How Do I Understand My Health Insurance Benefits for Therapy?
Key Terms
Deductible: The amount you must pay out-of-pocket before your insurance benefits begin to cover costs. In some cases, certain appointments (e.g., annual wellness visits, a limited number of mental health visits) may not be subject to the deductible.
In-Network Provider: A healthcare provider who has a contract with your insurance company. When you see in-network providers, you typically pay a copay unless the visit is subject to your deductible.
Out-of-Network Provider: A provider who is not contracted with your insurance company. When you visit out-of-network providers, you usually pay the full amount up front. If your plan includes out-of-network benefits, you may submit a superbill for reimbursement.
Superbill: A form provided by an out-of-network provider, which you can submit to your insurance company for reimbursement. It includes details like diagnosis, date of service, and type of service.
Coinsurance: The percentage of healthcare costs you are responsible for after meeting your deductible.
Copay: The fixed amount you pay for a specific healthcare service, often as a percentage of the insurance company's allowed amount.
Allowed Amount: The maximum amount an insurance company will pay for a given service. Your copay is typically based on this amount.
Premium: The monthly amount you pay to maintain your insurance coverage.
Out-of-Pocket Max: The maximum amount you will pay for covered medical services in a year, including copays and deductibles.
Summary of Benefits and Coverage: A document that provides a detailed breakdown of your insurance plan’s coverage, including the costs of various services and benefits.
An Overview
As you can see, there’s a lot to understand about health insurance. You might wonder, "Why do we pay so much for insurance if we are the ones jumping through hoops to receive care?"
It’s important to note that health insurance was originally not designed with patient care in mind. Prepaid service plans emerged during The Great Depression to help hospitals and doctors secure payment for services. Insurance companies, while essential, are also businesses—they want to make money. When you use your insurance benefits, it costs them, which is why they try to limit payouts wherever possible.
To access in-network providers and insurance benefits, you pay a premium, which could be partially covered by your employer if your insurance is through them. You can typically find premium information in your employer's onboarding documents. There are different types of plans with varying premium costs:
Catastrophic plans have the lowest premiums but only cover urgent medical care and have high deductibles for all other services.
Bronze, Silver, Gold, and Platinum plans increase in premium cost, but the trade-off is lower deductibles, copays, and coinsurance as you move up the scale. A Platinum plan, for example, typically has high monthly premiums but low or no out-of-pocket costs for medical services.
As the plan level decreases, your responsibility for medical costs increases (i.e., higher deductibles and copays).
Determining the Plan for You
Just as insurance companies don't want to pay more than necessary, you don't want to overpay for coverage you don't need. To choose the best plan for you, consider how much medical care you expect to need.
Here’s how to figure that out:
Review your medical history for the past year. Don't rely on memory—log into your insurance portal or check any documents you have, like appointment records.
Take note of the following:
Your monthly premium.
The number of primary care visits.
The number of specialist visits.
Emergency visits or hospital stays.
Calculate the total amount you've spent:
Monthly premiums: Premium amount × 12 (months).
Primary care copays and specialist copays (include any amounts you paid before reaching your deductible).
This is your total healthcare expenditure for the year.
Remember, in some states, your yearly healthcare costs could be as high as your rent—sometimes even more, especially if you only receive basic care.
Now, match your usage to the corresponding plan type:
If you rarely go to the doctor, a Catastrophic plan might suffice.
If you only visit the doctor a few times a year, a Bronze plan could be a good choice.
If you need frequent specialist visits, mental health therapy, physical therapy, or regular blood work, you might want to consider a Silver, Gold, or Platinum plan.
Yes, it’s a lot of math and guesswork, but it’s crucial to understand your healthcare needs and plan accordingly.
Getting Your Plan-Specific Information
Every insurance company should provide you with a Summary of Benefits and Coverage (SBC). Don’t have it? You can access it online through your insurance portal, or you can contact your insurance company directly for a copy. If you’re on a parent’s plan, ask them to provide it.
Questions to Ask when reviewing your SBC:
Does your insurance cover X-rays or blood work? (Note: Some services may be covered, while others may be subject to your deductible.)
Are you seeking mental health benefits? Does your plan have limits on the number of sessions or allow out-of-network benefits?
How much is your deductible, and do any services become subject to coinsurance after it’s met?
