Insurance 101

Navigating insurance can be challenging, confusing, and downright frustrating. Out of Network? Superbills? Coinsurance? The following is a straightforward education on all things insurance.

You deserve to understand how this works so you can make informed decisions for your mental health and financial needs.

We have partnered with Mentaya to help clients use their out-of-network benefits to save money on therapy. Use this tool below to see if you qualify for reimbursement for my services.

The Business of Insurance

It is important to know that most insurances are for profit, some are government funded with strict eligibility requirements (i.e. Medicaid, Medicare, etc), with very few nonprofits. If you (like most people) have for-profit insurance, remember that the purpose of this model is to generate profit for the insurance company.

Unfortunately, this means that your insurance may be less selflessly invested in your wellbeing than they seem to be. Insurance can be stingy about covering your healthcare services and may not always be totally transparent. If your insurance company fails to share information with you, or you misunderstand your policy, you are still responsible for the bill.

This is why insurance literacy is important; so you can ask the right questions and understand the answers. This way you can make the decisions that are right for you and your wallet.

Insurance Terms

Insurance has all kinds of industry-specific language that can be hard to understand. The following is an explanation of some common terms you’ll see when you navigate health insurance.

  • A healthcare provider or therapist who is in network with an insurance company has a contract with that insurance company. That means that they are pre-approved to bill and work with your insurance company for services provided. In this situation, the provider bills your insurance directly and receives payment from them at a rate set by the insurance company.

    When a therapist says “I take XYZ insurance” that means they are in network with that insurance.

  • Out-of-network (or OON) providers are NOT contracted with your insurance company and cannot bill the insurance company directly. Most insurances have some OON benefits, and you will need to contact them to find out what they are.

    How it works is you pay your therapist their fee at the time of service. Your therapist gives you a superbill (essentially an invoice) for services rendered at the end of the month. You submit that superbill to your insurance company and they reimburse you directly.

    Please note that the reimbursement rate is a percentage of what the insurance company pays for therapy, NOT a percentage of the therapist’s fee. You will need to ask exactly how much they will reimburse you for therapy.

    An example:

    Your insurance pays in-network therapists $100 per session, and the OON reimbursement is 80%. If you see a therapist who charges $120 a session, you would pay them $120 at the time of service. Your therapist gives you a superbill which you submit to your insurance and await reimbursement. Your insurance company would reimburse you $96. After all, is said and done, you have paid $24 for therapy and your insurance has paid $96.

  • A premium is an amount you pay each month to be on your insurance plan. Generally speaking, a higher premium means lower deductibles, out-of-pocket maximums, copay/coinsurance, etc.

  • A deductible is an amount that you must pay with your own money (AKA out of pocket) for healthcare before your insurance benefits kick in in full. Depending on your individual plan, this amount will differ. After you have met your deductible, your insurance will cover more things. For example, if your deductible is $1500, you will have to spend $1500 on healthcare before your insurance covers more things. It’s important to review your insurance plan so you understand what is covered before and after you have met your deductible. Your deductible resets at the first of the year OR when your term ends. At this point, you will start paying your deductible again.

  • Out of pocket means your own money. This is the maximum amount that you would pay in a year for healthcare services before your insurance would cover 100% of healthcare costs. This resets at the end of the year or the end of your insurance term.

  • A copay is a predetermined dollar amount that you pay a healthcare provider at the time of services. If your copay for mental health counseling is $40, then no matter what your therapist’s fee is, if they are in network with your insurance you would pay them $40.

  • Coinsurance is similar to a copay but rather than a set dollar amount, it is a percentage of the service fee. If your coinsurance is 20% and you see a therapist who charges $200, your coinsurance would be $40.

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Questions to Ask Your Insurance Provider

Surprises can be fun, but not from your insurance provider. We recommend that you call your insurance and ask them the following questions BEFORE starting therapy. This will help you avoid unexpected bills and other surprises.

  • What are my mental health benefits (if any)?

  • How many therapy sessions does my plan cover?

  • Do you only reimburse for certain diagnoses, procedure codes, and/or session lengths?

  • Do I have Out of Network coverage?

  • What is the coverage amount per session?

    (If they ask which code, CPT code 90837 represents the standard 53-minute session.)

  • How do I obtain insurance reimbursement?

  • Is approval required from my primary care physician for receiving therapy services?

  • Am I covered for Telehealth (video) appointments?

  • Have I met my deductible yet? How close am I?

  • Am I covered for associate licensed mental health counseling services (LMHCA)?

The Pros & Cons of Working With Your Insurance

  • Many people cannot afford to pay out of pocket for therapy. Insurance allows people who couldn’t otherwise afford services to see a skilled clinician and get the help they need.

  • As with any company, some are better to work with than others. Some insurances can take weeks or months to pay your provider, may pay unreliably, or pay a very low rate.

    Occasionally, insurance companies request money back after paying your provider, leaving you with an unexpected bill. If insurance pays for a service in error, you are responsible for paying them back. There are things that can be done to prevent this like having a solid understanding of your policy, and what is and isn’t covered.

  • In order for insurance to pay for counseling, your therapist must tell your insurance company what your diagnosis is and what is being done in session. Your insurance company may also access chart notes if they request them. Your privacy is of the utmost importance, and if you use your insurance, unfortunately, the therapist’s hands are tied and we are required to share some of your private information.

  • In order for insurance to pay for your therapy, your therapist must diagnose you with a mental illness and share that information with the insurance company.

    Some people find a diagnosis to be a helpful framework, while others prefer to avoid labels. If you don’t use insurance, you are not required to receive any diagnosis.

    Please note that there are some professions where having a mental health diagnosis could be problematic for your employment. Professions such as pilots, emergency services, and some military careers, could be negatively impacted by having a diagnosis on your record.

  • Insurance, understandably, wants to limit what they pay for. They may limit the number of sessions they will pay for, what types of therapy they will cover, and who you can see (i.e. in-network providers).

    If you and your therapist determine that your unique needs fall outside of the standardized parameters (and they often do), your insurance may not cover it.

  • Even if a therapist wants to take your insurance, they may be unable to. Insurance companies only allow a set number of providers to be in network with them at a given time. Some companies don’t allow new applications for years at a time.

    Not enough providers in your area who take your insurance? You can call your insurance and tell them that! This can really make a difference in when it comes time to decide whether to accept new providers.