Written by:
Laura Handrick
Most health insurance plans, including employer-sponsored plans and insurance purchased through healthcare.gov, have mental health benefits included. This is largely due to the Affordable Care Act (ACA) that mandated mental health and substance abuse benefits be included as one of the ten essential health insurance benefits.
The mental health services included in mental health insurance coverage provide mental health and substance abuse screenings, children’s behavioral assessments, autism screening, preventative care, prescription coverage, psychiatric hospitalization, and therapy. However, private plans purchased outside of healthcare.gov or the SHOP Exchange may provide fewer or different mental health coverage options.
Types of Insurance for Mental Health
Prior to mental health parity laws put in place in 1996, insurance providers could limit mental health coverage. In 2008, new parity requirements ensured mental health was covered at similar levels as other health insurance benefits. The ACA went even farther to ensure mental health benefits and treatment were included as part of health insurance coverage. It also requires substance abuse coverage. Medicare also provides extensive mental health insurance benefits.
Here are the types of private and public insurance that include mental health coverage:
Private Health Insurance
Private health insurance can be purchased by anyone through a licensed health insurance broker or directly through the healthcare.gov website. However, employers with over 50 full-time staff are mandated by the ACA to provide health insurance to employees; if you’re working for a bigger firm, the large group plan is often the best place to get your mental health insurance.
Smaller businesses can get small group health insurance, although it’s more costly as they don’t have the negotiating power of larger employers. That makes large group plans the most affordable as rates are lower and the employer is required to pay a portion of the premium. With small group plans, the employer has a choice of how much they’ll pay towards premiums, which is often better than an individual plan requiring you to pay the entire insurance premium yourself.
Here are the common private plan types for mental health insurance and relative prices:
- Individual plans: Best for individuals and gig workers under age 65 $$$$
- Small-group plans: Best for employees working in small businesses $$$
- Large-group plans: Best for employees in companies with over 50-100 workers $$
- COBRA: Recently laid off or terminated employees; 30-day enrollment limit $$$
Public Health Insurance
Public health insurance like medicare is available for those over age 65 as well as individuals with disabilities; it includes mental health and substance abuse coverage. Government employers such as the department of defense offer their own insurance plans with mental health insurance coverage included. In addition, low-cost and free plans are available for children and those with lower incomes.
Here are commonly available public health insurance plans:
- Medicaid: State-run program, best for low-income individuals with few resources $
- Medicare: Federal program, best for those aged 65+ and individuals on disability $$
- Children’s Health Insurance Coverage (CHIP): Best for families who don’t qualify for Medicaid to obtain coverage for their children (and pregnant women in some states) $
- TRICARE: For department of defense employees, military veterans, and dependents $
- Federal Employees Health Benefits (FEHB): Federal employees and dependents $
Public plans may offer additional mental health benefits than private plans, such as lower copays or fewer limits on the number of visits per year. Therefore, we’ll focus primarily on employer-sponsored health insurance plans and individual marketplace plans that meet the standards of the Affordable Care Act (ACA) in covering mental health needs.
Mental Health Care That Is Typically Covered
ACA-compliant mental health insurance coverage and most employer small and large group health insurance plans cover individual and family therapy, mental health, and substance abuse screening, outpatient psychiatric care, medication, and hospitalization services.
Specific mental health services covered by ACA-compliant insurance include:
- Mental health evaluations for you, your covered spouse, and dependent children
- Children’s behavioral counseling and parent support for issues like ADHD and autism
- Psychotherapy for mental health issues like anxiety, depression and bipolar disorder
- Anti-addiction and substance abuse prevention medications
- Couples and family counseling for behavioral and mental health issues
- Prescription drugs for the treatment of mental health disorders
- Psychiatric hospitalization, on par with what’s offered for medical hospitalization
- Substance abuse treatment, both in-patient and outpatient
- Home mental health visits (if home medical visits are offered in the plan)
Mental Health Care That May Not Be Covered
Each state and benefits provider may choose specific coverages and many limit usage to a fixed number of visits per year. Most require copays and deductibles. Due to parity laws, these expenses can be no higher for mental health needs than for covered medical benefits.
