Insurance 101

The realm of insurance is a winding whirly world of confusion and technical jargon. It is my personal belief that insurance companies try to make things as difficult as possible, so people are less inclined to use the benefits they are paying for. In this post we will be discussing the basics of using insurance to pay for therapy. Because this topic can be so confusing, I have set this information out in tiers, going from the easiest to understand to the more difficult. When you feel like you have read enough to satisfy what brought you here, feel free to stop reading.

Level 1

Insurance in theory is a service that is designed to make expensive things easier to obtain. Insurance does this by charging you a little each month, regardless of there being a large expense that needs to be paid or not. Then, when the large expense does come, insurance will pay all of, or most of the expense instead of you. In essence, insurance is a cost sharing service and the trick is to understand what expenses your insurance will pay for, how much they will pay of the large expense, and what does insurance expect you to pay.

Because insurance is a for profit service, they offer different insurance “products” so they can meet the needs of a wide range of clientele (and make as much profit as possible). The different products can cover different large expenses and have different expectations about how the costs will be shared between the insurance company and you. Because of the variations in insurance products, it can be difficult to discuss insurance in broad strokes. There will be times where two individuals hold different insurance products from the same insurance company, which can result in a therapy visit being paid for by the insurance for one person, and not the other. These differences in products can cause confusion when talking about insurance casually, because it is not always clear what insurance products two people are discussing, even though they are discussing the same insurance company.  

Level 2

Level 1 was designed to give you a brief overview of the concept of insurance. In level 2 we will be discussing the process of using insurance for mental health therapy. In this level I am intentionally not using insurance jargon to make what is actually happening clearer. In the next level we will discuss the same situation but with the insurance vocabulary.

When wanting to see if insurance will share the cost of therapy, the first thing you want to do is see if the therapist is able to take your insurance. Not every therapist can take every insurance. So, you should look on the therapist’s website, or contact them and ask what insurances they take. Now, because there are different insurance products, and insurance companies like to do too much, it is possible a therapist takes only certain insurance products from a company and not others. This is really difficult for therapists to know, so I recommend once you have found a therapist you want to work with, and they can accept your insurance, give your insurance company a call and ask if your insurance will share the cost of services for that particular therapist. The number to your insurance company to ask questions is on the back of your insurance card.

 Alright, you have called your insurance and they said yes, we will share the cost of this service with you, for this therapist you want to work with. When you get to the session, at some point you will have to talk about a payment of some kind. Because insurance is a cost sharing service, therapists have to ask about your portion of the cost. This cost varies greatly and depends entirely on the insurance product that you have. Some people pay nothing, some people may have to pay all of the cost session. It depends on the factors of the insurance product that you have (we will discuss these factors more in-depth later). Your portion of the cost of the session is due at the time of service and that portion is determined between you and the insurance company. “How do I find out what my portion of the cost sharing is”, you may ask. Well, that is another great question to ask when you call the insurance company. Remember the number to call is on the back of your insurance card.

Here is a quick peek behind the curtain. Once the session is over the therapist will go to your insurance and say, “hey we provided services to one of your people, you need to pay your portion for their care”. In a couple weeks, because insurance is slow, they will get back to the therapist and say, “yep that is our person and yes, we agreed with them to pay this much for therapy services. Here is your money”. The delay between payment from insurance and the initial session is typical but important to understand for reasons I will discuss in the next level.

Level 3

Alright, in level three we will be trying to explain as much insurance jargon as we know and would be helpful. We even highlighted the words and their definitions for ease of use.

Starting at the beginning, every month you pay an insurance premium. A premium is the amount of money you pay to keep your insurance active. This amount varies by what products of insurance you have signed up for. That payment you make every month is for the ability to use the insurance products you signed up for, and does not affect how those products work. This is a side note but will come in later. Another word that will be used often is covered or not covered. To have a service covered means the insurance product that you have, will share the cost of that service with you. There is variability in what is and is not covered between insurance products, or a service might be covered with certain providers and not others. It is helpful to understand what is and is not covered so there are no surprise bills later.

