Does Health Insurance Fail Mental Health & Substance Abuse Needs?

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According to the National Institute of Mental Health about 21 million adults in the United States had at least one major depressive episode in 2020 [1]. Over 40 million adults in the U.S. have anxiety disorder [2]. In 2021, 61.8 million Americans used illicit drugs and 94% of those with substance abuse disorder did not receive treatment [3]. May is Mental Health Awareness month, a good time to evaluate whether or not you need help with mental health or substance abuse. It’s also a good time to review your current health insurance policy to see if the services you require are covered.

Key Takeaways

  • Your health insurance will cover just as much for mental health as it does physical health.
  • If you have a high deductible health insurance policy, you may have to pay for therapy out of pocket.
  • Telehealth has been helpful and convenient for many people suffering from mental health and substance abuse disorders.
  • There are legal challenges with using telehealth if a patient is acutely mentally and with getting prescriptions for medications that are controlled substances.
  • Getting the proper help for mental health issues is important and there are also steps you can take to help with symptoms.

Health Insurance Covers Mental Health and Substance Abuse – But Not Always

If a health insurance plan is part of a state- or federally-managed marketplace — like or Covered California — it must cover mental health services, including substance abuse and behavioral health treatment. If you have a good individual private plan and you go out-of-network, your insurance company may reimburse you as much as 80% of each session fee, depending on the therapist’s rate. If you have a policy with limited coverage and a high deductible, you may be paying for most, if not all, your therapy sessions as well as physical health providers.

Under the law, if a private insurance plan provides coverage for mental health and substance use services, the plan's coverage must be equal to physical health services.

For example, benefits must have equal treatment limits, such as:

  • Number of days you can stay in the hospital
  • How often you get treatment

However, a high deductible plan will be limited for both physical health and mental health..

Keep in mind that if a private insurance plan provides coverage for mental health and substance use services, the plan's coverage must be equal to physical health services.

For example, benefits must have equal treatment limits, such as:

  • Number of days you can stay in the hospital
  • How often you get treatment

For these reasons, it’s important to shop for health insurance knowing all the gaps there may exist in your coverage needs.

Post-Covid Surge in Mental Health Issues

According to the National Library on Medicine, during the coronavirus pandemic, there was a surge in cases of depression, anxiety, stress, panic disorder, obsessive-compulsive disorder, somatic symptoms, sleep disorders, delirium, psychosis, self-mutilation, and suicide. People with existing mental health conditions worsened and many exhibited suicidal behaviour due to the changes in their daily routine and hiccups on receiving required care due to the virus. School and university closures have left young people vulnerable to social isolation, which affects them still today.

It’s important for people with new or existing symptoms of mental illness to seek care. Telehealth has been very helpful for some people, but it is not without its problems. See more below.

Telehealth for Mental Health: Pros and Cons

While it may be convenient to talk to a psychiatrist or licensed psychiatric nurse on your phone or via video, some pharmacies may not fill prescriptions if you’re not seeing the provider in person. This is especially true for controlled substances prescribed for anxiety, ADD, ADHD and other disorders.

There are also other legal issues, which may require that some disorders only utilize face-to-face counseling, based on the nature of these disorders. For instance, if the patient is acutely mentally ill or poses a risk to themself or others, they may have to seek in-office counseling [4].

What Happens If I Go Out of Network for Mental Health Treatment?

While therapy is covered by health insurance, there are gaps if you go out of network. If a therapist you want to see is not in your health insurance network, you will have to pay the full price of the session first. You may have to issue a superbill to your provider to be reimbursed, and you will likely not be reimbursed in full.

A superbill is a document similar to a receipt or invoice that itemizes the services you have received under the therapist's care. Providers who can submit a superbill generally include:

  • Psychologists
  • Counselors and psychotherapists (therapists)
  • Clinical social workers
  • Psychiatrists
  • Psychiatric nurse practitioners
  • Mental health or substance use clinics or facilities

Once the superbill is submitted, your insurance company will decide what they are willing to pay. Read on for more details.

For What Types of Disorders Is Therapy Covered by Insurance?

Your health insurance can cover behavioral therapy for a wide range of disorders, including, but not limited to:

  • Substance abuse
  • Depression
  • Bipolar disorder
  • Anxiety disorders
  • Bulimia nervosa
  • Anorexia nervosa
  • Obsessive-compulsive disorder
  • Autism
  • Schizoaffective disorder
  • PTSD

It costs less to find providers within your network and in some cases you may not have coverage for treatment, if say, you have a high deductible that you must meet first.

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If the ACA Says Mental Health Is Covered, Why Am I Not Getting a Full Refund?

An insurance company doesn’t have to pay the full rate your therapist charges. They only have to pay their portion of the bill based on average prices for the same service in your area. So, let’s say your coinsurance is 50% and your therapist charges $200 per hour, but your insurance company considers $100 to be a “reasonable and customary” rate, they will only pay your therapist $50 per session. This leaves you covering the remaining balance of $150 when you only expected to pay $100.

This sort of scenario is not uncommon with therapy. Sometimes, patients who need to see a specific doctor end up buying private health insurance that that particular therapist accepts. Otherwise, they have the choice of finding an in-network provider or paying a large share of the price to see their preferred provider.