However, private mental health care may not cover:
- 100% of the cost of addiction treatment; (60-90% is covered on ACA plans, based on the plan purchased)
- The exact medication you prefer; generic options are included
- Non-mental health diagnoses like internet addiction
- Financial counseling, such as for bankruptcy
- Legal counseling, as in how to file for divorce or adoption
- Psychotropic, experimental, or homeopathic drugs
- Weight loss program membership fees or diet food
- Gender reassignment surgery (counseling and therapy would be covered)
- Unlimited visits to a therapist; many plans have an annual cap
- Mental health issues that occur while traveling outside the US
- Lost wages while in a treatment or recovery center
Mental health insurance coverage is driven by the robustness of the medical plan in which it’s included. Private insurance may not cover the costs of non-medically necessary treatments or behaviors outside of what’s identified in the Diagnostic and Statistical Manual of Mental Disorders (DSM–5).
The costs and coverage provided by your mental health insurance vary significantly based on the medical insurance plan type you choose. Some health insurance plans have larger co-pays, higher-deductibles, brand-name medication limits, and therapy visit caps.
Fortunately, up to 91% of larger firms offer an Employee Assistance Program (EAP) to bridge the gap with free counseling and referral services. And nearly two thirds offer wellness resources and programs to address topics like stress in the workplace and smoking cessation.
Nonprofits in many locations provide substance abuse treatment, including free substance abuse centers and half-way houses for individuals recovering from addiction.
To find out exactly what coverage your health plan provides in insurance for mental health, refer to your insurance provider’s benefits summary, often referred to as a Summary Plan Description (SPD).
Determining What Mental Health Benefits Your Insurance Plan Provides
Medical health insurance plans are required to provide two documents to plan recipients. One is the plan document, written in plain language, officially referred to as the Summary of Benefits and Coverage (SBC), and the other is the Summary Plan Description (SPD). These documents provide information about what mental health benefits your insurance plan provides.
Summary Plan Description (SPD) vs Summary of Benefits & Coverage (SBC)
These documents explain the exact mental health insurance coverage you’re paying for and eligible to receive. Some providers combine these two required documents into one.
Summary Plan Description (SPD)
The SPD must be provided free to plan participants. It explains how the plan operates and what benefits it provides, including mental health benefits. It also includes plan start and end dates, and information on how to submit a mental health insurance claim. Whenever a plan is updated, participants are to be notified through an update to the SPD, referred to as a modification document.
Summary of Benefits and Coverage (SBC)
The SBC must be provided to individuals using plain language. It is given at the time of enrollment and again at benefits renewal. It can also be requested directly from the plan provider at any time.
The SBC gives you an overview of the benefits and coverage included in the plan using a standardized template that includes:
- Types of mental health issues covered
- Benefits provided for mental health treatment and prevention
- Cost-sharing (i.e. co-pays/deductibles) for mental health benefits
- Mental health coverage limitations (such as number of therapy visits)
Where to Find Mental Health Coverage Information
The first place to look for your mental health insurance coverage is on the plan documents (SBC, SPD) provided by the health insurance provider. However, if you’ve misplaced them, you have numerous options to gather the mental health insurance coverage information you need.
To find mental coverage information, go to:
- Human Resources (HR): Employees can ask an HR rep what’s provided and request plan documents to be emailed or mailed. HR reps can help you find specific information within the documents.
- Healthcare Providers: Major health insurance providers like UnitedHealth and Aetna have websites with coverage information. Some offer a chatbot to answer questions like, “does my plan cover Paxil?”
- An HR/Payroll App: If you’re in a firm that has an employee self-service HR/payroll system, you may find plan information available through an app or online website.