Once you have found the therapist you want to work with, you want to know if the therapist is, in network or out of network. If the therapist is in network, the insurance will cost share for the services of that therapist. On the other hand, if a therapist is out of network, your insurance will not cost share for the services of that therapist, or will pay a reduced amount (we will discuss this more in level 4). You can determine if your therapist is in or out of network by calling the number on the back of your insurance card. Ok, you have decided to work with this therapist, at some point in the session someone will ask you about your copay. Copays are the portion of the service that you agreed with your insurance to pay. These are dictated completely by your insurance product, and is not changed by the therapist. Because insurance products are so varied, copays are also varied. Usually, a copay will be a flat amount, however there are situations where your co pay can change (I’ll discuss those situations in level 4).

After the session the therapist will submit a claim which tells the insurance, that you were seen by the therapist and is asking for the insurance companies’ portion for the service rendered. When the claim is returned, insurance will give their portion of the cost. It can take a few days to a couple of weeks for insurance to return a claim.  As a consumer it is important to know there is a delay because, if insurance says, “the person should have paid the therapist X amount of money”, and you paid Y amount; a therapist must collect the difference between X and Y. In fact, a case can be made for fraud against the therapist if they routinely do not seek the difference between X and Y. (yes, you read that right, therapists must ask for your full portion of the cost sharing). 

Level 4

Alright last level, look at you hanging in there and learning some things! This level is striving to talk about common nuances in insurance products that can impact how much you pay and how you pay.

First let’s discuss deductibles. A deductible is a tool in most insurance products that effects the amount of money you owe at a given time. Essentially a deductible is the amount of money you have to pay towards services, before insurance will begin to share the cost of services with you. For example, let’s say for therapy services AFTER you meet your deductible, you pay a $25 co-pay. Seems simple and clean. However, it is possible that before you meet your deductible, insurance does not pay anything. Meaning you are expected to pay for the service yourself until you reach whatever dollar amount your deductible is.

Deductibles can be tricky for two reasons. First, the amount of money you pay before and after you hit your deductible can vary depending on the plan. I have had clients who never reached there deductible but still only had to pay their co-pay, and other clients who had to pay far higher than their co-pay because they had not met their deductible yet; but once they met their deductible their out-of-pocket cost dropped to their co-pay only. Second, not every expense you incur goes towards deductibles. I have seen some plans where they pay a co-pay, which goes towards their deductible and plans where their co-pay does not go towards the deductible. Knowing what does and does not count towards the deductible makes it easier to plan your health decisions and not be surprised by medical bills. To get more information about your deductible, you can, say it with me, call the number on the back of your insurance card.  

The last thing we will discuss is having out of network services paid by your insurance. Depending on your insurance product, you may be eligible for services from an out of network provider to be paid by your insurance, but you have to jump through a couple hoops to make it work. There are plans that will cover the services of out of network providers but you as the consumer have to pay for the expense yourself, and get a superbill from the therapist. A superbill is a receipt that has all the information your insurance company needs to reimburse you for the expense. You will take the superbill and submit it to your insurance company. Then your insurance will pay you the amount of cost sharing for out of network providers. Sometimes they will pay less, and other times they will pay the same as an in network provider. There are plenty of nuances for this process but the need to know is a superbill is something that your therapist can generate for you if you ask for it, a superbill is free of charge from the therapist and most of the time a superbill is needed for reimbursement.

Outro

We have come to the end of our talk on insurance! I hope this helped inform you of how to use the services you are paying for, to best meet your needs. If you made it to the end and you want more information (look at you going above and beyond) feel free to do more research here, this link discusses similar topics more in-depth: https://www.cms.gov/files/document/nsa-health-insurance-basics.pdf

Shameless Plug

If you want to put this new found insurance knowledge to the test, feel free to reach out to Comfy Corner Counseling by visiting the the contact page at the top of this page. If you would like to schedule yourself, click the Book Now Button to set up a free 15-minute consultation phone call and see if we are a good fit for you.