It’s always a good idea to be communicative with your carrier before you make assumptions about costs.

High Deductible Plans and Therapy

Don’t expect a high-deductible bronze plan to pay for your therapy sessions. If you have a $6,000 deductible, you are responsible for paying up to $6,000 in out-of-pocket expenses before your standard copay applies. In this scenario, seeing an in-network therapist and out-of-network therapist are the same cost.

If you have a high-deductible health insurance plan, you may have to pay for all therapy sessions until you meet that high deductible.

Consider whether or not it benefits you to buy a more robust, higher-tier plan if you need coverage for therapy. Check for caps on sessions and how much you are responsible to pay in coinsurance and/or copays.

Do All Therapists Accept Health Insurance?

Unfortunately, not all therapists accept health insurance, especially in cities like Boston, San Francisco, New York, and Washington D.C. They already have heavy caseloads and do not work with health insurance companies.

Are In-Patient Facilities for Mental Health and/or Substance Abuse Covered?

Every plan’s copayment and coinsurance is different, so it’s important to contact your carrier in advance and find out what’s covered and how much. What you should be aware of is that under the law, you must be given the same coverage for mental health and substance abuse disorders as that offered for physical health.

To get the most coverage, it’s advised that you stay within your network and network facilities.

Tips on Improving Your Mental Health

tips on improving mental health infographic

While it’s vital to seek professional help for any mental health or substance abuse issues, there are some things you can do to help combat some symptoms of stress and mild depression. Here are some things you can do on your own to improve your mental well-being.

  • Yoga
  • Tai Chi
  • Walking
  • Exercise
  • Meditation
  • Proper diet
  • Reducing screen time
  • Avoiding stressful news and activities
  • Surrounding yourself with the right people
  • Taking time off from work
  • Getting adequate sleep
  • Practicing gratitude
  • Drinking alcohol in moderation or not at all
  • Replacing negative thoughts with positive ones

A private insurance plan must provides as much coverage for mental health and substance abuse as it does physical health services.

Therapy and Health Insurance FAQs

What should I look for when buying health insurance if I need therapy?

Your best bet is to ask the insurance agent about the specific plan type you’re considering buying or call the carrier. If you’re buying through an employer, HR can lead to where you can see the deductible, coinsurance and copayments before you select a plan. Most importantly, look at their coverage or lack thereof when it comes to out-of-network coverage for therapy if that’s what you need.

Are alternative treatments like yoga, massage or acupuncture covered?

Gym and yoga classes are not covered by health insurance. However, acupuncture may be covered but up to limits, depending on your plan, but only if it is medically necessary and prescribed by a doctor. If massage is considered medically necessary, it too may be covered within limits.

Are apps like Calm and Headspace covered by health insurance?

Some insurance companies offer a premium subscription to Calm as part of their wellness programs. Both offer guided meditations and other mindfulness tools to help you achieve emotional balance.

However, these helpful apps are not a substitute for therapy associated with mental illness or substance abuse.

If you do not have health insurance or you have a plan that doesn’t adequately cover your mental health services, you can switch carriers. You may be eligible to buy a new plan outside of the open enrollment date, if you are experiencing one of several qualifying events. Otherwise, you will have to wait until Open Enrollment in late fall.

Emergency Mental Health Hotlines

  • Dial 988 for the Mental Health Emergency Hotline: You will be connected with a crisis counselor in your area.
  • 911 Emergency
  • National Alliance on Mental Illness (NAMI) HelpLine: 1-800-950-NAMI, or text “HELPLINE” to 62640. Both services available between 10 a.m. and 10 p.m. ET, Monday–Friday
  • National Domestic Violence Hotline: 1-800-799-7233
  • National Suicide Prevention Lifeline: 1-800-273-TALK (8255); Or, just dial 988
  • Crisis Text Line: Text REASON to 741741 (free, confidential and 24/7). In English and Spanish
  • Self-Harm Hotline: 1-800-DONT CUT (1-800-366-8288)
  • Family Violence Helpline: 1-800-996-6228
  • Planned Parenthood Hotline: 1-800-230-PLAN (7526)
  • American Association of Poison Control Centers: 1-800-222-1222
  • National Council on Alcoholism & Drug Dependency: 1-800-622-2255
  • LGBTQ Hotline: 1-888-843-4564
  • The Trans Lifeline is staffed by transgender people for transgender people: 1-877-565-8860 (United States)
  • Rape Abuse and Incest National Network (RAINN): (800) 656-HOPE / (800) 810-7440 (TTY)


  1. Major Depression. National Institute of Mental Health. Accessed 5/8/23.
  2. Anxiety Disorders. National Alliance on Mental Health (NAMI). Accessed 5/8/23.
  3. U.S. Department of Health and Human Services’ (HHS) Substance Abuse and Mental Health Services Administration (SAMHSA). SAMHSA Announces National Survey on Drug Use and Health (NSDUH) Results Detailing Mental Illness and Substance Use Levels in 2021. Accessed 5/8/23
  4. Perceived advantages and disadvantages of telepsychiatry. National Institute of Health (.gov). Accessed May 8, 2023.

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