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Does Insurance Cover Therapy? How to Use Your Insurance for Counseling Services
For Patients

Does Insurance Cover Therapy? How to Use Your Insurance for Counseling Services

Make sure your insurance covers therapy

A much larger emphasis has been placed on mental health in recent years than ever before. But a significant number of patients are on the fence about counseling because they aren’t sure if they can find therapy covered by insurance. If you are one of the millions of Americans asking yourself, does insurance cover therapy, this post will help clear up your doubts.

The short answer is yes. But finding therapy covered by insurance can get a bit complicated. Some mental health professionals are in-network, meaning they accept your insurance plan. Then there are out-of-network therapists you pay out of pocket. Either way, you need to know how to use your health insurance benefits. 

In this post, we’ll answer your insurance questions like does medical cover therapy, advise you on finding therapists who are covered by insurance, and how to get reimbursed when your provider doesn’t accept your plan. SuperBill works with a wide variety of out-of-network therapists, and we’ll give you the knowledge you need to find a therapist who is right for your counseling needs. 

Are therapists covered by insurance?

Yes. The Mental Health Parity and Addiction Equity Act of 2008 requires insurance plans to provide mental health care just as they would physical health care. In theory, mental health care is the same under the law as any health care. But in practice there are a few limitations. 

First, insurance will often only cover certain kinds of therapists. Many therapists need a certain type of licensure to be accepted to an insurance panel, i.e. to join an insurance network. They have to pass several exams and interviews to be approved to be in-network, and the process can slow a new practice down considerably. So, many therapists opt out of insurance networks altogether, meaning they are considered exclusively out-of-network. 

(Before reading on, make sure you understand the difference between in-network and out-of-network.) 

In short, an in-network provider has a contract with your insurer, so your insurer pays them directly for your healthcare. It is highly likely that some therapists belong to your network. You can call your insurer to ask, or scan a list of their approved providers on their website or app to find an in-network provider.

However, in some instances the list may be short. When it comes to therapists, many insurance networks remain understaffed, even as their patient numbers grow. We wrote about this in detail in The Case for Out-of-Network Reimbursement. Because of the scarcity of in-network therapists, you might be looking at just one or a few options for your mental healthcare. And even if you find a therapist in your network, your insurer might not cover your therapy sessions unless you have the requisite mental health diagnosis.

What about out-of-network therapy?

All of this means that if you want to find a therapist nearby, avoid long wait times, or seek care from someone who specializes in your unique mental health needs, you may have to go out-of-network. Which means finding a provider who does not have a contract with your insurer. Seeing a therapist outside your network requires paying out-of-pocket. In other words, out-of-network (OON) providers do not have a contract with your insurer, so you must pay them directly. 

But paying out-of-pocket does not necessarily mean that you have to cover the entire cost of therapy yourself. Many health insurance plans offer OON benefits. So, after you meet your OON deductible, you’ll have a coinsurance rate—a percentage you’re responsible for—and your insurance will reimburse you for the rest. 

Some plans will cover up to 80% of your costs, meaning you would only have to pay for 20% of the cost of your therapy sessions once you’ve met your deductible. Some of the most comprehensive plans even cover 90% of your expenses! You may already have more coverage for OON therapy than you knew.

Do therapists take insurance even when they are not part of any network?

Many therapists choose not to join any insurance network. They only accept payments out of pocket, even though they are fully licensed healthcare professionals. There are plenty of reasons why a therapist might do this. 

For one, the process for joining an insurance network’s panel is very time-consuming. A therapist trying to grow their practice might not want to invest their time and resources into jumping through the insurance network’s hoops. Another reason is that therapists have to give up some freedom—and often some money too—when they join an insurance network. Insurance networks are often so short-staffed that therapists have to work more in-network, without the corresponding increase in profits they would get with a private practice. 

Therapists who do not join a network can only be paid out of pocket. Essentially, they are full-time out-of-network providers. So, you can visit them, pay out of pocket, and file a claim for reimbursement with your OON benefits. 

Remember that the therapist best suited to your unique needs may not belong to a network. Even if you have to pay more to see them, it might be worth it to get the care you deserve. 

Does health insurance cover therapy differently for mental health conditions?

Yes. A mental health diagnosis can greatly alter your therapy reimbursement. As we mentioned before, a diagnosis may expand your network to cover a greater number of mental healthcare providers. It may also allow you to seek the care of out-of-network specialists to whom you would not otherwise have access. 

Some of the main qualifying diagnoses include: 

  • Anxiety
  • Depression
  • Phobias
  • Acute stress
  • Insufficient sleep syndrome

If you already have one of these or a similar diagnosis, call your insurer and/or consult your plan’s website to find out how it might affect your benefits. Your therapist may be able to help too. If you do not have one of these diagnoses, and are not currently in therapy, your primary care provider is likely the best person to direct you. 

What insurance covers therapy the best?

To determine what insurance covers therapy, let’s look at some of the differences between insurance plan types. In this post, we will just focus on the two types of plans that are most likely to reimburse you for therapy, Preferred Provider Organization (PPO) and Point of Service (POS) plans. To learn about the differences between HMO, PPO, POS, and EPO plans in more detail, read How to Choose a Health Insurance Plan That’s Right for You

What are PPO and POS plans used for?

