Facts About Using Health Insurance for Counseling Services

With the increased cost of insurance premiums and high deductibles many people feel that therapy is an expense that they cannot manage without it. The truth is, when insurance companies contract with a provider then the provider has to charge a set rate for services, even for cash clients. Additionally, the insured has to pay the contract cost of services until their deductible is met, then may have to pay an additional 20-30% co-pay, this will not save you money each year UNLESS you are scheduled to have a procedure (surgery), the birth of a child, etc. because you will not meet your deductible otherwise. For example, a therapist may charge $85 for a private, self-paying client (not accepting insurance) but if the therapist is contracted with an insurance company they will have to charge the 'discounted rate' to the client until the client reaches their deductible, that discounted rate may be $120. As you can see, if you are not going to reach your deductible within the year, you are not saving money by using your insurance for therapy services. Many insurance companies have incorporated preventative services covered at 100% which is wonderful. However, it leaves you with a hefty bill for other services. Furthermore, many insurance companies do not allow you to apply prescription expenses to your medical deductible, which prevents you from reaching it sooner in the year. 

What are the risks of using your health insurance?

  • They require a diagnosis of a mental illness and prove that it impacts your day-to-day functioning, which becomes part of your medical record. Many people who seek counseling do not have a mental illness, they are simply facing struggles of life in a fallen world. 

  • A diagnosis does not guarantee payment. An insurance provider may provide you with a 'quote of benefits' as well as an, authorization of services' but they still have the ability and authority to deny coverage, ultimately leaving you responsible for services provided regardless of the quote or authorization. 

  • Insurance companies determine the course of treatment based on best practices and evidence-based research according to the diagnosis given. Dependent on the diagnosis and the insured's benefits, a company may only pay for 6-10 session to treat anxiety or depression. 

  • Pay attention to procedure codes, which tell the insurance company how the the therapy happened and diagnosis codes, which tell the insurance company the mental illness the patient is being treated for (how they determine if treatment is medically necessary). 

I encourage you to investigate all options and arrive at an informed decision regarding your health care BEFORE using your benefits. That may mean using your insurance, and it may mean making another choice. You can always decide to use your benefits, but you cannot “undo” many of the negative consequences of using them.