- HR Call Center: Larger firms may have a HIPAA-compliant HR call center to answer questions about mental health insurance coverage over the phone.
- Government Website: Government providers like Medicaid offer assistance by phone, website, or online help and let you access downloadable plan documents.
- Broker: Those insured through a broker can request information from their health insurance agent; ask them to schedule a time to review your mental health coverage.
Deductibles, Co-Pays, Co-insurance, and More
Deductibles, co-pays, and co-insurance are the three most common out-of-pocket costs. They include deductibles that must be met before your insurance kicks in, co-pays that can cost up to 40% or more of the visit, or coinsurance if you’re covered under more than one plan. Depending on your exact health insurance plan, your out of pocket expenses may vary.
The good news is that some plans provide a max-out-of-pocket limit. That means once you’ve paid a certain amount toward deductibles and copays, the plan will cover 100% of any remaining expenses that plan year. Sources vary, but deductibles range widely from $1,000 to $8,000 or more, depending on the health insurance plan you choose.
Necessity Of Diagnosis / Pre-Approval
Some plans require your physician or therapist to call for pre-approval for services such as psychiatric hospitalization or formulary prescription medications. If pre-approval is required, it will be listed in your plan documents and most likely will be stated on your health insurance card. Your mental health provider should manage the pre-approval process for you.
In-Network vs Out-of-Network
One of the challenges with mental health treatment is that health insurance providers often pay a higher percentage of coverage for treatments received in-network. In-network means that they have an agreement with the provider. That doctor or therapist is listed within their network.
Out-of-network providers are psychiatric and counseling professionals that may be near to you or preferred by you, but who don’t have a written agreement with your insurance carrier. You can still set up appointments and see these providers, but your insurance company will require you to bear a larger portion of cost yourself.
For example, let’s say you need to have your anti-depression prescription refilled. If you go to an in-network provider for a med-check appointment, your insurance may pay 80% of the cost of the $125 visit, whereas they may only pay 60% of the cost if you go to an out-of-network provider.
In-network: $125 x .80 = $100 paid by your insurance company; you pay $25
Out-of-network: $125 x .60 = $75 paid by your insurance company; you pay $50
Further, in-network providers offer pre-negotiated rates, and the billing is automated. Whereas, an out-of-network provider may charge more for the same appointment, or not accept insurance at all. That means you’ll pay for the visit yourself and then send a receipt to your insurance provider for reimbursement.
How to Find a Therapist That Accepts Your Insurance
Almost half of psychiatrists and therapists don’t accept insurance. They’re cash-pay only and may not abide by usual, customary, and reasonable (UCR) rates. You can still see the therapist — they’ll be considered “out-of-network.” That means you’ll be required to submit a claim to your provider for reimbursement. However, in rural areas, there may be no one nearby. Some carriers have identified telehealth providers (teletherapists) who offer online video therapy appointments instead.
The best place to find a therapist that accepts your insurance is through your insurance carrier’s website. Most benefits providers, such as Blue Cross/Blue Shield or Cigna, post an online list of in-network providers. If not, you can contact their call center or customer support number to determine whether your preferred provider is in their network.
Another way to find a therapist that accepts your insurance is to call your therapist’s office and ask whether they take your insurance plan. Keep in mind there are a myriad of providers who can meet your mental health needs, including medical professionals. Which you choose depends on whether you require therapy, medication, or both.