PPO and POS plans tend to have the best out-of-network coverage, so they are the most likely to get your therapy covered by insurance. Other plan types usually only reimburse you for OON services in emergencies. Meaning, for instance, if you see a therapist on a Health Maintenance Organization (HMO) plan, they will likely need to be in your plan’s network for the service to be covered. 

If you have either type of plan, call your insurer or consult your plan’s website to determine your coinsurance percentage for OON services like therapy. Or use SuperBill’s out-of-network benefits calculator. Chances are good that you do have insurance for counseling. Once you have met your deductible, you will need to send your insurer a therapy superbill. Then you can be reimbursed for up to 80% or even 90% of the costs, depending on your plan’s coinsurance.

The differences between PPO and POS plans

The main difference between PPO and POS plans tends to be whether or not you need a referral to see a specialist. Usually, no referral is needed with PPO plans, while POS plans do require a referral. This means that if you have a POS plan and want to find counseling covered by insurance, talk to your primary care physician about counseling before you see a counselor. Your PCP may be able to find you an in-network counselor, saving you money. 

However, if you do expect to see an out-of-network counselor, a PPO plan is usually the most affordable option. This is because PPO plans tend to have better coinsurance rates for patients than POS plans. PPO plans are designed to serve patients who seek a high amount of specialist care. So, they are generally the best bet for therapy patients, because they offer more options than HMO plans and better reimbursements than POS plans. But because plan details can vary a great deal, make sure to check a plan’s out-of-network benefits before making any big decisions. 

How to find counseling covered by insurance

Now for the financial aspects of how to find therapy covered by insurance. We organized your main options from cheapest to most expensive. But know that costs can vary greatly, so this list is just a starting point. (We offered some less financial, more conceptual advice on this topic in Finding a Therapist.)

Option 1: Counselors in your network

As we mentioned before, most insurance plans have a list of approved mental health providers in their network. Start there if you want the cheapest option. Because of the scarcity of mental health providers we mentioned earlier, you may have a narrow set of providers to choose from. 

If you choose an in-network provider, your insurer will cover a greater percentage of your costs. And your in-network deductible is almost certainly lower than your out-of-network one, so your benefits will kick in sooner. Note that the American Psychological Association has a tool for finding counselors in your area. The APA’s locator lets you see whether or not they accept insurance, and if so, what network they belong to.

Option 2: Out-of-network counselors with pre-authorization

If you need a specific mental health service, but there is not a specialist in your network who can provide it, your plan may offer something called pre-authorization. Pre-authorization entails a note from your insurer authorizing you to receive a certain OON service at an in-network rate. It may be a useful option if you are seeking a highly specific service, like EMDR. 

Pre-authorization can save you a lot of money. Unfortunately, it is a time-consuming process, and many insurers can be stubborn about it. However, if your pre-authorization is rejected, you may still have a chance to pay an in-network rate with Option 3.

Option 3: The network exception

A network exception is very similar to a pre-authorization. Also known as a gap exception or a network deficiency, it is a tool health insurance companies use to compensate for gaps in their network of contracted healthcare providers.

As with pre-authorization, if you are granted a network exception you will pay in-network prices for out-of-network services. The difference is that while a pre-authorization refers to specific services, a network exception refers to providers. Still, the terms may be used interchangeably by your insurer. If you are seeking a specialized form of therapy, contact your insurer to see if you can receive a network exception. It may save you a great deal of money.

Option 4: Paying entirely out of pocket

While this option is likely the most expensive one, it does offer the greatest freedom. Technically, you can see any counselor you wish to see, regardless of your insurance plan. Some states have restrictions on therapy across state lines, but assuming you are staying in-state, you have the freedom to see any therapist you wish. 

This option is useful for anyone seeking a specific type of therapy that cannot be pre-authorized, because greater selectivity can make a big difference. If your insurer will not grant you a network exception, you can always pay out of pocket and submit your superbills for reimbursement. 

What to do if you can’t afford therapy

The cost of therapy can be an issue for a lot of patients. This is completely understandable. If you are concerned about how to afford therapy, you are certainly not the only person in this boat. Most therapists have encountered this situation plenty of times. 

For that reason, many therapists accept payment on a sliding scale. The key is communication. Don’t be afraid to ask your therapist if they can offer you a discounted rate. If you do not ask, you will never know the answer. 

With the recent push for greater access to mental health care, some therapists even make it their mission to provide therapy at every price point. You can also ask the provider if they know anyone offering more affordable mental healthcare. Most therapists would be happy to refer you to someone who better suits your financial situation. 

Lastly, and we cannot say this enough: double-check your out-of-network benefits. You may be surprised by how much of your therapy costs your insurer has agreed to cover. Often, patients throw away their superbills when they should be saving them to file them for reimbursement! People make the mistake of assuming their plan does not cover OON therapy services, leaving money on the table.

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About the Author

Harry Gatlin

Harry is passionate about the power of language to make complex systems like health insurance simpler and fairer. He received his BA in English from Williams College and his MFA in Creative Writing from The University of Alabama. In his spare time, he is writing a book of short stories called You Must Relax.