How to pay less for therapy
Every single day, I speak with people who would love to go to therapy but worry about how they’ll pay for it.
45% of Americans avoid seeking mental health treatment because of the cost, and most therapists in San Francisco don’t accept insurance.
Do you want great therapy but don’t want to sacrifice an arm and a leg for it? Are you overwhelmed by insurance lingo and unsure of which benefits to choose? Try out these three simple strategies to pay less for mental health care:
- Insurance reimbursement
- Start an HSA/FSA
- Use Kip!
Insurance Reimbursement
Check your plan. PPO insurance often covers a portion of out-of-network providers, and so do some other plans.
How much can you save? Anywhere from 30% to 100% of your session may be reimbursed in full. It depends on your plan and the deductible.
How do you get the money? Look up your plan details (specifically under the out-of-network Mental Health Outpatient Services). If you don’t have out-of-network benefits, consider switching to a plan that does during the Open Enrollment period.
To illustrate this process, see my Aetna insurance plan (from Gusto’s new health benefits service), below. In my non-network provider column, I can see that Aetna will pay 50% coinsurance for mental health visits. Great!
Now, I need to check if I have a deductible. If I do, that 50% coinsurance only kicks in once I’ve met my out-of-network deductible.
Not bad — my out-of-network deductible is only $1,000. This means that once I spend $1,000 on therapy (or any out-of-network cost), Aetna will start reimbursing my care at the 50% coinsurance rate. If I started seeing a Kip therapist for $165 per session, I’d be responsible for paying the first ~6 sessions on my own. After that, my sessions would cost me the total session fee minus whatever Aetna reimburses me.
There is one more step required to figure out exactly how much my insurance company with reimburse me after I reach my deductible. And, unfortunately, it’s not as simple as “I get a 50% reimbursement if I have a 50% coinsurance rate.” (Rule of thumb: If an insurance company can make it more complicated, it will.)
With a 50% coinsurance benefit, your insurance will reimburse 50% of what they estimate your therapy session *should* cost (based on variables such as your location).
There are two ways you can find out your reimbursement rate:
1) Contact your insurance company and ask them to do an “eligibility check.”
2) Go to a therapy session with your chosen provider and then file a claim with your insurance.
Both methods work, but the second method is more straightforward and you’ll spend far less time on the phone with your insurance company.
*Be advised: Insurance companies often make it difficult to file claims. Some require you to send forms via snail mail; the “nicer” companies let you fax forms or file the claims online. Others will reject your claim a few times before approving it. It can be a pain, but your wallet is worth it. I use a service called Better that files my claims and gets my money back for me.
Start a Health Savings Account (HSA)/Flexible Spending Account (FSA)
HSAs and FSAs are no brainers when you are giving yourself the gift of therapy. These are tax-advantaged savings accounts allow you to use pre-tax money toward your therapy sessions. This way, you get the full value of your dollar (no taxes) and you reduce your income (lower taxes overall). You can pay for Kip therapy with these HSA/FSA funds.
How much can you save? You save whatever you would have lost in taxes on the amount you spend, so 10–40%, depending on your tax bracket. Assume your tax bracket is 25%, you make $40 per hour, and you pay $165 for each Kip therapy session. With an HSA/FSA, you would save $41 per session that normally would have gone to Uncle Sam as taxes on your income.
You can use pre-tax HSA/FSA funds on many health care costs in addition to therapy, such as: contact lenses or glasses, copays, dental care, and any out-of-network health expenses that count toward your deductible. With a letter from your doctor, you can even use HSA/FSA funds for over-the-counter medicines for acne treatment, allergies, and cold medicine. If you take anything away from this article, I hope it’s that you can get FREE money for therapy by opening up an HSA or FSA account.
About HSAs:
Pros: You can put more money into an HSA since the individual limit is $3,400 per year (as of 2017), and these funds rollover to the next year if you don’t use them all. You can also change how much you contribute to the account at any point during the year.
Cons: HSAs have more eligibility restrictions. You must be enrolled in a high deductible health plan, cannot be claimed as someone’s dependent, and cannot be enrolled in Medicare.
About FSAs:
Pros: You can put up to $2,600K (individual limit) into an FSA per year and the money is taken out of your paycheck in portions throughout the year. You decide how much to put into your FSA during open enrollment, but that full amount gets taken out pro-rata throughout the year.
Cons: Calculate wisely! Only $500 of your unused FSA funds roll over to the following year, so you lose any leftover money that you don’t use within the year. You can use this guide from NerdWallet to help you decide whether to start an FSA or not.
To set up an HSA or FSA, contact your HR department. Most companies will offer HSAs and FSAs as a regular benefit to their employees. Learn more with these guides:
Flexible Spending Account (FSA): What it is & How it Works
Health Savings Account (HSA): What it is & How it Works
Use Kip!
Therapy is a long-term investment that brings you returns for the rest of your life. When you invest in therapy, you build skills to strengthen relationships, solve problems, achieve personal goals, and manage your mental and emotional wellbeing forever.
This is especially true with Kip — you can trust our vetted providers who are selected for their skills, empathy, and use of evidence-based, science-backed therapies.
The process is simple and effective — book your therapy sessions with our app, share information with your therapist, and track your progress for more productive sessions (and, therefore, less time and money wasted!).
You are worth it. Learn more at hellokip.com.
