Therapy can significantly boost your overall well-being and sometimes even life-changing, but let’s face it – it can also be a bit pricey. That’s where insurance comes in! In this guide, I’m going to help you navigate the world of insurance for therapy so you can make the most of your benefits and get the help you deserve. 

How Insurance for Therapy Works

So, you’ve got insurance – awesome! But not all plans cover therapy services, so it’s essential to check with your insurance provider to determine what’s covered. Some plans offer PPOs, HMOs, and EPOs, but what does that even mean? Don’t worry – we’re not going to get overly technical here.

The most important factor when it comes to insurance coverage for therapy is whether the therapist (AKA the provider) you’d like to work with is considered in-network or out-of-network with your insurance plan. A therapist is considered in-network if he or she is contracted with your insurance company and has agreed to provide services at a discounted rate to individuals covered under your specific plan. Conversely, a therapist is considered out-of-network if he or she is not contracted with your insurance company.

Why does this matter? Let’s say you identify two different therapists you’re interested in seeing. Therapist A is in-network with your plan, while Therapist B is out-of-network. Let’s also assume both providers have the same out-of-pocket fee of $150 for a standard therapy session. Because Therapist A is contracted with your insurance company, the most you’ll end up paying is her contracted rate, which may be closer to, say, $120 per session. With therapist B, you’d need to pay her full out-of-pocket fee of $150.

(Note that some plans do provide out-of-network benefits, in which case you may still be able to recover a portion of your out-of-pocket expenses, but we’ll dive into this more in a second.)

Insurance Terminology for Therapy

Let’s be real – insurance jargon is like a foreign language that nobody really wants to learn. It’s all fun and games until you accidentally sign up for a plan that only covers injuries sustained while juggling chainsaws.

Here are the 4 most important insurance terms you need to know and what they mean:

Copayment: A fixed amount you pay for a covered service, usually due at the time of your therapy session. This is like buying a ticket to the therapist party – you pay your way in, and insurance covers the rest.

Deductible: The amount you must pay out of pocket for covered health services before your insurance coverage begins. This is like paying the cover charge to get into the club – once you’ve paid enough, insurance starts picking up the tab, or at least a portion of it (see coinsurance below). Just keep in mind that your deductible resets once per year, often on January 1, but not always.

Coinsurance: The percentage of the cost of a covered service (therapy in this case) that you’re responsible for paying after your deductible has been met. The most common split is 80/20, in which case you’d pay 20% of your therapy fees with your insurance paying the other 80%.

Out-of-pocket maximum: The maximum amount you’ll have to pay out of pocket for covered services during a plan year. Once you reach your out-of-pocket maximum, it’s like you’ve won the therapy jackpot – insurance covers 100% of the cost of covered services until your deductible resets.

How to Verify Insurance Coverage for Therapy

Verifying insurance coverage for therapy can be a bit of a headache, but it’s worth it to understand your benefits before starting therapy. Trust me when I say, you don’t want to find yourself 4 or 5 appointments in only to discover your plan doesn’t cover the services you’ve been receiving. Not that I would know anything about that. 

You can typically verify your coverage by contacting your insurance company directly. The easiest way to do this is to call the member services number listed on the back of your insurance card. Almost all insurance companies have moved to automated phone services to provide benefits information. The trouble is, these automated systems usually only muddy the waters more.

Pressing “0” or saying “speak to a representative” can help you get in touch with an actual human. Once you do, here are the questions you’ll want to ask:

• Does my plan cover mental health (or behavioral health) services?
• What is my copayment or coinsurance for mental health services?
• Are there any deductibles or out-of-pocket maximums that apply to mental health services?
• Do I need pre-authorization or prior approval for mental health services? (Uncommon, but still worth asking.)
• And assuming you know the therapist you’d like to work with: Can you confirm that the provider is in-network with my plan?

While your therapist or their office will likely verify your coverage to determine what to charge you at the time of your therapy sessions, it’s important to speak with your insurance company directly. Any payment discrepancies will ultimately be your responsibility, not your therapist’s. 

Tips for Maximizing Insurance Coverage for Therapy

Now that we’ve covered the basics, here are some tips to help you make the most of your insurance benefits for therapy:

• Select an in-network provider: In-network providers are like the friends who offer to carpool – they’ll get you where you’re looking to go and save you some cash along the way.
• Obtain pre-authorization for therapy services: Some insurance plans require pre-authorization before they’ll cover therapy services. Think of it like getting permission from the principal to go on a field trip – It’s a hassle, but worth it in the end.
• Utilize your out-of-network benefits: Many plans include coverage for therapy with out-of-network providers, which opens the door to working with almost any licensed therapist at a reduced cost. Using your out-of-network benefits just works a little differently: you pay for your sessions out of pocket and then submit a statement (or superbill) provided by your therapist to your insurance company for reimbursement according to your benefits.  
• Use your Health Savings Account (HSA) or Flexible Spending Account (FSA): If you have an HSA or FSA, you can use it to pay for therapy services. Think of it like using a coupon – you’ll save some cash and still get the same great service.

FAQs about using insurance for therapy

Do I need a referral from my primary care physician to see a therapist?

It depends on your insurance plan. Some insurance plans require a referral from your primary care physician (PCP) before they will cover your therapy services. Check with your insurance provider to find out their requirements.

How do I find a therapist who accepts my insurance?

You can ask your therapist if they accept your insurance and if they are in-network or out-of-network. In some cases, however, a therapist may be considered in-network with some plans your insurance company offers and out-of-network for others. A safer option is to search for a therapist who accepts your insurance through your insurance provider’s website or, better yet, by calling their customer service line.

How many therapy sessions will my insurance cover?

The number of therapy sessions your insurance will cover varies by plan. Check with your insurance provider to find out how many sessions they will cover and if there are any limitations or requirements.

Can I use my insurance for therapy if I don’t have a mental health diagnosis?

It depends on your insurance plan, but most plans require a diagnosis for coverage to apply. The reason why is that insurance companies generally want to know that the services you’re receiving are “medically necessary.” It’s worth talking to your therapist, ideally before starting therapy, about any concerns you might have about receiving a mental health diagnosis. If financially feasible for you, paying for sessions out-of-pocket will eliminate the need for your therapist to issue a formal diagnosis.    

Final Thoughts

Using insurance for therapy can be a bit overwhelming, but it doesn’t have to be. By understanding your insurance benefits and terminology, you can make the most of your coverage and save yourself some cash. Plus, you can get to work on improving your well-being. So go ahead, book that therapy appointment, and let your insurance benefits do the rest!

Looking for a therapist in Charlotte, NC? Give us a call at 704-800-4436 or shoot us an email to learn more about our practice and how we can help.