Health Insurance Coverage for Mental Health and Substance Abuse Issues

Fran
Dani Milton
April 22, 2020

Mental illnesses are a wide range of disorders that affect your mood, behavior and thinking. They include a variety of conditions such as anxiety, depression, schizophrenia, substance abuse disorders and other issues.

Suffering from a mental illness can be lonely, isolating and terrifying. Although many people suffer from one of these disorders, many don't seek help because there is still a negative stigma surrounding these issues.

Mental Health America, a community-based nonprofit organization dedicated to helping people with mental illnesses, backs these findings. Earlier this year, the organization released a 2020 study about the state of behavioral health issues within the country. Their researchers learned that 45 million Americans suffer from mental disorders. Unfortunately, 57.2 percent of these adults received no treatment for their conditions.

If you have a mental illness, you may feel as if no one understands your issues, but you're not alone. You can get professional help for your mental illness, which is usually covered by health insurance. Many insurance policies cover counseling for behavioral health and substance abuse issues. Also, you can find affordable counseling at BetterHelp.  

In today's guide, you'll learn how to access mental health coverage.

Mental Health Parity Laws in America

Most insurance plans on state health exchanges must cover mental health services since the passage of the Affordable Care Act (ACA). Although not required, many employer-sponsored insurance plans also pay for counseling for mental health and substance abuse disorders.

Insurers cannot provide less favorable benefit restrictions on mental health issues compared to medical ones. For example, when a plan has unlimited visits for chronic diseases like diabetes or cancer, the insurance company must offer similar coverage for anxiety disorders, depression, substance abuse disorders and other behavioral health issues.

The MHPAEA originally applied to group health plans and group health insurance coverage, until Congress added amendments under the Affordable Care Act to include individual health insurance coverage.

Today, the federal parity law applies to:

  • Employer-sponsored healthcare plans for companies with 50 or more employees
  • Individual health plans purchased through the health insurance exchanges created under the Affordable Care Act
  • Children’s Health Insurance Program

Also, mental health and substance abuse disorder plans must cover:

  • Behavioral health treatments, such as psychotherapy
  • Mental health inpatient services
  • Substance use disorder (commonly known as substance abuse) treatment

Your policy's benefits will depend on the state in which you live and the health insurance plans. Although the federal government requires insurance parity, it doesn’t require insurance plans to cover mental health or substance abuse issues.

Health Insurance Plan Basics

Open enrollment is the time of year when people can sign up for individual and family insurance. If you miss the deadline, you must wait another year to buy coverage unless you qualify for a special enrollment period. Learning the differences between insurance options can help you can make an informed choice when selecting mental health benefits. The coverage you receive will depend on the plan. Insurance coverage typically falls under the following categories:

  • Private health insurance
  • Federal insurance plans (Medicaid, Medicare, CHIP, TRICARE, Veterans Affairs)

Non-insurance options include:

  • Employee Assistance Plan
  • (EAP) Sliding-Scale Fees

If you have health insurance through an employer or government program, you may have fewer mental health treatment options available to you. You can still sign up for affordable coverage that has mental health benefits if you don't have a federal or employee insurance plan. Use SmartFinancial's app to compare rates, premiums, and mental health benefits offered by different insurers in your local area.

Selecting Private Insurance Plans with Behavioral Health Coverage

Your employer’s private insurance plan is an outstanding way to pay for your mental health needs. This coverage may help for much of your mental health and substance abuse treatments. Contact your insurance company if you're not sure what your plan covers. The number should be somewhere on the back of your insurance card.

If you have an individual or family plan, you may also be covered. Again, call the number on your card to get the specifics about whether or not you must select a provider from a network of doctors.

If you’re shopping for health insurance during the open enrollment period or after a special qualifying event, check the plans’ benefit description to get the coverage you need. Most private insurance policies will only cover services from a network of counselors and mental health providers. They will also have a list of facilities where patients can receive treatment.