Here are examples of covered providers who can fulfill your mental health needs:
- Psychiatrist: Medical professional certified by the American Board of Psychiatry and Neurology (ABPN) is able to address all mental health needs
- Medical doctors (M.D.): Family medicine doctors can often provide medication
- Doctor of osteopathic medicine (D.O.): These professionals can offer both medication and treatment, including mental health assessments and behavioral counseling
- Licensed clinical psychologist: these experts provide counseling and therapy; some states allow them to prescribe medications as well
- Clinical social worker: these professionals provide child and family mental health support such as group therapy
- Licensed Family Counselor: these therapists have Marriage and Family Therapy (MFT) certification and provide all kinds of mental health and substance abuse support
- Clinical Nurse Specialist (CNS) and Nurse Practitioners (NP): similar to an MD or DO, these practitioners, whether CNS or NP, can provide basic mental health support and in some states, may be able to provide medication prescriptions
- Physician Assistant (PA): some physician assistants, with the proper training and under the supervision of a psychiatrist, can also provide mental health care
Finding an Out-of-Network Therapist
Some types of insurance plans, such as Health Maintenance Organizations (HMO) like Kaiser, may exclude out-of-network services. That means you’d pay the entire cost of your mental health visits yourself, out of your own pocket.
However, those individuals with mental health insurance plans that cover some portion of the out-of-network provider fees can often find a therapist, counselor, or psychiatrist by searching these terms online or using an old-fashioned phonebook. Another option is to ask for a referral from your primary care physician.
An out-of-network provider may not choose to submit the cost of your visit as a claim to your insurance carrier. In that case, you will need to request a “superbill” from your therapist and submit a claim for reimbursement. A superbill is more than a receipt for services paid. Instead, it provides additional information such as your personal details, date of service, and diagnosis. That allows your insurance company to reimburse you based on your co-pay and UCR caps.
Mental Health Parity Laws
Under the ACA, insurance providers must cover mental health and substance abuse treatment services at the same level as they do medical and surgical services. That’s referred to as parity and governed by the Mental Health Parity and Addiction Equity Act (MHPAEA, last updated in 2014.
This law was designed to ensure that individuals suffering from mental health issues can get the care they need. And it appears to be working as mental health providers noted an increase in visits of nearly 17% (psychiatrists) and 2.5% ( therapists) after MHPAEA was implemented.
How Mental Health Parity Laws Impact Mental Health Insurance
If your medical insurance covers 90% of hospitalization costs for heart surgery, your health insurance provider is required to provide the same rate of coverage for in-patient mental health care, i.e., covering 90% of the cost of a psychiatric hospital stay.
Parity laws cover Medicaid, large group plans, and most mental health insurance plans offered through the healthcare.gov exchange. However, certain insurance plans such as self-insurance plans and small group plans offered by businesses with fewer than 50 employees may not be required to offer parity.
Mental Health Insurance Statistics
One of the challenges is that those with mental health problems are less likely to have insurance. Over 10% of those with mental health issues don’t have insurance at all. And the numbers are much higher (up to 40%) for those with serious psychological distress.
Here are some interesting statistics about mental health insurance, costs, and utilization:
- 49% of Americans get their health insurance through an employer, however, these rates go up to 60% in many midwest and east coast states
- 25% get their insurance through the marketplace or medicare
- Nearly 50% of whites, females, and LGBTQ members needing treatment for mental health issues got support in 2018; rates are significantly lower for males and ethnic populations, where far fewer receive the treatment they need
- 29% of the cost for mental health services is paid out of pocket. In addition, out of pocket expenses have been rising since the implementation of MPHAEA.
- 2.4% to 22.9% of adults with any mental illness (AMI) have no health insurance. The percentage varies by state, i.e. Georgia, Texas, and Wyoming have the highest rates of uninsured AMI individuals, while Mass., Iowa, and Wash. D.C. have the lowest.
- 57.2% of adults with mental health receive no treatment
The good news is that mental health insurance is included in most public and private health insurance plans whether you’re insured through an employer, a broker or a government agency. And thanks to parity laws, mental health services won’t cost more than medical services. However, not all mental health professionals accept insurance. Therefore it’s crucial to look at your benefits plan documents when purchasing or using mental health insurance.
Additional Resources for Mental Health Insurance
NAMI
Health Affairs
Medicare.gov
Mentalhealth.gov
Healthcare.gov
Psychiatry.org
