Mental Health
What Are Out Of Network Benefits And How Can They Help You Save Money?

What Are Out Of Network Benefits And How Can They Help You Save Money?

10 min read


Alyssa Petersel

We All Want A Therapist We Can Afford

Of course, when we are looking for a therapist, we want to work with someone we can afford. Many of us assume we want to work with someone who is in-network with our insurance (more on exactly what this means below).

I'd like to share a few secrets with you. But first, a request: Please read this post in its entirety before X-ing out of this screen and assuming therapy is outside of your price range. That may not be the case.

Secret #1: As frustrating at it may be, you will likely have more options for therapy if you go outside of insurance, or use something called Out-of-Network benefits (more below). I will share with you why.

Before I dig into your options outside of insurance, let's first understand our options within insurance.

What Does "In-Network" Mean?

Generally, if a therapist is in-network:

  • The therapist is in your insurance company's database, or they have applied and been "approved" by your insurance company.
  • You will owe a "co-pay" at the time of your session. This can range between $15-85 (sometimes even more or even less). Your insurance company will pay your therapist the rest of what the insurance company deems a reasonable rate for the service provided.

    Example: If a session is worth $75 according to the insurance company and your hypothetical co-pay is $35, you pay your therapist $35 at the time of each session. The insurance company would pay $40 to the therapist after the therapist submits paperwork.

The general benefit of this system is: If a therapist is in-network, you only owe a co-pay at the time of your session.

Why Doesn't My Therapist Accept Insurance?

Secret #2: A number of flaws exist with the insurance system the way it currently works, which cause the vast majority of therapists (especially in NYC) to not accept insurance in-network.

Here are just a few:

  1. Insurance companies do not always accept applications, and this does not mean the therapist is not qualified or a good therapist.

    Sometimes, a certain zip code is "over saturated," so the therapist cannot apply to accept that insurance in-network even if they are the best therapist in that zip code, or in the city.
  2. Insurance companies do not always reimburse on time, or at all, depending on whether they deem the paperwork appropriately completed.

  3. Insurance companies do not reimburse a reasonable or livable wage. For example, if a therapist in New York City is on every insurance panel and works only with clients who are paying through insurance, they will struggle to pay their business expenses, let alone their personal expenses.

  4. The rates that therapists are reimbursed from insurance have generally not changed in decades.

    Therapists who have worked "in-network" with insurance companies for over 20 years request an increase in their reimbursement every year and are consistently denied. The price of rent goes up, the price of coffee goes up, the price of just about everything in NYC goes up year-by-year -- but the reimbursement for a session of therapy stays the same.

  5. Insurance companies can limit the amount of sessions you are allowed, so the therapist can only receive payment from the insurance company if you are "in crisis," or only for your first few sessions.

    This puts both you and your therapist at risk of cutting your work short, rushing your work together, or not reaching your fullest potential. Often, healing can be unpredictable. Some people overcome an obstacle in 5 sessions, others need 25, others need 365.

    Secret #3: An example. I have been working with my current therapist for over a year. I am not working through a specific issue, but rather, the general ins-and-outs of a high-pressure personal and professional life in NYC. I do not intend to end our work together any time soon, and I would feel uncomfortable if an external third party held the reins on that.

  6. To receive payment from insurance companies, therapists need to assign you a "diagnosis."

    This diagnosis can be carried with you in certain circumstances. For example, if a court for any reason orders to see your treatment history, the insurance company will be required to share that information.

    Like me, many of you may be receiving (or seeking) therapy for general life stress or circumstances that do not otherwise fall under a formal "mental illness" or "diagnosis."

    You may also respect the general notion of privacy. You may not want this diagnosis on your record.

  7. Having a diagnosis (for example, depression) on your record may prevent you from receiving other types of desired insurance, like life insurance, despite your being deserving of equal access.

  8. Sometimes, your co-pay is still quite high. Based on the information below, your Out of Network benefits may actually make seeing a therapist who is not in-network with your insurance company just as affordable, or even more affordable, than going in-network.

  9. Using health insurance makes it much harder to choose your own therapist, and causes you to be limited by who accepts your insurance in-network and who has availability in their practice. You may find you call 10-20 in-network therapists named in your insurance list before receiving a call back, only to learn the person who is calling you back does not have availability for another few weeks.

