Insurance

The basics of health insurance

Put simply, health insurance is a type of insurance that covers some of the costs of medical expenses. In more technical terms, health insurance is a contract between you and a health insurer/health insurance company that requires your health insurer to pay some portion of your healthcare costs in exchange for a premium, which refers to the amount you pay for your health insurance each month.

Types of health insurance: Public and private

There are many different types of health insurance coverage. In the U.S., health insurance can be classified into two main categories: public and private. Within these categories, there are various types of public and private health insurance plans. 

• Public health insurance includes plans that are funded by the local, state, or federal government. Main categories of public health insurance include Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), CHAMPVA or VA coverage, state-specific plans, and the Indian Health Service (IHS).
• Private health insurance refers to health plans that are provided through an employer or union or purchased by an individual from a private health insurance company or through an exchange, such as the Health Insurance Marketplace.

Health insurance plan and network types: HMO, PPO, POS, and EPO

Health insurance plans can also be categorized by the nature of their provider network, which is the group of doctors, other healthcare providers, and hospitals that a plan contracts with to provide medical services to its members. Types of plans include the following: 

• Health Maintenance Organization (HMO): An HMO is a type of health insurance plan that typically only provides coverage for care from doctors and other providers who work for (or contract with) the HMO. Oftentimes, an HMO will not cover care from out-of-network providers except in emergency situations. In some cases, members must live or work within the plan’s service area to be eligible for coverage. Typically, members must also choose a primary care provider who coordinates their care and makes referrals to specialists as needed.
• Preferred Provider Organization (PPO): A PPO is a type of health insurance plan that offers more flexibility than an HMO. With a PPO, members pay less if they visit in-network providers, but they can also visit providers outside of the network without a referral, for an additional cost. 
• Point-of-Service (POS): A POS is a type of health insurance plan that combines some aspects of both HMOs and PPOs. With a POS, members pay less if they visit in-network providers. To see specialists, members typically must get referrals from their primary care doctor. 
• Exclusive Provider Organization (EPO): An EPO is a type of health plan that generally only covers services if the member uses in-network doctors, specialists, or hospitals, except in an emergency. These plans typically do not offer any out-of-network coverage. In general, members are not required to get a referral from their primary care doctor to see other specialists. 

Does insurance cover mental health services?

Most health insurance plans cover mental health services to some extent, but the exact extent of coverage can depend on your plan. In the U.S., there are a number of key federal laws and regulations that protect benefits for mental health and substance use disorders. 

The Mental Health Parity and Addiction Equity Act (MHPAEA), enacted in 2008 and commonly referred to as the federal parity law, requires health insurance plans to cover mental health conditions, including substance use disorders, in a similar way to other medical conditions. This means that insurance coverage for mental health conditions can be no more restrictive than other medical conditions, and that the financial requirements (such as copays) need to be similar in cost. In other words, mental health benefits must be comparable to benefits for other medical conditions. 

While the MHPAEA requires these benefits to be treated comparably, it does not require group health plans or health insurance issuers to cover mental health and substance use disorder benefits. However, the Affordable Care Act (ACA) of 2010 builds upon MHPAEA and requires coverage of mental health and substance use disorders as one of ten essential health benefit categories in non-grandfathered individual and small group plans. 

For larger employer-sponsored insurance plans, the situation is slightly different. In 2013, a final regulation implementing MHPAEA was issued that applies to non-federal governmental plans with more than 50 employees, and to group health plans of private employers with more than 50 employees. The regulation does not require these group health plans to provide benefits for mental health and substance use disorders, but if they do, the plans must not include financial requirements and treatment limitations that are more restrictive than those for other medical and surgical benefits. Beyond these federal laws and regulations, some states have their own laws that require some level of coverage for mental health and substance use disorders.

Understanding your insurance coverage 

Understanding the key laws and regulations regarding health insurance can give you a general sense of the broader landscape of mental health coverage, but ultimately, the exact benefits and coverage limits for mental health services will depend on your specific health insurance plan.

