Mental Heath Insurance – To Claim or Not to Claim?

Mental Health Insurance

Mental Health Insurance:

Before the millennium, many Americans lacked mental health insurance. The Affordable Care Act (aka, Obamacare) expanded on the Mental Health Parity Act to require most insurance plans to cover therapy and treatment for psychiatric disorders. With it, millions of American had new access to behavioral health coverage, insurance that would pay (at least partially) for mental health services.

With increased coverage comes more frequent discussions about what using this coverage entails. What does it mean to have a diagnosis on record? Can your employer (assuming you have health insurance through your employer) access your insurance claims? What are the pros/cons to submitting claims for mental health services?

Pros to Using Health Insurance:

The benefits to using your health insurance for mental health services are largely financial. You pay for your insurance, and with this, comes the coverage it provides. If you see an in-network provider, you might be required to pay just a copay (following meeting your deductible, if applicable). Copays (or coinsurance, as some plans use) have a large range (I’ve seen $0-$65) and seem to be trending up over time. If you see an out-of-network provider, you would likely get reimbursed a portion of the out-of-pocket fee you pay up front (again, following meeting the deductible). The reimbursement is usually a percentage of the visit, but note that insurance companies will reimburse what they think the visit should cost (i.e., “usual and customary”), not what your provider charged and what you paid, so the percentage reimbursed might be lower than anticipated.

Again, the main argument for using your health insurance to pay for therapy, intensive treatment, etc. is to save you money. You’ve paid your premiums, and you’re entitled to the benefits that come with your policy. For most Americans, ongoing therapy is a major expense made possible only by the use of behavioral health coverage.

Cons to Using Health Insurance:

The most significant con, in my opinion, to using mental health insurance is that once a diagnosis is on file with an insurance company, this information is no longer private/confidential between therapist and client; it becomes “out there,” on record. Can your employer access and review your health insurance claims? No, not according to HIPAA. But, once information leaves a therapist’s office, the therapist can no longer guarantee its security. We guard information according to HIPAA and only release records with permission and/or a court order, but we can’t protect the information once it’s out of our hands.

Additionally, once a diagnosis is recorded with an insurance company, that diagnosis is officially “on file.” What this might mean for securing healthcare coverage in the future remains to be seen. Having a diagnosis, and particularly certain diagnoses, might make it more challenging to acquire health insurance, life insurance, and other future policies. Parents might be particularly concerned about a entering a diagnosis on record for their children.

Finally, if insurance companies are paying for treatment, they might want to limit coverage and payment. They might want to dictate the duration of treatment or how frequently therapy occurs. To do this, they might request detailed records (beyond just the diagnosis required for reimbursement), and the therapist and client would have to decide together if submitting more personally detailed information would be more helpful or harmful.

The Bottom Line:

As evidenced above, it can be difficult to decide whether or not to submit mental health claims to insurance for coverage/reimbursement. Some clients might choose to pay out-of-pocket (seeking out sliding scale providers in many cases); others might choose to use employer-based HSA or FSA plans, which require documentation of a doctor’s visit but don’t require a diagnosis on file. These plans won’t cover the mental health visits, but they will allow you to pay for the services pre-tax. Whether or not you choose to use your insurance benefits is an individual decision that requires carefully weighing the pros and cons.

To learn more about the pros/cons of using your mental health insurance, contact us at Gatewell.