Insurance 101 – Using Health Insurance to Cover Counseling
Why you should think twice about using health insurance to cover counseling
Are you thinking of using health insurance to cover counseling? With the current state of healthcare, you are indeed fortunate to have coverage. Many people feel that therapy is an expense that they cannot manage without it. I believe that anything which gives you more options is a good thing. So, why wouldn’t I encourage clients to use their health insurance to cover counseling?
I encourage you to investigate all options and arrive at an informed decision regarding your health care. That may mean using your insurance, and it may mean making another choice. You can always decide to use your benefits, but you cannot “undo” many of the negative consequences of using them. What are the risks of using your health insurance?
The required diagnosis of a mental illness
Insurance companies only pay for things that are “medically necessary.” This means that someone has to actually diagnose you with a mental disorder AND prove that it is impacting your health on a day-to-day basis. Many of life’s problems are not mental health disorders, and those who are wise may seek help before an issue gets out of hand. So you may be diagnosed with a “light” condition such as Adjustment Disorder, but nonetheless, do you want a mental health diagnosis in your file if you don’t need it? And for those who do suffer from more serious conditions, it makes it that much more of an issue. A diagnosis is a snapshot of a person, not a running commentary to their life. If you get diagnosed with something, you should be able to decide who gets access to that info and why. You lose control of that information when it is in your file being faxed to anyone who ever requires access to it. A diagnosis says nothing about how you cope, what your strengths are, and which of the many symptoms you actually have. But a diagnosis will speak for you and may negatively impact your eligibility for things.
Children have a more difficult time in many ways when they are given a diagnosis. This diagnosis can follow them around in school, on to college, and be a barrier to doing certain things such as working with the Air Force or military, landing federal jobs, security clearances, aviation, and any other jobs requiring health-care related checks (many schools and healthcare institutions are now instigating these policies to screen out employees who may be unstable or cost too much money in mental health care and lost work days). If you child’s condition warrants a diagnosis, you may want to have some say over how that diagnosis functions in their life.
Loss of confidentiality = loss of control over who gets your information
and what they use it for
Anything that is part of your file becomes a permanent part of your file. This means that when you apply for new health insurance, life insurance, and many types of job, they can require a release of authorization to view your entire medical record. This can result in being denied coverage, or having much higher premiums because of having ever been treated for a mental health issue. Even if they do not call it a “pre-existing condition” they can (and will often) deny you based on previous treatment.
A diagnosis is not the only thing that becomes part of your file. Insurance companies require treatment plans, progress reports, and many other types of personal information to determine what, if anything, they will cover. These details about your treatment should be private, but instead they are open and available to anyone with access. This could include potential employers.
Having coverage doesn’t mean you are covered.
And if you are, prepare to fight for it.
The insurance company has several processes to approve treatment. They often only approve a certain number of sessions, even if more are necessary. They will often deny your claim and it could take months to get reimbursement, if at all. This can interrupt treatment. It should be between you and your therapist to determine what comes next in your treatment and how much of it you need. But, imagine an insurance agent sitting next to you in your session, clipboard in hand, making decisions about whether you truly “need” this therapy or not.
The rule of thumb when using insurance (directly or by reimbursement) is to contact them before treatment begins and get approved. Ask what information you will need to present for reimbursement. If and when you are denied, be prepared to go through several levels of appeals process with your therapist to get your rightful coverage. This can take weeks to months.
It all boils down to choice
Many insurance companies do not give you a choice of what therapist you can see. They have preferred providers and you must choose one of them. Even if you are happy with your provider, as I said you don’t have a choice about what information is put into your file and shared with everyone. You don’t get to take that information out of your file once it is there. This can be devastating for some, and a minor irritation to others. You are the only person who can decide what is right for you. I am concerned with giving you information so that you can make informed decisions.
What else can I do?
Though I do not take insurance, I am happy to provide you with statements/invoices that many insurance companies require. And if you are denied coverage, I will fill out the necessary forms that they require the provider to complete for the appeals process.
Other work-arounds include using your Health Savings or Flexible Spending Accounts to pay for therapy using pre-tax dollars. I do take all types of HSA and FSA cards with major credit logos on them. If you do not have one of these accounts, you could speak with your tax preparer to see if you could deduct therapy expenses from your taxes as an out-of-pocket health expense.
Kat Mindenhall, LCSW