Using health insurance for counseling – YES or NO?

A decision to use insurance depends entirely on your situation. When seeking mental health treatment, using insurance to pay for sessions should be considered carefully.  There are many things that individuals don’t know about insurance. I will explain some of it here.

The first thing to know is that insurance companies only pay to treat diagnoses. Therefore, if you want insurance to pay for mental health care, you MUST have a diagnosis. Diagnoses range from minor (adjustment disorders or generalized anxiety) to severe (post-traumatic stress disorder or major depressive disorders). Even if you seek counseling for general life stressors, you will end up with a diagnosis when opting to use insurance. Any diagnosis reported to your insurance company becomes part of your permanent medical record. Make sure to ask your therapist about your diagnosis!

What happens once I get a diagnosis?

The law requires that insurance companies store patient health information to calculate an annual “patient risk score” representing the specific patient’s disease burden for the Department of Health and Human Services (DHHS). Each year those scores are calculated and sent to the government. Companies, like life insurance, will use this data to determine individual rates and risks. However, it is unknown precisely how else the government uses these patient risk scores.

How might a diagnosis impact me? 

Let’s compare this to car insurance. If the repair cost of a minor fender bender was less than $1,000, would it make sense to use car insurance or pay for the repairs out of pocket? Will using insurance to pay for the repair affect my premium? What are the benefits of paying out-of-pocket? Advantages to paying for repairs out-of-pocket might include avoiding hefty premium increases and potentially losing safe driver discounts. However, using insurance is sometimes unavoidable. When damage is significant, or you cannot afford the out-of-pocket expense- definitely use your insurance! To summarize, paying out of pocket for more minor repairs and using insurance for more extensive repairs is probably your best bet. The benefit should always outweigh the cost.

The same is valid with health insurance. If you expect treatment to be brief, it would be wise to avoid using insurance. Using insurance and receiving a diagnosis could negatively impact you in the future. Remember, insurance won’t pay without a diagnosis! Having a diagnosis will likely increase your patient risk score and negatively affect future life insurance rates. Diagnoses could also impact specific careers ex: pilots, first responders, and healthcare professionals. When able, paying out of pocket for mental health counseling is a wise choice- especially when seeking brief services. However, if you anticipate needing long-term therapy, seeking a therapist that accepts insurance might be a better option.

Another benefit to paying out of pocket is that you may get a more skilled therapist.  Many top-notch healthcare professionals can not accept the low rates that insurance companies will pay. Highly qualified healthcare professionals are invested in enhancing their skills so they can provide their clients and patients with the very best evidence-based care. Accepting the low reimbursement rates from insurance companies doesn’t compensate them for their commitment to their practice. 

What are your options?

First, find a therapist that fits your needs. If you can’t afford to pay out-of-pocket but need help, find a counselor who accepts your insurance and get the help you need as soon as possible. If you have the means to pay out of pocket and think you will only require brief counseling, go that route. You’ll avoid the diagnosis and possible adverse consequences down the road. The therapists at CARE are highly qualified, and they use modern evidence-based therapies, so clients typically experience quick results. Our average client only requires seven sessions. That is less than $1,000! 95% of our clients will never require therapy again!

Here’s a short article by SBLI that’s worth a read: /https://www.sbli.com/what-to-know-about-buying-life-insurance-when-you-have-depression-and-anxiety/