If you're selecting a new health plan at work, check each one to see if it offers the benefits you need. Insurance packages with more expensive premiums may offer better mental health coverage and save you money over the long run over cheaper plans.

Mental health benefits must have equal treatment limits, which means that they must provide coverage for mental health and substance use services equally to what they cover in physical health services. These include:

  • The number of days patients can stay in the hospital
  • How often you’ll receive treatment for your mental health issue.
  • You’ll also need to find out how much you’re responsible for paying on your own.
  • Out-of-pocket maximums (the total amount you’ll need to pay)
  • Co-payments (the fixed amount you’ll pay for a health care service)
  • Co-insurance (your share of payment for a healthcare service)
  • Deductibles (the amount you’ll have to spend before your insurer begins payment).
  • Parity (This is equality of treatment costs. If your insurer covers out-of-network costs for medical problems, it should do the same for behavioral health issues under the federal parity act).

Most private insurance plans available through an employer will carry the following mental health services:

  • Inpatient hospitalization
  • Partial hospitalization
  • Outpatient mental health treatment
  • Emergency care
  • Prescription drugs

Additional Questions to Ask about Private Insurance & Mental Health Coverage

If you are seeking insurance coverage for a mental health or substance abuse issue, you should ensure that you get the most amount of coverage for your money. The National Alliance on Mental Illness has provided several tips for patients evaluating insurance plans. Here are some things to keep in mind.

Is your plan affordable? Compare health insurance plans according to monthly premiums, co-pays, co-insurance and deductibles to ensure you’re getting an affordable plan that meets your treatment coverage needs. When selecting a plan, you should not only consider the price of your premiums. You’ll also need to know how much your co-pays and co-insurance will cost you over time.

Does your insurance plan have a broad network of therapists and specialists? This is another issue you should consider when choosing insurance. Your insurer should have a wide array of qualified professional counselors available. Some therapists don’t take insurance at their practices and some only take specific types of insurance, so you should ask if your plan will cover you for out-of-network providers you have one in mind.

Will your plan cover prescription medicines? Many patients need medications to manage their conditions. Compare plans to find an affordable one that will pay a good portion of the costs of your medicines.

Does your insurer limit the number of mental health-related office visits? Some insurers impose limits on the number of times you can meet with your therapist. Choose insurance coverage that will allow you to make an appropriate amount of office visits based on your needs. You should also select plans that not only provide outpatient coverage but inpatient hospitalizations, if necessary.

Does your plan require co-payments and co-insurance? Most patients will need to pay these out-of-pocket expenses to see their counselor, although your insurer may cover the rest of your service. For example, you may have to pay a $25 copay for your office visits.

What is your insurance deductible? This money is the amount you’ll pay in your insurance claim before the coverage kicks in, and the company starts paying for your fees. Depending on your deductible, you may have to pay $500 - $5,000 before your insurance company will begin providing mental health coverage.

Ask your mental health provider if they accept your coverage. Don’t assume you’re covered by the insurance plan you have. When you schedule an appointment with a counselor, find out if they accept your insurance coverage. If they do, ask if you need to pay them directly or if they will bill your insurer directly. Some providers require patients to pay in full. They will later submit the claim to your insurance company, who will reimburse you. Or, if you’re not happy with your insurance coverage, switch health plans.

Select In-Network Therapists to Ensure Your Therapy is Affordable

It takes time to build a trusting relationship with a competent, compassionate therapist. Once you establish a genuine bond with a psychologist, you may not be able to duplicate this connection with another person if you need to start over. This is why it’s critical to select an in-network professional for your therapy sessions. If you choose an out-of-network therapist, your treatment may be unaffordable. Milliman, an actuarial firm, conducted a study that found that office visits with therapists are five times more likely to be with out-of-network providers and much more expensive than a primary care appointment with physicians.

