Is Therapy Covered by Health Insurance?

For decades, insured people in the United States often had weak mental and behavioral health benefits. Many health insurance policies offered no coverage for these issues or provided very limited coverage. Insurance companies did not treat mental health as a serious concern for most people. And the stigma surrounding mental health issues kept many people from seeking treatment even if their healthcare policy offered benefits.

Employer-supplied insurance policies lagged in the mental health area as well as individual policies. Policyholders might be limited to six visits a year and be covered at a 50% coinsurance rate. Rarely did insurance plans cover mental health therapy at the same rate they did other medical visits. If you visited your general practitioner, you might be charged a $20 copay while a therapy visit could cost you five times that or more. This inequality led to many people not seeking the mental health help that they needed.

Fortunately, mental health insurance benefits have improved greatly in the last twelve years. As a result, most Americans with an insurance policy can now get their therapy visits covered at an affordable rate.

Therapy Types

Psychotherapy usually falls into one of five main categories. They are:

• Psychoanalysis and psychodynamic therapies - attempt to probe the unconscious through the professional patient/doctor relationship.

• Behavior therapy - helps patients to learn new, healthy behaviors.

• Cognitive therapy - works to change dysfunctional thinking in order to change behavior.

• Humanistic therapy - Focuses on rational thought and human potential.

• Holistic therapy - Takes from different therapy types in order to fit the patient's specific needs.

Talk therapy is a general term used to describe many outpatient therapy sessions. Group therapy is also a popular method to treat mental disorders.

Inpatient care is an integral part of treatment for mental disorders or for substance abuse issues. Some stays can last for 30 days or more, so having the right insurance coverage is essential. Without it, the costs are beyond what many people can afford to pay.

General Insurance Coverage

The majority of insurance policies do offer some mental health coverage, but there are some exceptions. Most Individual and group insurance policies have varying levels of mental health therapy benefits. However, all plans that are eligible for the Affordable Care Act Marketplace must adhere to certain standards. The ACA has done much to ensure better options for Americans seeking treatment.

ACA Requirements

The ACA requires that most individual and small employer health insurance policies offer mental health and substance use disorder coverage. All plans that are sold on the Health Insurance Marketplace must provide these benefits as well as nine other essential health benefits. Providers must also include rehabilitative and habilitative services, other necessary components of mental health treatment. These requirements have been in place since 2014, although ACA requirements have been loosened when it comes to short-term insurance policies in the last few years.

Parity Law

The Mental Health Parity and Addiction Equity Act (MHPAEA) was passed in 2008, strengthening mental health benefits for Americans. This law requires most insurance policies to make their mental health benefits equal to their medical and surgical benefits.

Before this law was enacted, insurance companies who offered mental health benefits frequently imposed severe restrictions on their coverage. Often the annual number of outpatient visits was quite limited as were the days for inpatient treatment. For instance, patients with recurring bladder infections could return for treatment as often as needed, but those with anxiety issues might only have six visits allowed. The parity requirement means that you can go to your therapy sessions as many times as necessary.

The law also established that insurers could not charge more for mental health copayments or coinsurance than they did for medical/surgical visits. If you have a $20 copay for your general practitioner, then your copayment will be the same for your psychologist.

Also, if your plan provides out-of-network benefits for medical/surgical treatment, it must also provide that option for mental health visits. Your insurer cannot impose any special restrictions or treatment limits on mental health benefits.

There are exceptions to the parity law, including self-insured, non-Federal plans for companies with 50 employees or less, self-insured small businesses with 50 employees or less, etc. The law doesn't apply to the small number of plans that have no mental health benefits at all.

Medical Necessity

Of course, medical insurance claims are only covered when they demonstrate medical necessity. You cannot visit your therapist daily unless they can show that you need to do for your mental health. This provision is exactly the same as it is for medical visits. For your claim to be accepted, you have to have a valid reason for the visit.

The parity law forces insurers to apply the same medical necessity criteria to mental health and addiction treatments as they do to other claims. No policy can make it harder to prove medical necessity for therapy than it does for tonsillitis. Until the MHPAEA became law, insurers often offered inferior mental health benefits that cost much more and greatly limited access to treatment.

Government Plans

Public plans have more complicated mental health insurance benefits. Coverage varies under Medicare, Medicaid, and CHIP.

Medicare

Only Medicare Advantage plans must follow the parity rule. Other Medicare plans have their own specific benefits. Medicare Part B does offer mental health services, including visits with a psychiatrist, clinical psychologist, clinical social worker and clinical nurse specialist.

