Understanding Medical Insurance Plans: A Guide for Mental Health Patients

What it all means, and what it might cost you

I'm glad you're here! This post aims to answer your questions about using insurance to cover the cost of treatment at Anchored Soul. During our intake process, one of the most common questions we hear is: “How does my insurance work?” It’s a great question and an important one. Insurance can be confusing, especially when you’re focusing on your health. So, here’s a breakdown of the main types of medical insurance plans and what they mean for you in terms of cost, access, and flexibility.

We’re keeping this focused on how these plans affect you as the consumer, particularly regarding mental health care.

Understanding Key Insurance Terms

Before we dive into the different plan types, let’s clarify some commonly misunderstood insurance terms. These directly affect how much you’ll pay for therapy, whether you're in-network or out-of-network.

Copay

A copay is a flat fee you pay each time you have a session. For example, you might have a $25 copay for mental health visits. It doesn’t matter what the therapist's full fee is; your insurance pays the rest, and you just owe the copay. You usually start paying copays right away, even if you haven’t met your deductible.

Deductible

The deductible is the amount you’re required to pay out-of-pocket each year before your insurance starts covering services. If your plan has a $2,000 deductible, you’ll be responsible for 100% of the session cost (at the insurance rate) until you’ve paid $2,000 for covered services. Some plans have separate deductibles for in-network vs. out-of-network services. Until your deductible is met, you’ll be paying the full contracted rate for sessions.

Coinsurance

After you’ve met your deductible, some plans don’t switch to a simple copay; they instead ask you to pay a percentage of the session cost. This is your coinsurance. For example, if your plan covers 70% of a therapy session, you’ll be responsible for the remaining 30%. Let’s say the insurance-approved rate for a session is $100. If your coinsurance is 30%, you’ll pay $30, and insurance will pay the other $70.

Important Note About Rates: They're Set by Insurance

We often get asked, “Why is my copay this amount?” or “Why does my insurance only cover a portion of the session?” It’s important to know: the rates are set by your insurance company, not by your therapist or our practice.

When a practice like ours becomes in-network with an insurance plan, we sign a contract that includes a specific fee schedule. This means for every CPT code (the medical codes used for services like therapy), the insurance company sets:

• The total amount they will reimburse

• How much the patient is responsible for (your copay, deductible, or coinsurance)

• Any session limits or authorization requirements

  
  

In-network therapists legally cannot charge more than the contracted rate, even if their standard fee is higher. That also means we can’t waive fees or adjust your copay; your insurance plan decides that structure.

Types of Insurance Plans

Understanding the different types of insurance plans can help you navigate your mental health care options more effectively. Here’s a brief overview of the most common plans:

1. HMO (Health Maintenance Organization)

How it works: You must choose a primary care provider (PCP) and get referrals to see specialists. You can only use providers in your network.

For therapy: You must see an in-network provider. Out-of-network services usually aren’t covered.

2. PPO (Preferred Provider Organization)

How it works: You can see any provider without a referral. Both in- and out-of-network care are covered, but at different levels.

For therapy: You have the freedom to choose your therapist. Out-of-network sessions may be reimbursed partially after you meet your deductible.

3. EPO (Exclusive Provider Organization)

How it works: You can see any in-network provider without a referral. No coverage for out-of-network care (except emergencies).

For therapy: You must use in-network therapists.

4. POS (Point of Service)

How it works: You need a referral to see specialists. There’s limited out-of-network coverage.

For therapy: You may require a referral from your PCP. Some reimbursement for out-of-network therapists is available, but often lower than PPOs.

5. HDHP (High Deductible Health Plan) + HSA

How it works: You pay out-of-pocket until your high deductible is met. You can use a Health Savings Account to cover medical expenses with pre-tax dollars.

For therapy: You’ll pay the full cost upfront until you meet your deductible. You can use your HSA to help with costs.

So, What Should You Do?

Here are some steps to help you navigate your insurance plan effectively:

• Call your insurance company (use the member services number on the back of your card) and ask:

- What’s my copay or coinsurance for outpatient mental health?

- What’s my deductible, and how much have I met?

- Is Anchored Soul Counseling in-network? Our NPI2 is: 1619515962 (in case they ask).

- Do I need a referral or pre-authorization?

• Ask us if you're unsure. We deal with this every day and are always happy to help you interpret your plan’s fine print.

  
  

Final Thought

Mental health is a vital part of your overall well-being. We want cost and confusion to be as small a barrier as possible. Knowing how your plan works can help you make empowered choices about your care. Our goal is to help make therapy as accessible as possible, so we are glad to support you however we can. If you ever need help figuring out your benefits, we’re just a phone call or email away.

Glossary of Key Terms

• Copay: A fixed amount (e.g., $25) you pay for each therapy session. You typically pay this at the time of service.

• Deductible: The amount you must pay out-of-pocket for covered services each year before your insurance begins to pay.

• Coinsurance: A percentage of the cost you pay after meeting your deductible. For example, if your coinsurance is 30%, you pay 30% of the session fee, and your insurance pays 70%.

• Out-of-Network: A provider who does not have a contract with your insurance company. You may still be able to see them, but you'll pay more or have to submit claims for partial reimbursement.

• In-Network: A provider who has a contract with your insurance company. You’ll typically pay less when seeing in-network providers.

• HSA (Health Savings Account): A special savings account used to pay for qualified medical expenses with pre-tax dollars. Only available with High Deductible Health Plans (HDHPs).

• Referral: A written order from your primary care provider (PCP) required by some plans before you can see a specialist, including therapists.

• Authorization: Insurance plans require pre-approval before covering therapy sessions. This is usually called “prior authorization.”

  
  

Disclaimer

The information provided in this blog post is for general educational and informational purposes only and is not intended as legal, insurance, or medical advice. While we strive to keep the content accurate and up to date, insurance plans and coverage details can vary widely and change over time. Patients are responsible for verifying their individual benefits directly with their insurance provider. Coverage decisions, reimbursement rates, and out-of-pocket costs are determined solely by the insurance company and are subject to the terms of your specific plan. This blog does not establish a provider-patient relationship, and no guarantees are made regarding coverage, benefits, or costs for services rendered by our practice or any third-party provider. For questions about your specific insurance plan or mental health coverage, please contact your insurance carrier directly.