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Should I use my insurance plan to pay for psychotherapy?

It's understandable that you might want to use your health insurance to pay for psychotherapy sessions. Yet there are important reasons why you might choose not to use your insurance. The insurance companies don't advertise this information. Here's what you need to know. 

  • Insurance companies require that you be given a psychiatric diagnosis or they will not cover your treatment. 
    • Many common diagnoses are not eligible for insurance coverage.
    • The psychiatric diagnosis remains on your records and may affect your ability to obtain life and health insurance, employment, security clearances, and your credit rating. It may affect the amount of your premiums, loan payments, mortgage payments, and car insurance rates. 
  • Insurance companies may share your personal health information with a national medical database and will maintain your information in their own database.
    • The information stored includes your diagnosis and may include other personal health information including progress notes and treatment plans that were required by the insurance company during your treatment. 
  • Insurance companies dictate the type of treatment you can receive.
    • They have policies that strongly encourage or require behavioral health treatment whether on not this is the best type of psychotherapy for you. 
    • They often require your psychologist to provide detailed treatment plans to them to justify step by step the treatment you are receiving.
    • The insurance company, not you or your psychologist, determines the type of treatment you receive by only paying for specific types of treatment.
  • Insurance companies restrict the length of your treatment.
    • They strongly encourage short-term treatment based on their own internal guidelines whether or not this is best for you.
    • The insurance company decides what the best length of your treatment is, not you or your psychologist, by restricting payment. 
    • If you ask your insurance company if there are limits on the length of treatment they typically will tell you there are no limitations on the number of sessions. If you ask for more details they will usually qualify this by saying that treatment "must be medically necessary." This policy is in almost all insurance contracts and is routinely used to restrict the length of treatment. 
  • Insurance companies use a variety of methods to significantly reduce the amount of money they pay for treatment.
    • The following terms refer to the methods your insurance company may use to reduce or deny payments for treatment:
      • deductible not met 
      • copayment required
      • coinsurance rate percentage required
      • not medically necessary
      • exceeds allowed rate
      • exceeds contracted rate
      • not a covered diagnosis
      • not a covered treatment
      • not in network
      • prior authorization required
  • Insurance companies typically pay your psychologist a deeply discounted rate for treatment. 
    • Only you can decide if you think this may affect your treatment. 

Not all insurance companies follow all these policies, but the vast majority do. 

To avoid these problems many clients choose to pay for their psychotherapy directly even when they have insurance coverage. 

The Happiness Psychologist accepts "Out of Network" Insurance Coverage

Your insurance plan may cover your sessions if you have "out of network" benefits. You will be responsible for payment in full at the time of your session. I can provide you with a receipt to submit to your insurance company. Once you submit the receipt to your insurance company they will reimburse you according to the terms of your insurance contract. 

If you plan to use insurance contact your insurer by calling the customer service number on the back of your insurance identification card to check your eligibility and benefits prior to setting up your initial session. Ask if you have "out of network" coverage. 

Request a Licensed Psychologist

When you contact your insurance plan be sure to tell them that you'd like to be treated by a licensed psychologist. If you do not specify that you would prefer to meet with a licensed psychologist your insurance plan may direct you to a professional who lacks the extensive education, training, and experience offered by a psychologist.

To learn more, or to schedule your first session, call or email The Happiness Psychologist today.