How to Know If Your Insurance Covers Therapy for 2024

Close to 44 million adults in the United States experience mental illness in any given year. Yet close to 60% don’t receive mental health services. Conditions like depression, anxiety, bipolar disorder, and post-traumatic stress disorder (PTSD) can seriously deteriorate quality of life.

Therapy can literally be a lifesaver for many of those affected, but it can sometimes be hard to find a therapist. Lack of health insurance is a significant factor keeping people out of therapy. So is confusion about insurance coverage for mental health services.

If you’re one of the millions of people who are considering therapy, you may be concerned about your level of health insurance coverage and your out-of-pocket costs. You may also be having a hard time finding a seasoned therapist who feels like a fit, plus accepts your insurance.

In this article, we’ll go over the ins and outs of insurance coverage for therapy. We’ll also provide information about finding a therapist who’s right for you.

If you have health insurance, you may assume your plan automatically covers mental health services, but that’s not always the case. Some may also have limits you’re not aware of.

In 2008, the Mental Health Parity and Addiction Equity Act (MHPAE, also known as the federal parity law) was passed. This law doesn’t require insurers to provide coverage for mental health. If, however, your policy does cover mental health, it must treat these services the same way it does other types of services. This means your insurance provider can’t, for example, charge you higher copays for therapy than it does for other specialists.

“Most policies cover some mental health services for a limited amount of time. If you’re choosing among the policies offered by your employer, carefully review what they do and don’t cover, before you opt in,” says Naomi Angoff Chedd, LMHC, BCBA, LBA, a therapist at Counslr.

Employer-sponsored insurance in companies of 50+ employees

Companies of 50 or more full-time workers are legally mandated to provide health insurance. This mandate doesn’t specify that mental health services must be included as a benefit. Even so, most large companies, including those that are self-insured, do provide coverage of therapeutic services.

Don’t, however, assume that this type of coverage is provided for in your plan. Often, large companies offer several plans for their employees from which to choose. You may have the option of changing plans at various times of the year. Check each plan against the other to determine if the coverage you need is in there. Weigh this against your monthly premium cost, and out-of-pocket costs. In some instances, the best plan for mental health services may be cost-prohibitive for your budget.

Employer-sponsored insurance in companies with fewer than 50 employees

Small companies that employ fewer than 50 people aren’t legally required to provide health insurance to their employees. For those that do, mental health services and substance use disorder services must be included, no matter where or how the plan is purchased.

Health Insurance Marketplace plans

Under the Affordable Care Act, all plans purchased through the Health Insurance Marketplace must cover mental health services and substance use disorder services.

All Marketplace plans, whether they’re state or federally managed, include coverage for mental health. This pertains to individual plans, family plans, and small business plans.

Plans and their coverage vary by state. States also offer several plan options, which vary in coverage and cost.

CHIP (Children’s Health Insurance Program)

CHIP provides federal funding to states so that they can provide low-cost health insurance for low-income households with children who aren’t eligible for Medicaid. CHIP coverage varies from state to state, but most provide a full array of mental health services, including:

• counseling
• therapy
• medication management
• social work services
• peer supports
• substance use disorder treatments

The MHPAE requires most CHIP programs to provide parity protections for mental health and substance use disorder services. This ensures that copays, coinsurance, and deductibles for therapy and other mental health services are the same as those for medical and surgical benefits.

Medicaid

All state-run Medicaid plans are required to cover essential health benefits, including mental health and substance use services. Medicaid plans vary from state to state, but are also subject to the MHPAE.

Medicare

Original Medicare covers inpatient behavioral health and substance use services under Part A. If you’re hospitalized, you may have a deductible per benefit period as well as coinsurance costs.

Outpatient mental health services, including an annual depression screening, are covered under Part B. You may incur out-of-pocket costs for therapeutic services, including the Part B deductible, copays, and coinsurance.

