Insurance 101
Ok, so you have health insurance, which likely includes mental health coverage, but it is just so dang confusing and hard to understand. Right?!
We agree.
The following is an education on everything insurance.
Here’s what you need to know about insurance:
Managed Care is a term that refers to the overarching system that governs healthcare in the United States. While it is meant to reduce the cost of healthcare, there are a lot of caveats and, frankly, shady practices that can and do happen in Managed Care all the time. Understanding how Managed Care works, as well as your healthcare rights, is paramount to accessing treatment and reducing costs.
All insurance companies in the U.S. are a part of some form of Manage Care. What’s important to know about this, is that most insurances are for profit, some insurances are government funded by taxpayers dollars and have strict eligibility requirements (i.e. Medicaid, MediCal, Medicare, etc), and few insurances are non-profit. If you have insurance that is for profit (as most people do), please remember that this for profit model is to benefit the insurance company, which unfortunately means they are less invested in your healthcare than they claim to be or appear to be.
I can talk about our broken healthcare system for hours, but I will pause here so that I can better educate you on how to get the most out of your insurance and/or teach you how to access affordable healthcare without using your insurance.
If you want to learn more about Managed Care and how your insurance operates, check out these helpful articles:
Now let’s talk insurance lingo!
Everyone’s insurance plans are different…. it really just depends on the specific plan that you purchased (HINT: please read the fine print before you sign a contract with your insurance company). However, there are some common terms you need to know to help you navigate this process.
Here is a list of common insurance terms and easy to understand definitions:
Premium: A premium is the monthly payment you make to your insurance company to secure and maintain your insurance. A good rule of thumb here…..The higher your premium, the more coverage you get from your insurance company AND the higher your premium, the lower your deductible, copay, coinsurance, etc. (see below).
Deductible: A deductible is the total cost of services you must pay out of your own pocket to the provider before your insurance company will cover any costs of service. For example, if your insurance plan has a deductible of $1500, then you will be responsible to pay 100% for any services you receive until you meet $1500. After the deductible is met, your insurance will start covering more services, but you will want to read the fine print of your plan, to know exactly how much they will cover.
Copay: A copay is a set amount that you pay your provider at the time of service. It usually ranges from $20-40.
Coinsurance: Coinsurance is like a copay, but instead of a flat fee, it is paid at a percentage of the cost of the service, and is paid to the provider at the time of service. For example, if you have coinsurance of 20% and your treatment is $115, then you will pay coinsurance of $23.
Out-of-Pocket Maximum: Out-of-Pocket Maximum is the total amount that you will have to pay out of your own pocket before insurance will cover all services at 100%. For example, if your out-of-pocket maximum if $10,000, you will have to meet this total before insurance will cover 100% of the services.
In-Network: In-Network is a list of providers who are contracted with the insurance company, meaning they are pre-approved to work with and bill your insurance company for the services they provide you. Providers can ONLY bill your insurance directly if they are in-network.
Out-of-Network: Out-of-Network providers are providers who are NOT contracted with your insurance and, therefore, cannot bill your insurance directly. However, your insurance plan likely does have some out-of-network coverage and you will need to contact them to find out exactly what this is. Most insurances cover out-of-network providers and services at about 40-80%. In this process, you pay your provider their full fee at the time of service, then submit the Superbill to your insurance company. You insurance company will then reimburse you a portion of the cost. For example, if you work with an out-of-network provider and you pay out-of-pocket for a service that costs $150, and your insurance covers 50% for out-of-network, then your insurance will reimburse you a total of $75 for that treatment.
*An important note: all of these terms (deductible, copay, coinsurance, and out-of-pocket maximum) start over from 0 at the start of the New Year or your insurance term year. So, if you do hit your deductible or out-of-pocket maximum within the year, you will have to start over from 0 the following year.
Now that you’ve got the basics, here are some important reasons why your provider may not accept insurance:
Payment from your insurance to your provider can take weeks or months, are unreliable, and/or at a a very low rate. When providers are contacted as in-network with your insurance company, most insurances cover costs at an extremely low rate, one that cannot adequately support the provider without a large caseload and risking burnout. In addition, you as the patient have more pull with the insurance company than the provider does. You are more likely to get reimbursed at an appropriate fee than any provider. Working with in-network providers ensures your insurance company makes a large profit.
The provider doesn’t want treatment to be restricted to rules or practices of the insurance company. When you work with your insurance to cover the cost of treatment, you are allowing insurance to dictate that treatment. Both you and the provider are at the mercy of the insurance company, and your insurance company will often put rigid limitations on healing opportunities and treatment options, incising type of treatment and length of treatment.
Insurance requires a diagnosis and you or your provider wants to avoid labels and stigma or you want therapy, but don’t meet criteria for a diagnosis. If you want any treatment to be covered by your insurance, you must meet criteria for a diagnosis that meets Medical Necessity, which is a list of pre-approved diagnoses that insurance companies will pay for. If you have a diagnosis that does not meet Medical Necessity, or you want to go to therapy but you don’t have a diagnosis at all, then your insurance will cover nothing.
Documentation and billing is time consuming and labor intensive. To get a service covered by your insurance company, your provider has to keep very detailed records that are dictated by the insurance company, including documentation and billing. The records can be accessed by the insurance company at any time, reducing your confidentiality. And the practices and the time spent doing documentation and billing are not covered by insurance and, therefore, your provider is not compensated for the time spent doing these services.
Many diagnoses or treatment modalities are not covered by insurance. (See #3 above).
The provider may not be unable to get on insurance panels because the insurance company is closed to new providers. Now this is a super tricky one, that is often super shady. Your provider may actually want to get contracted with the insurance company, but the insurance company won’t let them do so, stating they are “full.” You insurance company determines when they are open for contracting, who will get contracted, and sometimes will not even allow providers to complete applications for years at a time.
After paying the provider, at any time the insurance company can deny claims and demand the provider to refund the payments back to the insurance company, leaving the provider unpaid and/or you responsible for the entire cost of treatment. Talk about shady! This one is my personal nemesis. Your insurance can literally pay your provider for months or years of service and then, at any time, deny services and demand the provider to send them back thousands of dollars for services already rendered!
The provider wants to uphold your confidentiality by NOT reported personal information to your insurance company. Whenever you use your insurance to pay for treatment, your insurance company is part of your treatment, meaning they can access any portion of the treatment, for any reason, at any time. They can and do occasionally demand providers to be audited, meaning the provider must submit your chart notes and personal information to the insurance company to review.
This list is certainly not exhaustive, but I hope it does give you a better sense of how insurance works. Satya Wellness Collective is committed to offering services to you in a variety of ways. If you are interested in working with us, reach out and let us help you find a payment plan that works for you.
By Dezryelle Arcieri, LMFT, 200YTT
