Health Insurance 101
Does insurance make you want to tear your hair out? When you hear about copays, deductibles, coinsurance--do you want to bolt and run?
I hear ya. That used to be me. Then I started interacting with insurance as a provider, and now I believe it's so empowering for you to understand clearly. When you know what your coverage is and what you will owe for services, you're way more likely to actually get the help you need! I'm all about that.
So here we go. Insurance 101.
You have a PREMIUM. This is what you (or your employer, or a combination of both) pays each month to your insurance company for your plan. Pretty simple. This premium collected by your insurance carrier is how they cover costs for any claims they have to pay out for all of their members.
Unless you have the world's best insurance, you will have a COPAY or COINSURANCE for services. A COPAY is a set rate that you pay (like $20) for services, no matter what the provider's rate is--your insurance covers the rest. COINSURANCE, is a percentage of the provider's fee that you pay (like 20%) and then your insurance pays the rest (80%).
Depending on your plan, you might *only* have to pay a copay or coinsurance for services. Lucky you! However, more and more plans lately have a DEDUCTIBLE. This is an amount your insurance plan sets that you have to pay out of pocket before they cover anything. (Usually, the deductible does not apply to preventative care like your yearly wellness check and sometimes for mental health services like therapy, but check your specific plan for details.) This means you'll pay 100% of the provider's fee until you've paid as much as your deductible, and THEN your copay or coinsurance rates apply.
Example: You have a $1500 deductible that applies to therapy services. After your deductible, your insurance pays for 60% of the providers fee, and you have a 40% coinsurance. Your therapist's rate is $120 a session. You pay the full amount for 12 sessions, and at that point you’ve paid up to your deductible amount of $1500. (A note here: insurance companies don't actually care how quickly you pay your provider, so you can work out a payment plan for this part! Your deductible will still be counted as “met” by your insurance even if you haven’t actually paid that total amount to your provider. Feel free to ask your provider if they offer payment plans for situations like this--most will. I do this all the time for our clients!) Once you’ve met the deductible, then your coinsurance kicks in, and you only owe 40% each session, or $48. Yay! That happens until the plan year resets and you start the deductible over again.
Typically, you will have different coverage for an IN NETWORK provider than an OUT OF NETWORK provider. Insurance companies have a panel of providers that they contract with. When providers contract with insurance, they agree that the insurance carrier can adjust the provider's rates. This insurance-determined rate is called a “contracted rate” or “reimbursement rate”.
Because in-network contracts mean lower reimbursement rates, your out of pocket cost will be slightly lower when you see an in-network provider (also because your in-network benefits typically cover more than your out of network benefits do). Many therapists choose to be out of network because these in-network reimbursement rates are low, rates are not raised often, and insurance companies don’t really negotiate their rates.
Another issue with in-network billing (as well as out of network billing) requires that your provider give you a diagnosis. In addition, when using your in-network benefits, your insurance company has control over how often and how long you see your provider, as well as the approach your provider takes in therapy.
Out of network providers do not have a contract with your insurance company, so their rate will not be adjusted down*, but the services might still be covered by your plan at some level. Typically, with out of network benefits, there's a deductible and then some level of coinsurance. Again, it varies from plan to plan, and also depends on the provider. Out of network services also require a diagnosis, but your insurance company has less control over the therapy process.
Some therapists opt to provide you with superbills for out of network therapy. At Riverbank Therapy, we do courtesy billing because we find it is easier on you as the client. Read more about superbills and courtesy billing here.
*some plans are now implementing an “allowed amount” with out of network providers. This means that if your session fee is $150, the insurance carrier may only apply part of that fee (the “allowed amount”) to your deductible, and you’re still responsible for the rest of the session fee. This means it can take a bit longer for you to meet your deductible. Again, check your specific plan or talk with our admin team to find out if your out of network benefits include an allowed amount for sessions or not.
Read more about how Riverbank Therapy works with insurance on our Investment page.
Your plan will likely also have an OUT OF POCKET MAX for the plan year. This means that you pay your deductible and copays/coinsurance up until you've paid up to the amount of your out of pocket max (ex: $5000) and then you are 100% covered! This is regardless of in or out of network providers for most plans. If you utilize your insurance coverage more frequently, you’re more likely to meet this out of pocket max.
You can pay your copays, coinsurance, and deductible payments with an HSA or FSA account. This is an account that you, and possibly your employer, contribute pre-tax dollars to that are specifically intended for healthcare expenses. You can use an HSA or FSA account for both an in-network and an out of network provider.
Read more about billing insurance for couples counseling here.
This is a BRIEF AND INCOMPLETE overview of insurance policies, based on my experience with insurance in outpatient therapy in the United States. It's complicated, but can be simplified when you know what to look for and what all the words mean. I want to empower you to know what your benefits are so you can get support when you need it, and not be fearful of what it will cost! I encourage you to check your individual plan for specific details.
At Riverbank Therapy, we will be clear with you up front about your insurance coverage, so you don’t have any surprises when it comes to cost. Clarity is important, especially with finances! If you are interested in therapy and want to use your insurance, but aren’t quite sure what your benefits and coverage are, feel free to reach out and we can help you decode your policy documents.