What You Should Know about Health Insurance and Your Counseling

Your health insurance may pay part of the costs of your treatment, but the benefits cannot be paid until your health insurance provider authorizes this (says they can be paid). The health insurance provider has been selected by your employer, not by you or your therapist. The health insurance provider sets some limits on your treatment, and you need to know what these are before you begin counseling.

Confidentiality

You should evaluate your situation carefully in regard to confidentiality. If you use your health insurance to help pay for counseling, you must allow your therapist to tell the health insurance provider about your problem (give it a psychiatric diagnosis). You must also permit your therapist to tell the health insurance provider about:

All of this information will become part of the health insurance provider's records, and it will be included in your permanent medical record at the Medical Information Bureau, a national data bank.

How Your Health Information Can Be Used

The information will be examined when you apply for life or health insurance, and it may be considered:

You will have to indicate that you were treated for a psychological condition and release this information, or you may not get the insurance, job, loan, or clearance. While this practice may change with future health care reform, it is currently the industry standard.

All insurance providers claim to keep the information they receive confidential, and there are federal laws about its release. The laws and ethics that apply to your therapist are much stricter than the rules that apply at present to health insurance providers. There have been reports in the media about many significant and damaging breaches of confidentiality by health insurance providers.

If you are concerned about who might see your records now or in the future, you should discuss this issue more fully with your therapist before you start counseling and before your therapist sends your health information to the insurance provider.

Treatment

The health insurance provider will review your information and then decide how much treatment your therapist can give you.

  1. The insurance provider can refuse to pay for any of your treatment,
  2. or for any treatment by your therapist.
  3. or it may pay only a very small part of the treatment's cost,
  4. and it can prevent your therapist from charging you directly for treatment you had agreed to.
  5. Finally, it can set limits on the kinds of treatments you can receive.

These limited treatments may not be the most appropriate for you or in your best interest. The insurance provider will approve treatment aimed at improving the specific symptoms (behaviors, feelings) that brought you into therapy, but it may not approve any further treatment.

When it does authorize your treatment, the insurance provider is likely to limit the number of times you can meet with your therapist. Your insurance policy probably has a maximum number of appointments allowed for outpatient psychotherapy (usually per year, though there may be a lifetime limit as well), but the insurance provider does not have to let you use all of those.

It may not agree to more sessions, even if your therapist believes those are needed to fully relieve your problems, or if your therapist believes that undertreating your problems may prolong your distress or lead to relapses (worsening or backsliding).

If the health insurance provider denies payment before you or your therapist are satisfied about your progress, you may also need to consider other treatment choices, and they may not be the ones you would prefer.

You can appeal the insurance provider's decisions on payment and number of sessions, but you can only do so within the provider itself. You cannot appeal to other professionals, to your employer, or through the courts. This state does not have laws regulating health insurance providers — that is, laws about the skills or qualifications of their staff members, about access to medical and psychological records by employers and others, or about the appeals process.

You should know that your therapist's contract or your employer's contract with a particular health insurance provider may prevent them from taking legal actions against the insurance provider if things go badly because of its decision. Your therapist's contract may prevent him/her from discussing with you treatment options for which the health insurance provider will not pay.

The particular health insurance provider in charge of your mental health benefits can change during the course of your treatment. If this happens, you may have to go through the whole treatment authorization process again. It is also possible that the benefits or coverage for your treatment may change during the course of your counseling, and so your part of costs for treatment may change.

Lastly, even if all the forms and information is sent to the health insurance provider on time, there may be long delays before any decisions are made. This creates stressful uncertainty and may alter your earlier assumptions about the costs and nature of your treatment.

If, after reading this and discussing it with your therapist, you are concerned with these issues, you may have the choice of paying your therapist directly and not using your health insurance. This will create no record outside of your therapist's files. This possibility depends on your therapist's contract with the health insurance provider.

What to Expect

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3101 4th Avenue
San Diego, CA 92103

Location: Corner of 4th and Redwood
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