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You may be reading this because you made the decision to start therapy. However, you may be wondering what steps are next to pay for the therapy sessions. Will my insurance cover these services? How much will it cost me? Do I need to use insurance? All of these questions can feel overwhelming, but it doesn't have to be. The purpose of this post is to help you understand the different terms that insurance companies use. What to ask the insurance company about your policy and other options to help you pay for therapeutic services. Let’s start off by defining different insurance terms. But more effectively understanding these terms, will help you better understand how much you will have to pay out of pocket for therapeutic services.
The first term to understand when you talk about insurance is a premium. A premium is the bill you pay each month to be covered by an insurance company. Sometimes this premium is partially covered by your employer, or if you have Medicaid, you may have a low-cost or no premium. The amount of your premium varies greatly depending on what type of plan you have selected and what insurance company you go through.
Cost-sharing means you AND your insurance company both pay money toward your health care costs. Co-pays, deductibles, and coinsurance are all different elements of cost-sharing. You will want to pay extra attention to these three terms because they will determine how much you will be paying out of pocket for services.
Your co-pay is a fixed amount that needs to be paid every time you receive services. These costs can vary depending on your healthcare plan and the type of provider you may be seeing. For example, you may attend a counseling appointment and your insurance plan charges $20 for each visit. Keep in mind some insurance plans allow you to buy a plan that does not have co-pays; however, the premium for the plan may be higher.
Your deductible is the amount of money you have to pay for services before your insurance will start making payments. Every time you attend an appointment, the money you pay toward the appointment goes to decrease your deductible. Co-pays do not go toward the deductible. For example, let’s say your insurance plan has a $5,000 deductible and your counseling appointments cost $100. Every time you attend a counseling appointment, you will have to pay $100. This $100 will go toward paying down your deductible. So, after one appointment with your counselor your deductible would be $4,900.
Co-insurance is the cost you owe after meeting your deductible. The co-insurance is generally a percentage of the cost of a covered medical service. Once your co-insurance is met, your medical insurance should cover all your costs. This is called meeting your out-of-pocket maximum. Let’s continue with our example. You have met your $5,000 deductible, but your insurance plan has a $1,000 co-insurance. Each therapy appointment is $100, and the percentage you are required to pay for each session is 30%. Therefore, you pay $30 per therapy appointment and that amount will go toward paying down the $1000 co-insurance. The co-insurance after the appointment is now $970.
It is also important to know whether your provider, in our case your potential mental health professional, is in-network or out-of-network. In-network providers are individuals or companies that are enrolled with the insurance company to provide services to individuals with their insurance plans. If your provider is out-of-network, you may be required to pay more for the services. Co-pays, deductibles, and co-insurances all differ depending on your insurance plan so make sure you reach out to your insurance company to verify your benefits. This information can also be found online by logging into your insurance company’s portal.
Okay. I understand the insurance terms. Now what? The best place to start is by getting ahold of your potential mental health professional and asking them if they accept your insurance plan. If you set up an appointment with the provider, they will ask you for a copy of your insurance card and they will also verify the details of your insurance plan. However, for due diligence, I would also suggest you verify with your insurance company that the provider is in-network. Unfortunately, due to issues with technology, there can be times when the mental health professional does not appear active within the insurance company’s database. If this happens, let the provider know so they can come to a resolution with the insurance company.
If you feel like you cannot afford therapy, there are options for you. Many mental health professionals are willing to work with you and most offer a sliding scale fee depending on your income. If you are curious about this option, ask your potential mental health professional if this is an option for you. Guide to Personal Solutions in Lansing, Michigan is in-network with numerous insurance companies and most of our clinicians offer a sliding scale fee option.
By: Jacqueline White, LPC