Using Insurance
Did anyone ever teach out about insurance and how to use it?
No? Same here. That’s why we put together this guide, so you can make the most of the benefits you already have.
Let’s start at the beginning. Your employer offers healthcare coverage and you’re enrolled. What the heck does that even mean?
You and/or your employer pay the insurance premium in order to have coverage. This is paid monthly and probably taken out of your wages automatically, if you contribute towards it.
Insurance plans typically cover services in two ways:
Deductible plus co-insurance, or
Co-pay
More about these terms:
Deductible:
What you pay before insurance starts to pay.
It resets yearly and will be based on the insurance-negotiated rate for a service, which is usually lower than the provider’s out-of-pocket cost.
Co-insurance:
The percentage of the insurance rate that you’d pay. Insurance would pay the rest.
It tends to be about 30% for in-network providers, and 30-70% for out-of-network
Copay:
The flat fee your pay for the service. Insurance would pay the remainder.
Copays typically range from $10-50 per visit.
Okay, time to add on a little more. Here are a few more terms you’ll see.
These terms may not come up as often, but are still good to know about.
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This is sometimes required when insurance wants to verify that the services you’re looking for are “medically necessary.” You can call insurance to confirm if it’s needed. If you do, visit your primary care doctor to have the service “prescribed.” This may be needed for assessment.
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The maximum you’d pay for services in a year. This includes your deductible. After you’ve reached this limit, insurance will cover services in full. No more copays or co-insurance! This is helpful if you know you’ve got a year of high medical expenses, so you can get multiple procedures done and have some of them fully paid by insurance.
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A tax-advantaged account that can be used for medical and mental health fees. You and your employee can contribute to this using pre-tax money and invest the money. You can then use the money with a debit card at doctor’s offices.
Great! Now let’s put it together in examples.
Example 1: You start therapy
Your benefits:
Deductible: $1500
Co-insurance: 10%
Therapist’s status:
in-network
Session fee: $200
Insurance negotiated rate: $150
If you start seeing this therapist, you would pay $150 (the negotiated rate) for each session until you had met your deductible ($1500).
This would happen after 10 sessions ($150 * 10 = $1500).
After that, you would pay your co-insurance only, which would be $15 ($150 * 10%).
This would apply for sessions for the rest of the year.
You can see that because this therapist is in-network, you only pay the negotiated rate, not the therapist session fee.
Example 2: You start assessment
Your benefits:
Deductible: $1000
Co-insurance: 20%
Provider’s status:
in-network
Session fee: $200/hr for 10 hours
Insurance negotiated rate: average of $120/hr
If you complete an assessment with this provider, you would pay $120 for each billed hour until you’d met your deductible ($1000).
This would be after 8 hours ($1000/$120).
The remaining two hours billed would be $24 for each hour ($120 * 20%).
While the therapist bills insurance $2000 for 10 hours of services, you would be responsible for $1048.
Please note that these numbers are all for the examples only and aren’t accurate to your situation. To get your specific numbers, you’d need to look up your benefits online or over the phone. The insurance negotiated rate for services is also not public information. It is best confirmed after a claim has been processed by insurance.
Okay, so how is this different if the provider is out-of-network?
Out-of-network benefits have different (often higher) deductibles, copays, and co-insurance amounts.
Some plans have deductibles or out-of-pocket maximums that are shared between in-network and out-of-network services. Other plans have separate counters.
Providers may have you submit claims to your insurance for out-of-network processing. In this case, they offer a superbill.
A superbill is a receipt of services with the information insurance needs to process the claim.
You would pay full-fee for services upfront, then insurance would reimburse you for whatever they cover.
Providers who are out-of-network are not held to the insurance company’s negotiated rate. That means that they CAN charge you for whatever insurance does not pay.
For example, if a therapist charges $200, and insurance pays $100, you would be responsible for the remaining $100.
HANG TIGHT, this part gets confusing.
Your insurance may still only process their “Allowable rate” to count towards your deductible, copay, or co-insurance.
An “Allowable rate” is the amount that insurance has determined qualifies for coverage.
What you need to pay (called the client responsibility) is what insurance has determined according to your plan, as well as whatever is remaining between the full fee and the Allowable rate.
For example:
If an out-of-network therapist has a rate of $200, but insurance has an Allowable rate of $150,
you’d pay the $200 but insurance would only recognize the $150 as going to your deductible.
How do the examples look if it were out-of-network?
Example 1: You start therapy
Your benefits:
Out-of-network Deductible: $2000
Out-of-network Co-insurance: 30%
Therapist’s status:
out-of-network
Session fee: $200
Insurance Allowable Rate: $150
If you start seeing this therapist, you would pay $200 (the full rate) for each session until you met your deductible ($2000). Insurance would process $150 of each session as counting towards your deductible.
That means that you would meet your deductible after 13 sessions ($2000/$150 = 13.3)
After those 13 sessions, insurance would consider your client responsibility to be the co-insurance percentage of the Allowable rate (30% of $150). You would also be responsible for the difference between the Session fee and the Allowable Rate ($200-$150).
This sum would be $45 (30% of $150) and $50 ($200-$150). You would pay $95 for each session remaining.
Example 2: You start assessment
Your benefits:
Out-of-network Deductible: $2000
Out-of-network Co-insurance: 30%
Provider’s status:
out-of-network
Session fee: $200/hr for 10 hours
Insurance Allowable Rate: average of $150/hr
If you complete an assessment with this provider, you would pay $200 for each billed hour until you met your deductible ($2000).
Insurance would process $150 of each of those hours towards your deductible.
There are 10 hours billed to insurance. That would mean that the amount going towards your deductible is $150 * 10 = $1500.
In this case, the co-insurance does not apply because the deductible has not been met yet.
That’s all of it! Clear as mud, right?
Don’t worry if this doesn’t make sense. The most straightforward path is to get your insurance coverage information, and we can work together to estimate what services might cost.
Reach out using the form below and we can figure it out!