Medicare Part A also covers some inpatient mental health services, including care in a psychiatric hospital or general hospital. That care is limited to 190 days lifetime. The costs to the patient are the same whether they are seeking mental health inpatient services or medical/surgical benefits.

Medicaid

Medicaid mental and behavioral health insurance benefits can be complicated to decode. Each state is in charge of running their own Medicaid programs. All United States Medicaid programs do offer some level of mental health benefits, but the benefits in California are far different than those in Georgia. The parity law does not apply to basic Medicaid policies.

If you live in a state that accepted expanded Medicaid, then you will enjoy mental health parity. Under the expanded Medicaid program, insurance policies must follow Affordable Care Act regulations, which include parity and a higher level of benefits.

Expanded Medicaid also allows single adults and those making 133% of the poverty level to receive coverage. This program greatly expanded healthcare options for many low-income Americans.

Not all states signed on for expanded Medicaid, however. Currently, South Dakota, Wyoming, Kansas, Oklahoma, Texas, Missouri, Wisconsin, Tennessee, North Carolina, South Carolina, Georgia, Alabama, Mississippi and Florida have rejected this coverage, so residents of those states have fewer mental health options.

CHIP

The Children's Health Insurance Program does offer a high level of mental and behavioral benefits to children who qualify. Almost all of these programs include both outpatient and inpatient treatment and substance abuse benefits. These insurance benefits are typically generous with few limits on visits.

Identifying Benefits

You should carefully compare mental health benefits before choosing your health insurance policy. Any insurance plan that is ACA approved must offer you a higher level of benefits than plans that are not. Of course, ACA plans are not all the same. Some will go beyond the minimum standards.

One of the best ways to check your benefits is to read the summary of benefits and coverage or SBC. This section is easily accessed online and gives you a quick overview of your insurance benefits. Of course, you can research the more detailed policy descriptions for more specific information.

The SBC for ACA policies typically includes the following:

• Important Questions - Includes information on health plan costs such as deductibles, out-of-pocket expenses and in-network and out-of-network treatment costs.

• Common Medical Events - Discusses copayments and coinsurance amounts for common medical events such as office visits, imaging scans, hospital stays and prescription drugs.

• Excluded Services and Other Covered Services - Contains important information on excluded treatments and services. It also describes services that are covered that you may not have anticipated.

You can use the SBC to quickly eliminate policies that offer unsatisfactory mental health care and behavioral health benefits. It's an excellent tool for comparing available health insurance policies.

Mental Health Stigma

Some people hesitate to seek treatment because they fear the stigma that often comes with mental health issues. Although society has become more educated about these conditions, discrimination still exists. You may not want your neighbors, family members or coworkers to know that you have a problem. Most of all, you may fear having your employer find out about your illness.

Rest assured that you can use your mental health benefits without fear. You are protected in several fundamental ways. First, the Health Insurance Portability and Accountability Act (HIPAA) guarantees your privacy. It is illegal for your medical and health insurance providers to share this personal information. Your employer won't know about your mental health issues unless you decide to share them.

You are also protected against workplace discrimination by the American with Disabilities Act and Rehabilitation Act of 1973. Employers may not use your mental illness as an excuse to fire you or otherwise act against you in the workplace. These laws are enforced by the Equal Employment Opportunity Commission and the U.S. Department of Justice. If you believe that you are a victim of discrimination, you can file a federal or state complaint.

People with mental health and addiction problems still have to deal with prejudice in the community, but your health care and employment should not be affected. Do not hesitate to seek the treatment that you need.

Final Note

Anyone who needs mental health care or behavioral health treatment should be able to get the help that they need without facing huge medical bills or censure from the community. Attitudes toward mental illness are changing, and insurance coverage is changing as well. In most cases, your insurance policy should cover at least some of your therapy costs.

If a policy meets ACA standards, which many do, you should have adequate benefits for outpatient and inpatient care. Your copayment and coinsurance payments will vary depending on the policy that you choose. Once you buy a policy, the benefits for medical/surgical treatment and mental health treatment should be the same. Parity is one of the most important changes to health care in the last 50 years.

You cannot be discriminated against for using your mental health benefits. Your medical information is protected by HIPAA. Also, even when you have a company plan, your employer does not have access to your medical records. You are also not obligated to share your medical conditions with your employer. As a result, you should never hesitate to file claims for treatment that you seek.

To find the insurance coverage that you need, comparison shop for benefits as well as cost. Check out each policy's SBC for mental health benefits before you make a choice.