Therapy: Understanding Insurance Coverage

Therapy is often covered by insurance, but the extent of coverage depends on the type of insurance plan and provider. In the US, the Mental Health Parity and Addiction Equity Act (MHPAE) of 2008 requires insurers to cover mental health services to the same degree as other medical services. However, this law does not mandate insurers to provide coverage for mental health.

Most individual health insurance plans are required to cover mental health benefits, while most employer plans cover therapy too, but it is not mandatory. Medicare, Medicaid, and the Children's Health Insurance Program (CHIP) also offer therapy coverage.

To benefit from insurance coverage for therapy, the treatment typically needs to be considered medically necessary, meaning it is used to treat a specific mental health condition.

The Mental Health Parity and Addiction Equity Act (MHPAEA)

The MHPAEA was amended by the Patient Protection and Affordable Care Act (ACA) to also apply to individual health insurance coverage. The MHPAEA does not apply directly to small group health plans, although its requirements are applied indirectly in connection with the ACA's essential health benefit (EHB) requirements.

The MHPAEA preserves the protections of the Mental Health Parity Act of 1996 (MHPA) and adds new protections, such as extending parity requirements to substance use disorders. While the MHPAEA does not require large group health plans or health insurance issuers to cover MH/SUD benefits, if they choose to include these benefits, they must be treated equally with respect to annual and lifetime dollar limits, financial requirements, and treatment limitations.

The MHPAEA has made key changes, including:

• If a group health plan or health insurance coverage includes medical/surgical benefits and MH/SUD benefits, the financial requirements (e.g. deductibles and co-payments) and treatment limitations (e.g. number of visits or days of coverage) that apply to MH/SUD benefits must be no more restrictive than those that apply to substantially all medical/surgical benefits.
• MH/SUD benefits cannot be subject to separate cost-sharing requirements or treatment limitations that only apply to such benefits.
• If a group health plan or health insurance coverage includes medical/surgical benefits and MH/SUD benefits, and the plan provides for out-of-network medical/surgical benefits, it must also provide for out-of-network MH/SUD benefits.
• Standards for medical necessity determinations and reasons for any denial of benefits related to MH/SUD benefits must be disclosed upon request.

The MHPAEA has had a significant impact on insurance coverage for mental health services, ensuring that those seeking treatment for mental health conditions and substance use disorders have equal access to coverage and benefits as those with physical health needs.

Individual insurance plans

The Affordable Care Act requires that all plans on the federal health insurance marketplace and state marketplaces include coverage for mental and behavioural health services, including therapy. Plans that you buy directly from insurance companies also have coverage for mental health.

Individual health insurance plans have to include at least three types of mental health coverage:

• Behavioural health treatment, like therapy and counselling
• Inpatient mental health, like treatment centres
• Substance use disorder treatment

You can't be denied coverage if you have a pre-existing mental health condition.

The amount of coverage you have depends on the plan you choose. Catastrophic and Bronze plans have lower monthly rates compared to Silver, Gold and Platinum plans. But you'll also likely have to pay for more of your treatment yourself if you choose a lower-tier plan. This is because you'll probably have a higher deductible, as well as higher copays and coinsurance.

Some types of individual plans, like short-term health insurance and supplemental insurance, aren't required to follow ACA guidelines. That means these plans don't have to include coverage for mental health benefits. These types of plans might still have therapy insurance, but be sure to check before you buy.

The type of individual insurance plan you choose (like HMO, PPO, or EPO) can affect your access to mental health services. Each plan type has its own network of providers and rules for coverage. For instance, HMO plans might require seeing a primary care physician before visiting a therapist, while PPO plans offer more flexibility but potentially higher out-of-pocket costs.

Individual plans may have specific limits on the number of therapy sessions covered per year or impose certain restrictions, such as requiring a referral for therapy services. These limits and conditions can vary widely between different insurance plans.

Understanding your plan's deductible, copayments, and coinsurance is vital. These are the costs you're responsible for when accessing therapy services. Some plans might have high deductibles that must be met before coverage kicks in, while others might have more manageable co-pays per therapy session.

Plans typically have a network of therapists and mental health professionals who are considered "in-network". Visiting these providers usually results in lower out-of-pocket costs. Going to an out-of-network therapist often means higher costs and less coverage, but it might be necessary if you need a specialist or if in-network options are limited.

Individual plans may cover various forms of therapy, such as individual, group, or family therapy. The coverage might differ based on the therapy type, so it's important to check what your plan specifically covers.

Many individual insurance plans now include coverage for telehealth services, which can include online therapy. This can be a convenient and sometimes more affordable option for accessing mental health services.

