Insurance 101: Making Sense of Insurance
If you're a little fuzzy on how health insurance works for psychotherapy, you're not alone. There are a million and one plans out there, each with its own set of rules... and insurance-speak is a foreign language. This section will explain some of the basics.
Deductibles
One of the first questions to ask is "Does my plan carry a deductible?" If you have a deductible, you may have to pay your therapist's fee out of your pocket until your reach that number.
For example, a person with a $2000 deductible might be responsible for paying for her medical and/or behavioral health appointments until she has spent $2000, at which point her insurance plan will begin paying for the appointments (minus any applicable copayment or coinsurance). Why do I say she "might" be responsible? Because in some cases the deductible will not apply to mental health treatment. Your insurance carrier can answer this for you.
"In-Network" vs "Out-of-Network"
Another question to ask of your health care plan is "Are there restrictions on which providers I can see?" All insurance plans have a "provider network," which is a roster of clinicians who have been approved and contracted with them to provide services at discounted rates. These are called "in-network" or "preferred" providers. ANY clinicians who are not on this roster are by default "out of network" or "nonpreferred" providers. Some insurance plans, such as HMOs, will not pay for their members to see providers outside of the network. Other insurance plans, such as PPOs, do allow their members to see both in-network and out of network providers, but the member's financial obligation is different in each case.
What therapy will cost the client using insurance: an example
Here is a hypothetical insurance plan to illustrate. Say the client has a $1000 deductible, a $25 copay, and 20/80% out-of-network benefits. His therapist's customary fee for clients not using insurance is $100/session (an easy number to work with).
If his therapist is in-network:
-The client will be responsible for paying his therapist directly out of his pocket until he has spent $1000. The cost of the sessions depends on the therapist's contracted rate with the insurance company.
-After reaching his $1000 deductible, the client will begin paying only his $25 copay at each session, directly to the therapist. The insurance company will pay the therapist the remainder of the contracted fee.
If his therapist is out-of-network:
-In this case, the client will be responsible for paying his therapist directly out of pocket for all sessions at $100 per session (her customary fee), even after the deductible has been reached.
-After reaching his deductible, the client will be eligible for reimbursement from his insurance carrier at the rate of 80% of the therapist's fee. So he will receive a reimbursement of $80 (80%) per session. His share will be $20 (20%).
-For my clients using out-of-network benefits, I provide a monthly "superbill" that they submit to their insurance company.
Copayment vs Coinsurance
This only applies when a client is seeing a provider in her network.
A copayment is a flat fee that the client is responsible to pay an in-network provider at each session. Most of my clients' copayments fall between $10-45 per session. For example, if the therapist is an insurance provider with a contracted rate of $60 per session and the client's copayment is $20, the client will pay the therapist $20 per session, while the insurance company covers the other $40.
Some clients are responsible to pay coinsurance rather than a copayment. Coinsurance is a percentage of the therapist's contracted insurance rate. For example, if the therapist is an insurance provider with a contracted rate of $60 per session and the client's coinsurance is 10%, the client will pay the therapist $6 per session, while the insurance company covers the other $54.
This page is meant to be a general explanation of how behavioral health insurance benefits work. The figures chosen are for illustrative purposes only. Clients with financial concerns should always call their insurance carrier directly before starting therapy to verify the details of their benefits so that they can predict costs and budget appropriately
Deductibles
One of the first questions to ask is "Does my plan carry a deductible?" If you have a deductible, you may have to pay your therapist's fee out of your pocket until your reach that number.
For example, a person with a $2000 deductible might be responsible for paying for her medical and/or behavioral health appointments until she has spent $2000, at which point her insurance plan will begin paying for the appointments (minus any applicable copayment or coinsurance). Why do I say she "might" be responsible? Because in some cases the deductible will not apply to mental health treatment. Your insurance carrier can answer this for you.
"In-Network" vs "Out-of-Network"
Another question to ask of your health care plan is "Are there restrictions on which providers I can see?" All insurance plans have a "provider network," which is a roster of clinicians who have been approved and contracted with them to provide services at discounted rates. These are called "in-network" or "preferred" providers. ANY clinicians who are not on this roster are by default "out of network" or "nonpreferred" providers. Some insurance plans, such as HMOs, will not pay for their members to see providers outside of the network. Other insurance plans, such as PPOs, do allow their members to see both in-network and out of network providers, but the member's financial obligation is different in each case.
What therapy will cost the client using insurance: an example
Here is a hypothetical insurance plan to illustrate. Say the client has a $1000 deductible, a $25 copay, and 20/80% out-of-network benefits. His therapist's customary fee for clients not using insurance is $100/session (an easy number to work with).
If his therapist is in-network:
-The client will be responsible for paying his therapist directly out of his pocket until he has spent $1000. The cost of the sessions depends on the therapist's contracted rate with the insurance company.
-After reaching his $1000 deductible, the client will begin paying only his $25 copay at each session, directly to the therapist. The insurance company will pay the therapist the remainder of the contracted fee.
If his therapist is out-of-network:
-In this case, the client will be responsible for paying his therapist directly out of pocket for all sessions at $100 per session (her customary fee), even after the deductible has been reached.
-After reaching his deductible, the client will be eligible for reimbursement from his insurance carrier at the rate of 80% of the therapist's fee. So he will receive a reimbursement of $80 (80%) per session. His share will be $20 (20%).
-For my clients using out-of-network benefits, I provide a monthly "superbill" that they submit to their insurance company.
Copayment vs Coinsurance
This only applies when a client is seeing a provider in her network.
A copayment is a flat fee that the client is responsible to pay an in-network provider at each session. Most of my clients' copayments fall between $10-45 per session. For example, if the therapist is an insurance provider with a contracted rate of $60 per session and the client's copayment is $20, the client will pay the therapist $20 per session, while the insurance company covers the other $40.
Some clients are responsible to pay coinsurance rather than a copayment. Coinsurance is a percentage of the therapist's contracted insurance rate. For example, if the therapist is an insurance provider with a contracted rate of $60 per session and the client's coinsurance is 10%, the client will pay the therapist $6 per session, while the insurance company covers the other $54.
This page is meant to be a general explanation of how behavioral health insurance benefits work. The figures chosen are for illustrative purposes only. Clients with financial concerns should always call their insurance carrier directly before starting therapy to verify the details of their benefits so that they can predict costs and budget appropriately