If you have a Medicare Advantage (Part C) plan, it’ll automatically cover therapeutic services at the same level or greater than original Medicare. Your costs may vary from those associated with original Medicare. You may also have to choose your providers from within the plan’s network.

There are several ways to determine what type of coverage you have. Knowing exactly what’s covered, and what your costs will be, can help you budget for services. It may also alleviate anxiety you may feel about these unknowns.

Call your insurance provider

A good way to find out if and how your insurance covers therapy is to call or write to them, and ask. Make sure to document the name of the person you spoke to, what they said, and the date. Questions to ask include:

• Do you cover all types of therapy, including in-person and online visits?
• Do I require a medical diagnosis, or diagnostic code, in order to be covered?
• Is there a cap on the number of therapeutic visits I can have annually?
• If so, when does the policy year start and end?
• Do I have to pay an annual deductible for these services?
• What is my copay amount?
• How does my copay differ for in-network and out-of-network therapists?

Register and log on to your insurance account online

Your health insurance plan’s website should contain information about your coverage and the costs you can expect. Since insurers offer a variety of plans, make sure you’re logged on and viewing your specific insurance plan and profile.

If you’re required to choose a therapist who’s in your plan’s network, a list of providers should be available online. These lists aren’t always updated in a timely manner, so double-check with the therapist you’re interested in before you book an appointment.

Check with your company’s HR department

If you’re insured through employment and need additional help, contact your human resources (HR) department, if you feel comfortable doing so.

If your company doesn’t offer insurance that covers mental health services, you may wish to discuss your need for such a plan. In some instances, they may be willing to accommodate you, either with a new plan, or with an alternative means of payment.

Ask the therapist if they accept your insurance

Therapists and other healthcare professionals often change the insurance plans they’re willing to accept and may have opted out of your plan. If this is the case, ask them if they’d be willing to work with you on a sliding scale at a reduced rate.

First, you can’t be penalized for having a pre-existing condition or prior diagnosis of any type of mental illness. For that reason, you should be entitled to mental health services from day one of your plan’s start date.

Things that might affect when insurance coverage kicks in:

• After prior authorization: Some services may require pre-authorization before you can obtain coverage for them.
• After meeting a deductible: You may also have to meet an out-of-pocket deductible before your plan starts to cover therapy. Based on the type of plan you have, this amount may be significant.
• After spending a minimum: In some instances, your plan may require that you pay a specified dollar amount on medical services before your coverage for therapy can start.

Insurers cover only treatments that are considered medically necessary. Some mental health services that may be covered by insurance include:

• psychiatric emergency services
• co-occurring medical and behavioral health conditions, such as coexisting addiction and depression. This is often referred to as a dual diagnosis
• talking therapies, including psychotherapy and cognitive behavioral therapy (CBT)
• unlimited outpatient sessions with a psychiatrist, clinical social worker, or clinical psychologist; in some instances, your insurer may cap the number of visits you’re allowed annually — unless your provider states in writing that they’re medically necessary for your care
• telemedicine and online therapy services
• inpatient behavioral health services received in a hospital or rehabilitative setting. Your plan may limit the length of your stay, or cap the dollar amount they’ll pay for your care per benefit period.
• addiction treatment
• medical detox services, including medications

The breadth of coverage for specific therapeutic treatments, such as the length of rehab or hospital stays, varies from plan to plan. So does the coverage and cost for medications you might be prescribed to treat your condition, both as an inpatient and as an outpatient.

Choosing to pay out of pocket

Some people who have coverage through their jobs may opt not to use it. There are a variety of reasons for this.

Insurance companies only pay for medically necessary services that require a mental health diagnosis. In these instances, they may cap the number of therapeutic visits they’ll pay for annually.

You may also have a challenging time finding a therapist within your plan. “Health maintenance organizations (HMOs) and preferred provider organizations (PPOs) offer different approaches to mental health services, like psychotherapy,” says Dr. Avigail Lev, founder and director of Bay Area CBT Center.