Group insurance plans

Group health insurance plans are purchased by companies and organisations and then offered to their members or employees. These plans can only be purchased by groups, meaning individuals cannot purchase coverage through them.

Group health insurance plans are beneficial as they spread the risk across a pool of insured individuals, keeping premiums low. Insurers can also better manage risk when they have a clearer idea of who they are covering.

Group health insurance plans are usually cheaper than individual plans because the risk is spread across a higher number of people. This means that more people buy into the plan, making it more affordable.

Group health insurance plans require at least 70% participation by group members to be valid. The premiums are split between the organisation and its members, and coverage may be extended to members' families and/or other dependents for an extra cost.

There are two main types of group health insurance plans:

• Health Maintenance Organisations (HMOs): HMOs tend to keep costs low but restrict the flexibility of care afforded to individuals.
• Preferred Provider Organisations (PPOs): PPOs offer patients a greater choice of doctors and easier access to specialists but tend to charge higher premiums than HMOs.

In the US, the Mental Health Parity and Addiction Equity Act (MHPAEA) requires group plans to offer equal coverage for the treatment of mental health conditions and addiction. This means that treatment limitations, deductibles, and copays and coinsurance levels must be equal to or better than the type of coverage provided for medical or surgical issues.

The Affordable Care Act (ACA) also requires that plans offered through health insurance exchanges cover services for mental health and substance use disorders.

Online therapy

The good news is that many insurance providers now cover online therapy services, making it a more affordable option. However, it's important to note that coverage may vary depending on your insurance plan and location. Some popular insurance companies that cover online therapy include:

• Aetna
• Anthem
• Blue Cross Blue Shield
• Cigna
• Humana
• Magellan Health
• Tricare
• United Healthcare

To find out if your insurance covers online therapy, you can check the website of the therapy provider or contact your insurance company directly. Some therapy platforms that accept insurance include:

• Amwell
• BetterHelp
• Doctor on Demand
• MDLive
• Regain
• Talkspace

If your insurance doesn't cover online therapy, there are still affordable options available. Many online therapy platforms offer monthly plans or bundles at reasonable rates. Additionally, some therapists offer sliding scale fees, where they adjust their rates based on your financial situation.

• BetterHelp: $65 per week for unlimited text and chat with a therapist.
• Talkspace: Plans ranging from $49 to $79 per week, including unlimited text, video, and audio messaging.
• Regain: Couples counseling service costing $60 to 90 per week, depending on the plan selected.
• Online-Therapy: Plans ranging from $31.96 to $63.96 per week, including daily contact with a therapist and access to various therapeutic resources.
• Faithful Counseling, Teen Counseling, and Pride Counseling are also specialized websites that offer online therapy services.

In-network vs out-of-network therapists

When it comes to therapy, there are two types of therapists: in-network and out-of-network. In-network therapists have a contract with your insurance company, agreeing to provide services for a discounted rate. Out-of-network therapists, on the other hand, have not signed any such contract and can charge you the full price for their services. This can be significantly more expensive than seeing an in-network therapist, as insurance companies will not cover any of these costs.

The main benefit of seeing an in-network therapist is the financial aspect. You will likely have a co-pay for each session, which is a set amount that you pay for the service, and your insurance company will cover the rest. With out-of-network therapists, you will have to pay the full price of the session and then claim some of the money back from your insurance company. However, this reimbursement process can be complicated and time-consuming, and there is no guarantee that your insurance company will pay for any of the session.

Despite the potential financial drawbacks, there are several benefits to seeing an out-of-network therapist. Firstly, out-of-network therapists often have smaller caseloads, meaning they are more accessible and usually able to respond to calls and emails more quickly. They also tend to have shorter waiting lists, so you can start therapy sooner. Additionally, out-of-network therapists are not restricted by insurance company guidelines on the frequency, modality, duration, or orientation of care, meaning you have more flexibility in your treatment plan. This can be particularly beneficial if you are seeking specialized care or a specific type of therapist, such as a therapist of colour or a cognitive behavioural therapist. Out-of-network therapists can also offer more personalized services and creative treatment plans, as they are not limited to only providing services that can be billed to an insurance company. Furthermore, seeing an out-of-network therapist allows you to keep your mental health issues confidential, as insurance companies do not require detailed client files and diagnostic codes.

In conclusion, both in-network and out-of-network therapists have their advantages and disadvantages. While in-network therapists are typically more affordable, out-of-network therapists offer greater flexibility, accessibility, and confidentiality. Ultimately, the decision of which type of therapist to see depends on your individual needs and priorities.

Frequently asked questions