Therapy: To Use Insurance or To Not Use Insurance?

As mental health awareness has increased the request for mental health services has in turn increased, and this has resulted in a push for medical insurance companies to cover the cost of these services. For many, this has been a heavy burden lifted, as out of pocket costs for any service, medical or psychiatric or otherwise, can add up to be an unreasonable undertaking. For those individuals that rely on regular mental health services to maintain quality of life, increases in insurance coverage has been overall a huge positive.

But is utilizing insurance for mental health services always the best option? Are there any downsides to using medical insurance for your therapy?

The short answer is that no, it may not always be in one’s best interest to use medical insurance for therapy, and yes, there are some hidden downfalls that not many providers talk to their clients about. Let’s talk through some things to consider before using your health insurance for your therapy costs.

First off, let’s keep in mind how health insurance works. Health insurance provides coverage for a portion or all of the costs of a physical or mental illness, based on medical necessity. Health insurance is not preventative. Some plans allow for a visit or two a year of “routine” medical care, but are otherwise agreeing to provide coverage if a service is necessary to perform in order to restore health to an individual.

Are therapy services considered a “medical necessity”? Well, it depends.

Insurance companies decide whether or not a service is covered based on the diagnostic code a provider submits. These diagnostic codes come from the Diagnostic and Statistical Manual of Mental Disorders. A client MUST meet diagnostic criteria for one of these mental disorders in order to receive coverage for their therapy sessions.

For some individuals with a definitive diagnosis that has proven to be effectively treated with mental health services, this can be a seamless process that allows them the help they need at an affordable rate. But for others, this presents a choice that is often not clearly communicated to them: How do you feel about being diagnosed?

In order to “meet criteria” for a diagnosis, there is a list of symptoms that need to be regularly present in an individual. Often, for the average person seeking therapy for assistance during a difficult period of their life, they don’t meet this criteria (which is a GOOD thing, considering the goal of mental health treatment is reduce problematic symptomology). This then leaves both the client and the therapist in a difficult spot: Do you try to force-fit a diagnosis to reduce financial pressure on the client, or does the client end up in a position of having to decide to either take on a larger financial burden or forego services?

Those seeking marriage or couples counseling have to be extra careful about attempting to use medical insurance for services. Most insurance plans just do not cover couples counseling for general relationship difficulties. In order for couples counseling to be covered, one individual has to be given a diagnosis, and counseling together as a couple is then supposed to then focus on that diagnosis.

There can be long-term risks to having a mental health diagnosis on your medical record. One risk can present itself when applying for life insurance. If a life insurance company requires release of medical records, you may be looking at paying more for life insurance, or even being denied coverage, depending on their risk assessment of certain diagnoses.

Although these don’t sound like great options- get diagnosed with a disorder that may have lasting consequences, or pay astronomical fees out of pocket- we would like to dispel some myths and offer some hope to those reconsidering whether using medical insurance for services is worth it.

Therapy services are very straightforward. Unlike going to a medical doctor and having multiple tests or services performed, therapists typically have one cost per hour of service. Costs may vary slightly depending on whether you are seeking individual vs. family or couples counseling, but you always receive a flat fee with no hidden costs. At Center for Change, we provide each out of pocket paying client with a “Good Faith Estimate” that states exactly what the cost will be depending on how frequently you desire services. Frequency of services can be flexible depending on needs, in order to both get the services you want while also making it affordable.

Center for Change also offers a variety of out of pocket options, including low fee to free services offered by interns, reasonable fees well below typical therapy costs for provisionally licensed therapists (providers that have been out of school for 2-4 years), and sliding scale fees based on need. Our commitment to you is that we will have a provider that can work with your financial situation if you choose to not use insurance. Another benefit of choosing to not use insurance is that you are in control of how often you meet with your therapist, and are not limited by a certain number of approved sessions, or simply limited by constraints of a therapist’s schedule- at Center for Change, those therapists who take insurance are booked a month or more out, versus our therapists who work with out of pocket clients, who can typically see someone within days.

We also strive to be transparent in all we do, and believe it is important for you to be aware of all the pros and cons before handing over your insurance card. Therapy is not an easy journey to embark on, and we want you to begin feeling confident and comfortable with your decision.