According to Lev, HMO plans require you to choose in-network providers, or they won’t cover your treatment at all. PPO plans also have provider networks, but typically offer some level of coverage if you go outside of network. If you choose a therapist not in your PPO, you’ll be required to pay your therapist up front, and get reimbursed by your insurer afterwards.

Many therapists don’t take any insurance. “Insurance reimbursement rates to therapists can be very low. The paperwork is also tremendously time-consuming, and takes therapists away from the work they desperately want to do: Helping their clients with mental health issues,” Angoff Chedd says.

There are many places to start your search for a therapist or counselor that you want to work with, from asking people you know to talking with your primary care physician.

Start with the in-network list

If your insurer has a network of mental health professionals, this may be a good place to start looking for a therapist. Each therapist listed should have some information about their practice and specialty areas.

Review lists from organizations for your location

The American Psychological Association provides a list of psychologists by ZIP code.

Theravive provides a list of affordable licensed therapists and counselors.

Give an Hour provides barrier-free access to veterans, rare disease caregivers, and people affected by traumas, such as mass violence and financial fraud.

You can look for a therapist through the Open Path Psychotherapy Collective. This nonprofit nationwide network offers inexpensive therapeutic options for individuals, couples, and children.

Inclusive Therapists provides access to BIPOC and LGBTQ-affirming therapists, coaches, psychologists, and psychiatrists.

The National Queer & Trans Therapists of Color Network is a healing justice organization that facilitates mental health services for queer and trans Black, indigenous, and people of color (QTBIPOC). They provide access to therapists specializing in a wide range of conditions and concerns, including mood disorders, anxiety, polyamory, addiction, and systemic oppression.

Try an online therapy platform

An online therapy platform, such as BetterHelp or Talkspace, might be a great fit to help you find a therapist. Here, you’ll be able to scroll through therapists and their specialties to determine who you might mesh with.

Therapists are fully licensed and accredited, and often, online platforms are more convenient and affordable than in-person sessions.

Explore local resources

Local health clinics and nearby community centers may offer free or low-cost mental health services.

Your place of worship, and special interest groups you’re affililated with, may offer professionally-led support groups that can be beneficial. They may also provide resources or lists of providers.

Students may be able to access therapy or counseling through their school.

Your employer may provide access to a workplace wellness program.

Local nonprofits could be a good fit, too, particularly if you’re in search of therapy focused on a certain issue, like cancer, sexual abuse, or domestic violence.

If you intend to pay for therapy out of pocket, know that psychiatrists may charge different rates per hour than other types of mental health professionals, like psychologists or licensed clinical social workers.

This may also affect the cost of your copay, if you use your insurance to pay for therapy.

Some people may be eligible for financial aid through organizations or programs, such as Medicaid, federal grants, or nonprofits. Typically, you need to meet certain income requirements to qualify. In other cases, you might be eligible for a clinical trial involving mental health treatment.

Online therapy and apps are often more affordable than in-person sessions. If you do decide to see a therapist, psychologist, or counselor face-to-face, ask if they offer any sliding scale payment options, where the rate you pay is based on your income.

Other offerings might include transportation support (to cover the cost of getting to your appointment) or pro bono (free) therapy. A therapist who’s still finishing school can also be a more affordable option.

Most health insurance plans cover some level of therapeutic services. The amount of coverage you can expect will vary from plan to plan. In many instances, you’ll have a deductible to pay before your services are covered. Copays and coinsurance may also apply.

Services, such as therapist visits, group therapy, and emergency mental healthcare, are typically covered by health insurance plans. Rehabilitative services for addiction are also included.

Therapy can be expensive, with or without insurance. There are low-cost options that can help, such as therapists who take sliding scale payments and psychotherapeutic collectives that offer steeply reduced sessions.

If you need therapy but can’t afford it, talk with your doctor or another professional you trust, such as a clergy member or school guidance counselor. There are many ways that the financial barriers between you and the therapeutic care you need can be removed.