  10. Your plan may have a high deductible (more on what this means below), meaning you would be paying fully out of pocket for months before your insurance benefits kick in anyway.

  11. If you switch jobs, or your job switches insurance providers, you may be vulnerable to needing to switch your therapist, after gaining trust, building a relationship, and reaching new levels of strength and security and not wanting to start over with someone new.

This list is not exhaustive, but provides a glimpse into the ways that working with a therapist outside of insurance may actually empower you to feel more independent and more in control of your own work and progress, without being at the mercy of an external third party.

What does "Out of Network" Mean?

During your search for a therapist, you may come across something like this on your therapist's website, or the website of the group practice they work at:

"We work with clients insured by many insurance companies on an out-of-network basis. Our licenses, training, and education qualify for out-of-network reimbursement. This means that most insurance plans allowing members to go out-of-network for mental health will reimburse you for our work, according to the payments they allow. Check the nature of your insurance and what it will reimburse you."

You may be thinking, "Cool, what does all that mean?"

Secret #4: These things called "Out-of-Network Benefits" can be a tremendous cost-saver if you have them. Through Out-of-Network benefits, you may be able to receive money back from your insurance company even if you are seeing a therapist who is not "In-Network."

Let me explain. And note: Should any of this add to the confusion rather than relieve it, please do not hesitate to email me at [email protected] to break it down even further.

Out of Network implies that the therapist is not "in-network" with your insurance company. Building off the above, this means the therapist is not in your insurance company's directory, or "yellow pages."

However, insurance companies recognize that they do not work with every single therapist. They also recognize their in-network database cannot accommodate the demand for therapy, and they likely do not work with enough therapists who have open availability.

Based on your specific plan, or how much you have spent on healthcare expenses otherwise, the insurance company will pay you money back after your sessions to help your work with your therapist become more affordable for you.

Some more terms to talk through:

  • Deductible

    Your deductible is how much money you have to spend before the benefits of your specific insurance plan kick in.

    After you "reach" or "meet" your deductible, or spend the amount equal to your deductible, you will be "eligible" for your benefits.

    For example: If your deductible is $1000, you need to spend $1000 out-of-pocket before your out of network benefits kick in. If you are paying your therapist $100 per session, you will pay for 10 sessions out of pocket, and then your out of network benefits will kick in.

  • Percentage reimbursement

    Often, insurance companies will cover a percentage of your out of network spending, after you meet your deductible (see above).

    Building on the same example, say your out of network benefits outline that you receive 50% of your session fee after you "meet your deductible.”

    If your deductible is $1000, and you are paying your therapist $100 per session, after paying $1000 out of pocket (10 sessions), you will receive $50 back from your insurance company per session (50%), dropping your out-of-pocket spending to $50 per session ($100 - $50 = $50).

  • Allowable amount

    Sometimes, insurance companies (or your particular plan) will have an “allowable amount” for a session. This means that if your therapist’s sessions fee is $150/session but the insurance company has an “allowable amount” of $100/session, the insurance company will be processing reimbursements with $100/session in mind and you may be responsible for the difference.

The specific deductible, percentage reimbursement, and allowable amount varies widely by person and by plan. Your out of pocket spending does not need to be on therapy -- it is possible you have already "met your deductible" through other healthcare spending.

How Do I Learn What My Benefits Are?

Now we're talking. Though talking with insurance providers (or, let's be honest, making an IRL phone call) can be intimidating, I urge you to take a few minutes to make the call. The call likely won't take more than 10 minutes and you'll be so relieved to know this information. It may mean a lot of savings for you.

Call the number on your insurance card and ask:

  • "What percentage am I reimbursed for routine behavioral health care out-of-network?"

    (Jargon note: "routine behavioral health care" means that you are not seeing a physician or doctor and you are not necessarily in crisis.)

  • "What is my deductible?"

  • "How much of my deductible have I already met?"

  • “Is there an “allowable amount” for behavioral healthcare?

With the above information, you will learn what amount you have to spend for your benefits to kick in (your deductible), and you will learn how close you are to that. You will also learn what percentage insurance will pay you back once you reach that point.

How Do I Receive My Benefits?

