Mental Health Insurance, Costs & Preauthorization requirements
Mental health issues impact more than 20% of US adults, yet more than half of these adults do not receive treatment.* (source: nimh.nih.gov/health/statistics/mental-illness 2021 data) Mental healthcare is critical for our well-being and while its importance is gaining momentum; the high costs associated with mental healthcare form a significant barrier to care for many. It's important to understand the nuances of insurance coverage in relation to Mental Healthcare.
Key Takeaways for Managing Mental Health Costs:
Mental health insurance is a separate policy or separate benefit within a larger insurance plan.
If you do not have mental health insurance you can still get help through subsidized low cost and free resources.
Costs of Mental health treatment correlate to: preauthorization and evaluation processes, treatment plans, prescription costs, and out-of-pocket costs associated with your insurance plan.
Patients seeking mental health treatment should speak to their insurance providers to understand the importance and impact of pre-authorization requirements as it relates to timing and costs of treatment.
Uninsured patients should speak to their provider and request cost savings and payment plans. Refer to our article: EAPs and other suggestions to lower the costs of mental health for uninsured and insured.
Mental Health Insurance Basics
According to the National Council for Mental Wellbeing, 42% of the US population, regardless of insurance status, reported high costs and poor insurance coverage as the primary barrier for accessing Mental Healthcare. Mental Health Insurance is a separate policy or separate benefit within a larger insurance plan and utilizing this insurance has its own set of requirements.
While costs will vary depending on the plan, Mental Health Insurance covers the cost of Mental Healthcare specifically including:
therapy sessions
psychiatric evaluations
hospitalizations
medication
Insurance Preauthorization Requirements
One thing to keep in mind regarding mental health insurance coverage are the preauthorization requirements. Preauthorization is a process in which insurance companies require hospitals and healthcare providers to get approval before the patient can receive certain types of medical treatment. This process ensures that the treatment is medically necessary for the patient's diagnosed condition and helps prevent unnecessary or inappropriate treatments while keeping medical costs under control. Preauthorization requirements for mental healthcare can be time-consuming and often delay access to physician recommended treatment. Some common preauthorization requirements for mental health services may include:
Diagnosis: A mental health diagnosis must be made by a qualified healthcare professional to determine the necessity of treatment.
Treatment Plan: A detailed treatment plan that includes the proposed services and their duration must be developed by the healthcare provider and submitted to the insurance company.
Medical Necessity: The insurance company will review the proposed treatment plan to determine if it meets their criteria for medical necessity.
Out-of-Network Providers: If a patient wishes to see an out-of-network provider for mental health services, preauthorization may be required before the insurance company will cover the costs.
Number of Visits: The insurance company may limit the number of visits that are covered for certain types of mental health services, such as therapy or counseling.
Prior Authorization: Prior authorization may be required for certain medications used to treat mental health conditions.
It is important to check with the specific insurance plan to determine their preauthorization requirements for mental health services. This will help decrease anxiety and help with planning accordingly for unexpected delays in treatment.
If you are cash pay, it is important to inform your provider and their billing team as you may be able to negotiate discounted rates or payment plans. Additionally, your provider may be able to adjust treatment recommendations to maximize savings. Finally, be sure to save all your receipts on medical expenses for tax deductions. For more on negotiating with providers see below.
Prescription Coverage for Mental Health Treatment
When it comes to the costs associated with mental healthcare and prescription insurance coverage, it's important to understand that not all mental health treatments and medications are covered by insurance plans. Some insurance plans may have a limit on the number of therapy sessions covered, while others may not cover certain types of therapy like hypnotherapy, couples therapy, or group therapy.
Prescription insurance coverage for mental health medications may also vary. Some insurance plans may cover only generic versions of medications, while others may cover both generic and brand-name medications. Patients should consult their insurance plan to understand what medications are covered and at what cost. You can then talk to your Doctors about what they are prescribing and discuss if there are less expensive options.
Many mental health medications are part of a class of drugs that require higher copay or may not be covered by your insurance. There are companies like GoodRx and other applications that can help with discounting the cost of the medication. The manufacturer of the medication may also have a company option of reduced cost which would require an application to be filled out to qualify.
Mental Health Out-of-Pocket Costs
In addition to preauthorization requirements, patients should also be aware of out-of-pocket costs associated with mental healthcare. These costs can include copayments, deductibles, and coinsurance. Copayments are a fixed amount that patients pay for each mental healthcare visit, while deductibles are the amount patients need to pay before insurance coverage kicks in. Coinsurance is a percentage of the cost of treatment that patients need to pay.
Mental health insurance plans are an important aspect of ensuring that individuals have access to proper mental healthcare. Hurdles that may present could be, not meeting preauthorization requirements, costs for therapies or inpatient or outpatient hospitalization programs, and prescription coverage could be a barrier for some individuals. Patients should consult their insurance plan or ask their insurance company for help in understanding the coverage and costs associated with mental healthcare. By preparing for your medical care, you take charge of your health and well-being, creating a brighter future for you and your loved ones.
RELATED ARTICle - Low cost mental healthcare options for insured and uninsured
Negotiate with providers
Fortunately, there are steps individuals can take to manage mental healthcare costs. While it may sound odd to barter for mental-health services, it does work in some situations.Negotiating your charges in healthcare is more of the norm in the last few years. Hospitals as well as physician providers recognize that they are saving money by not having to go through the billing process with insurance, and accepting the payment of usual and customary which is severely reduced from the amount charged. Through negotiation you save the practice time and money with billing and collections by paying cash, take advantage of that opportunity! When it comes to past-due bills, you might have more power thanks to recent changes in how medical debt factors into credit scores. As The Wall Street Journal has reported, most medical collection debt will soon be removed from consumers’ credit reports. Additionally, the three main credit bureaus—Experian, Equifax and TransUnion—will be increasing the amount of time before medical debt in collections appears on credit reports to one year from six months. The cushion gives you extra time to negotiate and work out a payment plan.
