Using Your Insurance for Mental Health Services: What You Need to Know
It’s that time of year again when annual deductibles reset, and the financial realities of health insurance take center stage. For many of us, the fresh start of a new year also brings fresh financial challenges, especially when accessing necessary healthcare services, including mental health care.
Understanding how your insurance works is critical to managing costs and avoiding unexpected bills. Let’s take a closer look at how insurance plans typically operate, what you can expect in the early months of the year, and how to plan financially for your mental health care.
Breaking Down Key Insurance Terms
Insurance jargon can be confusing, but having a basic understanding of the key terms can help you navigate your coverage more effectively. Here’s a quick rundown of some of the most common terms you’ll encounter:
Annual Deductible: The annual deductible is the amount you must pay out-of-pocket for covered healthcare services before your insurance starts to share the costs. For example, if your deductible is $1,500, you’ll be responsible for paying that amount for eligible services before your insurance kicks in to cover a portion of the costs. This resets at the beginning of every plan year—usually January 1.
Copays: A copay is a fixed amount you pay for a healthcare service, like a doctor’s visit or prescription medication, at the time of the service. For mental health appointments, copays typically range from $20 to $50, depending on your plan. However, you won’t typically see copays until you’ve met your deductible.
Co-Insurance: Co-insurance is the percentage of the cost of a service that you are responsible for paying after your deductible is met. For instance, if your plan has a 20% co-insurance rate, you’ll pay 20% of the cost of each session, while your insurance pays the remaining 80%.
Out-of-Pocket Maximum: The out-of-pocket maximum is the most you will pay for covered services in a plan year. Once you’ve spent this amount on deductibles, copays, and co-insurance, your insurance will cover 100% of covered healthcare costs for the rest of the year. This provides an important safety net for managing larger healthcare expenses.
Why It’s Crucial to Understand Your Plan
One of the most important things you can do is take the time to understand your specific insurance plan. Every insurance policy is different, with unique deductibles, copays, co-insurance rates, and out-of-pocket maximums. If you’re not familiar with the details of your plan, you may find yourself facing unexpected costs, which can be especially challenging when dealing with the financial pressures of the new year.
Mental health providers, including Oak River Wellness and Awakening Into Life, do not have control over how your insurance processes claims or the costs you are billed. While we can help clarify what services we provide and submit claims on your behalf, the responsibility for understanding your coverage ultimately rests with you. This is why we strongly encourage all our clients to familiarize themselves with their insurance benefits before starting or continuing therapy.
What to Expect in the Early Part of the Year
For many clients, the beginning of the year can come as a financial shock when they receive their first invoices for therapy sessions. Here’s why: until your annual deductible is met, you will likely be billed the full contracted rate for services. At Oak River Wellness, the anticipated cost for a standard therapy session is $150. This means that if your deductible hasn’t been met yet, you should plan to pay $150 per session until your insurance begins sharing the costs.
It’s important to remember that meeting your deductible isn’t just about mental health services—it applies to all eligible medical expenses under your insurance plan. This includes doctor visits, hospital stays, prescriptions, and other covered services. The quicker you reach your deductible, the sooner your insurance will start to cover a portion of your costs. While this can feel like a financial burden upfront, it’s ultimately a matter of good financial planning to help spread out these costs over the course of the year.
Oak River Wellness does not offer a sliding scale rate. At Awakening Into Life, clients who cannot afford care or don’t have insurance may find that a base $65 per hour rate, that is charged at the time of service, is a bit more predictable. Awakening Into Life is my own private practice but I do not accept insurance. You also won’t be able to apply these costs to any unused insurance deductible you might be trying to meet.
So, there is a bit of a choice here, but each situation will need to be handled in accordance with its own merits and ethics. You can use your insurance and make sure you understand how the costs work for it, or you can pay out-of-pocket at a lower rate that accords with Open Path and other low-cost counseling referral services. There are also a couple of other options worth considering:
Using Employee Assistance Plans (EAPs): Many employers offer Employee Assistance Plans (EAPs) as part of their benefits package. These programs often provide free or low-cost counseling sessions for employees and their families. If you’re concerned about the cost of therapy, checking whether your employer offers an EAP can be a great first step. Typically, EAPs include a set number of sessions, such as three to five, at no cost to you. These sessions can be an excellent way to begin your mental health journey or address specific concerns without dipping into your insurance benefits. Be sure to contact your HR department or benefits coordinator to learn more about the services available through your EAP.
Leveraging a Health Savings Account (HSA): If you have a Health Savings Account (HSA) or a Flexible Spending Account (FSA), you can use these funds to cover the cost of therapy sessions, including copays, deductibles, and other out-of-pocket expenses. HSAs offer tax advantages, allowing you to pay for eligible medical expenses with pre-tax dollars. This can help make therapy more affordable, especially in the early months of the year when you’re working toward meeting your deductible. Check with your HSA provider to confirm what expenses are covered and how to submit claims for reimbursement.
Colorado Medicaid: Coverage and Requirements
For clients using Colorado Medicaid, mental health services are typically covered with no out-of-pocket costs. However, maintaining Medicaid coverage is critical. Clients should regularly verify their eligibility and re-enroll as required to ensure uninterrupted access to care. Losing Medicaid coverage can result in sudden lapses in therapy services, adding unnecessary stress during already challenging times.
Clients on Medicaid are also expected to meet basic attendance requirements to continue receiving services. We use the following attendance benchmarks when considering the retention of a client:
90% Attendance: Excellent and encouraged.
75% Attendance: Expected to maintain access to services
50% Attendance: Minimum requirement to avoid discharge.
Falling below 50% attendance will result in the termination of services, as consistent participation is essential for therapeutic progress. If challenges arise that impact your ability to attend sessions, please communicate with us as soon as possible so we can work together to find solutions. It’s just that when avoidable patterns begin to appear in your attendance levels it indicates that you may not be prioritizing the therapeutic process in your life.
Avoiding Surprise Bills
No one likes getting an unexpected bill, especially when it comes to healthcare. Unfortunately, surprise billing can happen if there’s confusion about your insurance coverage or how claims are processed. To minimize the risk of unexpected costs:
Verify Network Status: Make sure your provider is in-network with your insurance plan. Out-of-network providers often come with higher out-of-pocket costs.
Clarify Coverage: Double-check what services are covered under your plan and whether there are any limits on the number of sessions you can attend.
Understand EOBs: When you receive an Explanation of Benefits (EOB) from your insurance company, review it carefully. This document explains how your claims were processed and what portion of the cost you are responsible for.
The Value of Mental Health Care
While the cost of therapy can feel like a significant expense, it’s important to remember the immense value of investing in your mental health. Therapy offers a safe space to explore challenges, develop coping strategies, and build a foundation for long-term well-being. By planning for these costs and understanding your insurance, you can approach your mental health care with greater confidence and ease.
In Closing
We are committed to supporting your mental health journey while also being sensitive to the financial realities you face. While we do not have control over the costs set by your insurance company, we are here to help you navigate the process and ensure you have the information you need to make informed decisions.
As you move through the early part of the year, remember that reaching your deductible is part of the process of activating your insurance benefits. The quicker you meet it, the sooner your out-of-pocket costs will decrease. With thoughtful financial planning and a clear understanding of your coverage, you can focus on the transformative work of therapy without added stress.