insurance
Health insurance plans typically cover a wide range of mental health care services, including outpatient services like psychotherapy and counseling and inpatient services for mental health care and substance use disorder treatment.
Generally, for mental health treatment to be covered, health insurance plans require the service to be deemed medically necessary for the diagnosis, treatment, or care of a condition that affects health, functionality, or quality of life. Some also require a mental health diagnosis of a recognized disorder listed in the Diagnostic and Statistical Manual of Mental Disorders (DSM).
Depending on the type of plan and treatment, you may need a doctor’s prescription or recommendation. Some providers may also require pre-authorization. Your coverage and requirements may vary depending on whether your plan is a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO).
Types of Therapies Typically Covered
- Cognitive behavioral therapy (CBT): Targets negative patterns of thought, aiming to actively change one’s thinking to help overcome various anxieties and neuroses
- Psychodynamic therapy: Aims to provide relief to the patient by creating the opportunity to explore their past experiences and subconsciousness 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 and become more comfortable with themselves
- Humanistic therapy: A method that provides positive reassurance and a judgment-free atmosphere without a specific treatment goal in mind, generally focused on personal growth and alleviating negative self-thought caused by past trauma
Types of Therapists Typically Covered
- Psychiatrists: As medical doctors specializing in mental health, psychiatrists can prescribe medication.
- Psychologists: These are mental health professionals who diagnose and treat mental health disorders, mainly through therapy.
- Licensed clinical social workers (LCSW): These professionals offer therapy and connect individuals with resources.
- Licensed professional counselors (LPC): These counselors provide therapy for a variety of mental health conditions.
Limitations and Exclusions to Know
Mental health insurance may not cover certain types of therapy and therapists. Excluded services typically include sex therapy, couples therapy, marital counseling, and therapies conducted by professionals without recognized licenses, such as life coaches.
How Coverage for Mental Health Works
Insurance for mental health operates much like other medical coverage. After you visit a healthcare provider, you receive an Explanation of Benefits (EOB) outlining the treatments and services covered under your plan and associated costs.
Your EOB shows you which mental health services are covered, what portion of the costs you’re responsible for, and how much of your deductible you’ve paid. It also highlights whether your chosen therapy and therapist are within the network.
When receiving insurance covered mental health services, you may encounter the following costs:
- Premiums: This is the monthly payment you make to keep your health insurance active. Premiums are due even if you do not receive services.
- Copays: This is a fixed amount you pay for a covered healthcare service, typically due at the time you receive the service. Therapists are generally considered specialists, which may require a higher copay.
- Coinsurance: This is your share of the costs of a healthcare service, calculated as a percentage of the insurance-approved amount.
- Deductible: This is the set amount you must pay toward your healthcare services before your plan begins to pay.
- Out-of-pocket maximums: This is the most you have to pay for covered services in a plan year. After you spend the maximum amount on deductibles, copayments, and coinsurance, your health plan pays the full cost of covered benefits until the end of the plan year.
- Out-of-network fees: If you choose a therapist not in your plan’s network, you may have to pay an additional cost or full price for the sessions.
In-network vs. Out-of-Network Therapists
An in network therapist has a contract with your insurance company, which means they’ve agreed to accept a predetermined rate for their services. Using in network providers can help you limit your out-of-pocket costs and avoid unexpected bills.
Out-of-network therapists do not have a contract with the insurance company, so that they may charge more. In addition, the insurance provider may pay a lower percentage, charge higher copays, or refuse to pay for services provided by out-of-network therapists.
Therapy Options for Those Without Insurance
If you do not have insurance that covers mental health, you may still be able to access affordable mental health care. Some alternatives can make therapy accessible, including:
- Sliding scale therapists: Many therapists offer services on a sliding fee scale based on income.
- Online therapy platforms: Several online platforms provide affordable therapy options.
- Community health clinics: Local clinics may often offer mental health services at reduced rates.
- Hotlines: Includes free hotlines that provide immediate emotional support.
- Advocacy and financial aid programs: Various organizations offer financial aid or connect individuals to affordable mental health resources.
- CHIP (Children’s Health Insurance Program): Provides coverage for behavioral and essential mental health services for teens and children at affordable rates.
Putting It All Together
Navigating mental health coverage can be a complex process, but promptly addressing mental health issues is critical for your overall well being. With a solid understanding of how insurance typically covers therapy and awareness of the costs, you can make informed decisions about your mental health care.
Keep in mind that a wide range of mental health services are available, and many are covered by health insurance. Even without insurance, there are ample options for accessible and affordable care.
If you are struggling with your mental health, please reach out to a trusted healthcare professional. You may also find free 24/7 support with the 988 Lifeline by dialing 988 on your phone.