Each month, your therapist will provide you an invoice or receipt for your session fees. If your therapist does not do this, ask them to. They will understand. You submit this invoice to your insurance company to receive your reimbursement.

If this all sounds like a head ache, you're in luck. Secret #5: A sister organization, Reimbursify, can help.

Through Reimbursify, you can quickly and easily register, find your provider, file your claim, and get reimbursed.

If you prefer to not use an app, I recommend discussing with your therapist how to "file your claim" to receive your reimbursement. Once you do this a few times, you will get the hang of it, and it will feel like clockwork. The first step is often the hardest and most overwhelming but it does get easier.

Why Should I Bother?

If you have ever searched for a therapist, particularly here in NYC, you know how difficult it is to find a therapist who accepts your insurance in-network. Some of the reasons for this are mentioned up top. The most pressing? Insurance companies do not reimburse a living wage and therapists want to prioritize the privacy and trust between you and your therapist to do the best work possible for you.

Running with the same example as above: If your co-pay is $55 but you have to see an in-network therapist, who can be extremely difficult to find, or your out of pocket expense becomes $85 to see any therapist who has a license, you significantly broaden your options. The average rate for therapy in NYC is $250/session; however, you can let your therapist know you have financial concerns, and they will likely be open to negotiating a fee with you that fees fair and appropriate for both of you.

You can finally connect with a therapist who is uniquely fit to help you and your particular needs, rather than searching merely based on whether the therapist is in-network with your insurance provider.

What If I Don't Have Out of Network Benefits?

Most therapists, particularly here in NYC, offer something called a "sliding scale" to clients who express financial need. This means they are willing to negotiate their fee with you to help your work together become more accessible for you.

For example, if a therapist's full fee is $200, they may be able to accommodate fees much lower, perhaps as low as $80 per session, depending on your needs. Most therapists prefer to have this conversation with you to determine together what is reasonable and fair for both of you.

As intimidating as it may feel, I encourage you to reach out to a therapist who you believe may be a strong fit for you to inquire about their sliding scale. The worst thing that happens is the therapist says they are not offering a sliding scale at this time. Better to know in the beginning!

A note worth mentioning: Please honor the therapist's experience and time. Many of you may really need a sliding scale. That is absolutely okay and you deserve therapy. That is what sliding scales are for.

If you believe you can invest in therapy, I urge you to do so. The more you value your time and the more you value the time and experience of your therapist (to the best of your ability and budget), the more you will get out of the work. More on evaluating your budget below.

Okay, I'm Sold. What Now?

Once you know your benefits, I recommend reviewing your budget, and being honest with yourself about what you are able to invest in yourself and your therapy.

Food for thought: Eating out, say, 3 times per week, costs on average $7,575 in New York City per year. Paying $100 for therapy, going once per week, and taking 4 weeks off (people get sick and go on vacation sometimes) will cost you $4,800 per year. You are buying a weekly reserved time with a live person who has training and experience to uniquely help you become the best version of yourself. I personally believe that is worth cooking groceries more often.

Sometimes, you really cannot afford more than a co-pay. We have all been there. You still deserve therapy and you still have options. In this case, going through the search for an in-network therapist, or visiting an agency or institute may be the best route (please don't hesitate to reach out if you need an agency or institute recommendation in NYC).

If you really can afford to invest in your healing, but you aren't yet sold about whether therapy is worth the money, I urge you to give it a chance. Set a time period -- say, 6 months, or one year -- to experiment. If you do not notice changes in your thoughts or behaviors, learn more about yourself or your intricacies, or feel marginally lighter after each session, you can at minimum say you've really tried.

I hope this rundown of insurance and your payment options has been helpful for you. As always, please do not hesitate to reach out ([email protected]) with any more specific thoughts or questions.

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About the author

Alyssa Petersel, Co-Founder and CEO of My Wellbeing and author of Somehow I Am Different, graduated from Northwestern University in 2013 with dual BA degrees in psychology and international studies, graduated summa cum laude from New York University in May 2017 with her Master's in Social Work, and graduated from The Writer's Institute non-fiction program at CUNY Graduate Center in May 2017. A native New Yorker, Alyssa now lives in Brooklyn and enjoys running, coffee, community, and social justice.

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