Simplifying the Baffling World of Health Insurance

In Network. Out of Network. Copays. Co-Insurance. Out of pocket. Reimbursement. Deductibles.

As therapists we have been doing this for years, and we still get tongue tied. Once you understand the concepts and definitions, you may find you can afford premium healthcare.

One of the biggest hurdles is understanding your mental health benefits. Not all health care plans are the same. Different plans allow for different coverage. Some plans do not cover mental health services, but most do. Before you start therapy, it is important that you understand the costs so that paying does not hinder your ability to attend regularly (keep that momentum going!). You can find information about your particular benefits by signing into your insurance carriers website, calling the member hotline (found on the back of your card), or contacting your HR Department. Click here for questions to ask.

You also need to verify if your mental health coverage includes out-of-network benefits, or if your coverage limited to only in-network coverage. If your plan does not cover mental health services, then you will need to pay for therapy out of pocket. If your health care plan allows for only in-network therapy, your therapist will need to accept your insurance or you can choose to pay out of pocket. Verify with your therapist if they are an in-network or out-of-network provider.

If your plan allows out-of-network mental health care, then you can see a therapist of your choice. In most cases, you will need to pay for the entire therapy session upfront and out-of-pocket. You will then be responsible for submitting an insurance claim to your insurance company for reimbursement. Generally speaking, you will only be reimbursed a portion of the total cost, anywhere between 25% and 80%. For example, if a session costs $200, you will pay your therapist $200, your therapist will send you an invoice, you will either mail the invoice to your insurance carrier or upload the invoice to your insurance carrier’s website. Finally, they will mail you a check for between $50-$160. It sounds complicated but once you do it once, it is relatively straightforward.

Let’s get into specifics.

Generally speaking, there are 3 types of insurance:

HMO (Health Maintenance Organizations) - Only provide in-network healthcare services. As part of an HMO, you need to designate a primary care physician (PCP). This physician is your gate keeper, and needs to approve you to go and see another healthcare service such as a therapist. This therapist must be in network to be covered by your insurance. This is the most restrictive type of health care plan.

EPO (Exclusive Provider Organizations) - Only provide in network healthcare services. With EPO you generally do not need a primary care physician (unless your plan in “gated“). You can seek out additional healthcare services on your own, such as a therapist. This therapist must be in-network to be covered by your insurance. This is less restrictive than HMO health care plans.

PPO (Preferred Provider Organizations) - Provide in-network and out-of-network health care coverage. Out-of-network coverage has a higher out of pocket cost, but PPO’s will cover some portion of it depending on your plan.

POS (Point of Service Plans) - You need to have a PCP, but they can refer you to out-of-network health services. Some portion of the expense may be paid by your insurance company, depending on your health care coverage.

Below is a list of all the terms to help you understand your healthcare benefits.

PREMIUM - The amount you pay the insurance company each month to have health insurance.

DEDUCTIBLE - The total amount of money you have to pay out of pocket before your insurance benefit starts. Typical deductibles are between $500 and $5000. So let’s imagine an in-network therapist charges $100 per session, and your deductible is $500. You would have to pay your therapist $100 for 5 sessions out of pocket, before your insurance company would begin to pay.

IN-NETWORK - This refers to therapists that are covered by your insurance plan. Insurance companies typically dictate the fee that therapists can charge their patients.

OUT-OF-NETWORK - This refers to therapists NOT covered by your insurance plan. Your insurance plan may still provide some coverage for out-of-network therapy.

COPAY - This is the amount of money that you owe every time you visit your in-network therapist. It is typically between $10 and $50 per visit.

OUT-OF-POCKET - The money that you need to pay directly to your provider.

REIMBURSEMENT - This is the money that your insurance company repays you after you pay your therapist in full. Typically this occurs for out-of-network therapists that do not take insurance. You pay the entire session fee yourself out-of-pocket, then submit an insurance claim to the insurance company to get reimbursed for the out-of-network treatment. This only works if the your insurance plan covers out-of-network therapy.

PCP (Primary Care Physician) - Doctors that act as the gate keepers to other health services. In the cases of plans where a PCP is required, you must have them “OK” you to see another healthcare professional.