Does Health Insurance Cover Therapy and Mental Health Services?

Mental health is a crucial part of well-being and is just as important as physical health. Over the years, therapy has become more normalized and readily available, but the stigma associated with mental illness is still a major barrier for individuals seeking treatment. Mental Illness Policy Org estimates that close to half of all Americans with mental illness are not getting the treatment they need. With popular apps on the rise offering talk-therapy, meditation, and telehealth including mental health services, there are more resources available than ever to help you work on your mental health. Whether you have a formal diagnosis such as depression and anxiety, or just need someone to talk to, you may be surprised to find that there are a number of mental health services available inexpensively or even for free. The last thing you should do is put off seeking help because you assume that it would not be affordable. Here’s what you should know about accessing mental health services through your insurance plan.

Mental Health Parity Law

In 2008, federal lawmakers passed the Mental Health Parity and Addiction Equity Act (MHPAEA), which basically says if health plans do offer mental health coverage, the benefits must be comparable to medical coverage. For example, if you have a $60 copay to see a specialist such as a dermatologist, your copay for therapy must cost the same or better. The law applies to employer-sponsored health plans for companies with 50 or more employees, individual health plans purchased through the health insurance marketplace under the Affordable Care Act, and the Children’s Health Insurance Program (CHIP). The federal parity law, however, does not apply to employer-sponsored plans for 50 or less employees, some state plans (like those that cover teachers), and Medicare; however, Medicare does offer mental health services^[2].

Does my health insurance cover mental health?

Today, most insurance plans don’t require a formal diagnosis in order to seek treatment. If you have insurance, the best place to start in order to understand your health benefits is your provider. Most health insurance providers have online portals that make it easy to access all of your information in one place. The first step may be creating an account. The good news is, because of the Affordable Care Act, health insurers are required to provide an easy-to-understand summary about health coverage benefits including mental health services. In the portal, you will likely see copay or coinsurance information for various mental and behavioral health services. You may also have a deductible that must be met before the plan starts paying mental health benefits—this could be anywhere from $500 to more than $5,000, depending on the plan.

Just like medical health benefits, it’s best to choose in-network providers to keep costs low. Out-of-network mental health professionals may be too costly to sustain ongoing, long-term treatment. If you are still unclear on what mental health coverage is available to you, you can also call the number on the back of your insurance card to speak with a representative.

Employer-Sponsored Health Insurance Plans

One of the benefits of employer-sponsored health plans is that there is usually a human resources representative that can help you better understand your medical and mental health benefits.

Companies with 50 or more full-time employees are legally obligated to provide health insurance that also covers mental health services. Smaller companies with 50 or fewer employees are not legally required to provide health coverage, and if they do, the Mental Health Parity and Addiction Equity Act (MHPAEA) does not apply. However, many small business owners may choose a plan with this coverage included^[1].

In addition, many businesses add optional benefits such as a Flexible Spending Account (FSA), Health Savings Account (HSA), or an Employee Assistance Program (EAP), which can help reduce costs by using funds that are put aside before taxes, allowing employees to access health care at a discount.

Affordable Care Act Health Insurance Marketplace

As of 2014, under the Affordable Care Act (ACA), all plans purchased through the Health Insurance Marketplace must cover 10 essential health benefits. These include mental health services and substance use disorder services, such as rehabilitation. The ACA also ended annual and lifetime benefit caps and for individual and small-group markets eliminated medical underwriting, which is the process of evaluating a health insurance applicant’s medical history. Plans can no longer deny coverage or impose cost barriers because of preexisting mental health conditions^[6].

Medicaid

All state Medicaid programs provide some mental health services, which often include counseling, therapy, medication management, social work services, peer supports, and substance use disorder treatment. The state decides which mental health benefits to offer^[3].

Children’s Health Insurance Program

The Children’s Health Insurance Program (CHIP) plays a vital role in financing behavioral health services for low-income children^[4]. This program requires that children enrolled in Medicaid receive a wide range of medically necessary services including mental health benefits. CHIP is administered by states according to federal requirements and is funded jointly by states and the federal government^[5].

Medicare

Generally, Medicare is available for people age 65 or older, younger people with disabilities, and those who have kidney failure requiring dialysis or transplant, known as End-Stage Renal Disease. Medicare premiums are based on your modified adjusted gross income or MAGI. That's the total adjusted gross income plus tax-exempt interest. Regarding coverage for mental health, here’s the breakdown of what each plan covers according to MentalHealth.gov:

Medicare Part A (Hospital Insurance) covers inpatient mental health services you would receive in a hospital, such as the room, meals, nursing care, and other related services and supplies. There is no additional premium for this health coverage.

Medicare Part B (Medical Insurance) helps cover mental health services that you would generally get outside of a hospital, including visits with a psychiatrist, clinical psychologist, or clinical social worker, and lab tests ordered by your doctor. Unlike Part A, everyone must pay for Medicare Part B if they want it. This monthly premium is deducted from your Social Security, Railroad Retirement, or Civil Service Retirement check. If you do not get any of these payments, Medicare sends a bill for your Part B premium every 3 months.

Medicare Part D (Prescription Drug Coverage) helps cover medications used to treat mental health conditions. Each Part D plan has its own list of covered drugs, known as a formulary. Learn more about which plans cover various drugs. Like Part B, the Medicare Part D premium is an additional cost determined by income. Even for low-income Medicare beneficiaries, there are no Medicare Part D plans that are totally free, but there may be no (or a low) monthly premium, no deductible, no coverage gap, and very low drug costs in this case.

If you get your Medicare benefits through a Medicare Advantage Plan (such as an HMO or PPO) or other Medicare health plan, check your plan’s membership materials or call the plan for details about mental health benefits. If you get your Medicare benefits through traditional Medicare and want more information, view the pdf Medicare and Your Mental Health Benefits. To see if a particular test, item, or service is covered, visit the Medicare Coverage Database.

Insurance coverage of mental health services has improved greatly in the past decade and is something everyone should consider taking advantage of. Remember to check your plan’s membership materials or call the plan for details about your specific mental health benefits. You should never avoid seeking mental health services because you think you can’t afford it—there are always options.

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