These expenses can disproportionately affect parents who hire therapists for their children since there is a scarcity of child psychiatrists and psychologists. The best professionals that can treat their children’s issues may be listed outside their insurance plan’s network. If you have a child you’d like to get started in therapy or to see a psychiatrist, you may end up considering switching insurance companies so your costs are covered.

Make Sure Your Insurer Covers Your Psychiatric Medications

When you’re searching for a new therapist for yourself or your family member, make a list of in-network doctors and therapists because some may not be taking new patients. You should also download a formulary (list of medications) that your insurance company will cover. Your therapist can select a medication from this list for an affordable and effective treatment. If your insurance plan doesn’t provide enough coverage, you may have to switch health insurance plans to get a better deal.

Medicaid and Mental Health Services

Medicaid is a public health insurance program operated by states and the federal government. It is one of the largest payers for mental health services within the nation. These plans provide low-cost treatment for mental health issues and substance use disorders to their beneficiaries and the Children’s Health Insurance Program recipients.

This federal insurance program provides more limited options than private health insurance plans. Their services include counseling, therapy, medication management, social services work, peer supports, and substance abuse disorder treatment.

How Medicare Covers Mental Health

Medicare is federal health insurance for people 65 years old, end-stage renal failure, and individuals under 65 years old with certain disabilities. This program does cover a wide range of mental health services for beneficiaries.

  • Medicare Part A covers inpatient mental health care you can receive in a hospital. This insurance will pay for your rooms, meals, nursing care, and other related services and supplies.
  • Medicare Part B covers mental health services outside a hospital setting, including visits with psychologists, psychiatrists, and clinical social workers.
  • Medicare Part D will cover medications for your mental health condition. Each Plan D has a list of covered drugs, known as a formulary.

Medicare Advantage Plans - Do you have a Medicare Advantage Plan (like an HMO or PPO) or another Medicare Health Care plan? Check with your plan’s information to find out how to access mental health benefits. If you need to find a Medicare Advantage Plan that offers generous behavioral health options, use SmartFinancial’s app to compare available programs.

Two Non-Insurance Options for Therapy: EAPs and Sliding Scale Fees

Your employer may offer some mental health benefits through an Employee Assistance Program (EAP). These are confidential workplace services that your employer pays to help workers stay productive. Employees and their families can usually access these assistance programs for free.

EAPs aren’t designed to provide long-term treatment; however, a mental health professional can evaluate your needs and begin crisis intervention, if necessary. Your professional counselor can speak with you on topics including workplace conflicts, drug addiction, substance abuse, relationship issues, financial counseling, and grief assistance. You should check your employee benefits handbook or speak with your human resources director to see if your workplace has an EAP.

Voluntary programs provide self-referred, short-term counseling services. EAPs also offer mandated counseling, or involuntary assessment services, for companies. Some businesses require people who work in safety positions to attend counseling sessions. These may be mandatory if they work with heavy machinery, power lines, or other sensitive equipment.

EAPs also conduct random employee drug tests. If a worker tests positive, he or she will need to attend a mandatory counseling program for addictions. Employees with behavioral issues see an EAP counselor if their issues affect their job performance.

When you attend an EAP, your co-workers and boss will not know you're receiving therapy. They will not know the issues you discuss with your counselor. Unfortunately, the biggest drawback of these programs is that they only offer a limited amount of sessions. This issue can be especially difficult if you develop a good relationship with your counselor. Usually, your EAP therapist will refer you to an outside psychologist with a private practice. You'll need private insurance to pay for these counseling sessions.

If you need a new plan for mental health coverage, you can use SmartFinancial’s app by filling in your zip code below to compare coverage options and prices. You won’t have to spend hours comparing coverage and prices with local insurance companies. We’ll do all the hard work for you.

All you’ll need to do is fill out a quick, three-minute application. You’ll receive insurance quotes from multiple companies within a few minutes, along with options to buy policies online, over the phone, or in person. Fill out our quick application on this page to get started.

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