Wonder how your health insurance benefits work when it comes to counseling? In this post, we will explore the basics of how your insurance benefits work.
Many health insurance plans include a deductible as part of your contract. The deductible is the amount you pay each year before your health insurance plan starts paying for covered services.
For example, if your plan has a $1,500 deductible, you will need to pay the first $1,500 of the costs for the health care services you receive.
Once you have paid the deductible amount, your insurance will begin to pay a portion or all of your health care costs, depending on the specific health plan.
A copay is the flat fee you pay to see your therapist or other covered services. For example, you may have a $30 copay to go see your therapist, but a $300 copay if you were to visit the emergency room. This amount will be outlined in your health plan documents and can also be obtained by contacting your health insurance provider.
Coinsurance is the percentage you pay for some covered services, like a session with your therapist. If your coinsurance is 20% (percent), your health insurance company will pay 80 percent of the cost of the covered services and you will be responsible for the remaining 20 percent. So, if a covered service costs $100, your insurance company will pay the provider $80 and you would owe the remaining $20.
Out of Pocket Max
The out-of-pocket maximum is the most you will have to pay for your health care expenses during a plan period (usually a year) for the covered services you receive from providers participating in your health plan. No matter what, you will not pay more than this amount each plan period for covered services.
So, if your maximum out-of-pocket is $5000, any amount beyond that will be covered 100 percent by your healthier insurer.
Payments by your health insurer are typically based on discounts the insurer negotiates with doctors and hospitals. Your insurer will pay your claim based on the rate it has agreed on with the doctors, hospitals, or health care facility in your plan network.
How Provider Payment Works
On the day of your appointment, you will pay the copay or coinsurance as dictated by your insurance provider to the health care provider. Once services are completed (i.e. the therapy session has finished), the company will then bill your health insurance for their portion. At this point, the healthcare provider will wait for further reimbursement from your insurance plan.
Things to know about using insurance
In order to bill your insurance company, your provider or therapist will be required to provide a diagnosis and the type of therapy that was provided (called a CPT code). The most common CPT codes used in therapy are for an initial intake psychiatric diagnostic session (your first session) and regular follow-up psychiatric sessions (each additional counseling session).