The Out of Network Insurance Benefit
a therapy benefit you may not realize you have
When we apply for (or renew) our healthcare coverage, we usually focus on how much the monthly premium is. What benefits we get for the amount of money we pay. Making sure our primary care doctors are in network. Checking the cost of medications. But thinking that it probably won’t cover psychotherapy.
Not realizing we might have an out of network therapy reimbursement benefit.
Many of us don’t realize that even if our psychotherapists are out of network (OON), our plan may still offer a benefit.
And this depends on how we choose an insurance plan.
Plans are different in myriad ways, but one way depends on in network vs out of network benefits.
In network means your providers take your insurance.
Out of network means they don’t.
And many therapists are out-of-network.
In health insurance, an out of network benefit means the insurance company may reimburse you for seeing an out of network therapist. In other words, a therapist who doesn’t take your insurance.
Out of network therapist reimbursement typically comes after you have reached initial deductible.
A deductible is an amount of money you have to pay before insurance reimbursement for an out of network expense.
When an insurance company is willing to share the costs after the deductible, it is called “co-insurance.”
*There is a difference between in network and out of network deductibles.
Here’s a general example
Let’s say your out of network deductible is $5,000:
That means you have to pay the first $5,000 of out of network costs - from your pocket.
But once you reach the $5,000 deductible:
The insurance plan may split/share/cover the rest of the cost.
If you see, for example, “50% coinsurance after deductible”:
It means that the insurance company will reimburse you for up to 50% of the cost of out of network services, after you reach your deductible.
Here’s an applied example
You have an out of network deductible of $5,000 and there’s 50% coinsurance after the deductible.
You are seeing a family therapist once a week and it costs $250 per session.
After 5 months, you will have hit your $5,000 deductible ($250 per session x once a week therapy x 4 weeks in a month).
For the remaining 7 months of the year, the insurance company may be willing to reimburse up to 50% of the cost.
This means the $250 sessions are now $125; the insurance company was willing to reimburse you for 50% of what you spent.
At this rate, seeing a family therapist weekly for one year - you’d save $3,500/year on family therapy.
Important Note: you may also see other out-of-network providers (those who don’t take your insurance). If you also submit those OON claims (receipts of service) to your insurance company - all of that money goes toward hitting your OON deductible.
This means, you may reach the deductible sooner than if you were only submitting claims from your OON therapist.
In Reflection
It is vital to make sure you understand the potential benefits your health insurance plan may offer you.
Many of my private practice clients submit invoices to their insurance companies - even though I am an out-of-network provider.
And many of them receive some form of reimbursement.
Recognizing the potential benefit that out-of-nework plans can offer - might also serve you as you choose which healthcare plan is right for you. If you know you are going to invest in psychotherapy, with an out of network therapist - you might intentionally select a plan with an OON benefit to help offset the cost.
Also, the Internal Revenue Service (IRS) allows us to tax deduct unreimbursed payments to psychologists and psychiatrists. So make sure, that at the very least, you are submitting the expenses to your accountant when it comes time to pay your taxes.
No blog can undo the broken system that is mental health care in the United States. At best, this article supports you finding some ways that may help to reduce the financial burden of the psychotherapy investment. And therapy is just that - an investment. Outstanding private therapy is designed to ensure that you receive a return on your investment that is above and beyond the financial cost that you shouldered in the beginning.