To better understand the details of your insurance plan, consider the following steps:

1. Determine what services are covered by your policy: Start by reviewing your plan documents (such as your Summary of Benefits) to understand exactly which services your policy covers. If you have questions, consider reaching out to your insurance company; you can often find the appropriate phone number on the back of your health insurance card. 
2. Determine how much coverage you have for each service: If you are seeking a particular service, check to see if that service is covered by your plan and exactly how much coverage is offered. For instance, if you are seeking therapy, does your plan have a fixed maximum number of sessions for the year? 
3. Understand which providers are in-network vs. out-of-network for your plan: Depending on the type of plan you have, your plan may only cover services if you receive care from in-network providers, or it may cover both in-network and out-of-network providers, with out-of-network providers at a higher cost. Understanding the particular details of your coverage and which providers are in-network vs. out-of-network can be important for finding services that fit both your needs and budget. Many health insurance plans have online portals and directories that allow you to search for in-network providers.
4. Understand any particular rules or restrictions regarding obtaining coverage for services: Finally, it can be important to understand if your plan has any particular requirements that you must adhere to before receiving coverage for a particular service.  For instance, do you need a referral, diagnosis, or prior authorization for a particular type of mental health treatment?

If you are confused about the benefits or limits of your plan, there are various resources available that may be helpful depending on the type of plan you have. In general, contacting your insurance company’s member services department can be a helpful place to start. If you have health insurance through your employer, your company’s human resources department may be able to offer additional insight into the details of your plan. And if you have a health insurance plan through the Health Insurance Marketplace, you may find it helpful to connect with a certified navigator, licensed insurance agent, or broker.

Understanding insurance costs

When choosing your insurance plan or seeking services covered by your plan, it can be important to understand the various costs associated with your plan. Health insurance plans can involve a number of different costs, including the following: 

• Premiums: These are the monthly payments you must make to your insurance plan to have health insurance. 
• Deductibles: These refer to how much you will pay for certain covered health services before your plan starts to pay, with the exception of free preventive services. 
• Copayments: These refer to the fixed amounts you pay for covered health care services after you have met your deductible. 
• Coinsurance: Coinsurance refers to the percentage of costs of covered health services that you pay after you have met your deductible. 
• Out-of-pocket maximum: The out-of-pocket maximum refers to the maximum amount you have to pay for covered health services in a plan year; after you have spent this amount (on deductibles, copays, and coinsurance, but not premiums), your health plan pays 100% of the costs of covered benefits. 

Finding therapy covered by insurance

If you have health insurance and are interested in seeking therapy, finding therapy covered by insurance may be a priority for you, as it can help reduce the overall cost of therapy. There are a number of different ways to find therapy covered by your insurance plan:

• Check with your insurance plan directly to find in-network providers offering therapy services. 
• Use online listings or directories to search for providers who accept your insurance plan. 
• Ask your primary care provider for a referral for an in-network therapist. 

If you are interested in online therapy, you can also consider platforms such as BetterHelp, which has begun working with select insurance carriers to join their network; some therapists on the BetterHelp platform now accept insurance (state-limited). 

Other ways to make therapy more affordable

In addition to using insurance to pay for therapy, there are a number of other strategies and options you can consider that may help make therapy more affordable. 

• Use an HSA/FSA: If you have an HSA or FSA, you may be able to use the pre-tax dollars in your HSA/FSA funds to pay for eligible healthcare expenses, including online therapy.
• Seek providers offering sliding-scale fees or financial aid: Some therapists may charge sliding-scale fees based on income, and some providers or platforms (such as BetterHelp) may offer financial aid in some situations. 
• Consider online therapy: Typically, online therapy tends to be more affordable than in-person therapy, so seeking care online may help you reduce costs while still receiving professional, high-quality support. 
  
  

Frequently Asked Questions (FAQs) 

How do I see if a therapist is covered by my insurance? 

To determine if a therapist is covered by your insurance plan, you can check with your insurance plan directly and check with the therapist to see if they accept your insurance. 

What mental health services are commonly covered by insurance? 

The exact mental health services covered by your insurance will depend on the details of your particular health insurance plan. In many cases, health insurance plans may cover mental health services such as therapy, psychological testing, prescription medications, and inpatient and outpatient services.

What is the Mental Health Parity law?

The Mental Health Parity law, officially the Mental Health Parity and Addiction Equity Act (MHPAEA), is a federal law in the U.S. that was enacted in 2008, requiring insurance coverage for mental health conditions to be no more restrictive than for other medical conditions.

What is a deductible for health insurance?

In health insurance, a deductible is the total amount you will pay for certain covered health services before your plan starts to pay.

What is the difference between HMO and PPO? 

An HMO, or Health Maintenance Organization, is a type of health insurance plan that typically only provides coverage for care from doctors and other providers who work for or contract with the HMO. In contrast, a PPO, or Preferred Provider Organization, offers more flexibility than an HMO. With a PPO, members pay less when visiting in-network providers, but they can also visit providers outside of the network without a referral, just for an additional cost.