3 Ways Insurance Companies Make it Harder to Get Therapy

Dr. Ashley Castro, Founding Executive Director
August 7, 2022

All roads lead to insurance companies.

At least that’s how it feels whenever we talk about what’s wrong with the mental health system. Inevitably, the conversation makes its way to the only entity in mental healthcare that is flourishing: private health insurance companies. 

These companies are raking in billions in profits while therapists and patients face a scarcity of resources on the ground. It's not fair.

As mental health advocates, we can begin to shift the balance toward equity. But we must first understand the problem we want to fix. The insurance system can be as hard to understand for therapists and advocates as it is for help-seekers.

Here are three ways that insurance companies are making it harder for help-seekers to access mental healthcare, and some signs of progress toward change.

1) By not complying with the law 

In 2008, Congress passed the Mental Health Parity and Addiction Equity Act (MHPAEA), which requires that private health insurance companies cover behavioral health services as well as physical health services. 

Importantly, the Federal Parity Law does not require that private insurance companies cover behavioral health services. However, for the insurance companies that do cover such services, they cannot 1) require higher out-of-pocket costs (e.g., co-pays), 2) put higher limits on the number of visits, or 3) use more restrictive utilization criteria compared to physical health care. 

Unfortunately, insurance companies have been noncompliant with the MHPAEA. Almost 15 years after the law was passed, a report from federal agencies revealed numerous deficiencies in parity across insurance plans, such as limited coverage of services for autism spectrum disorder (e.g., ABA), substance use disorders (e.g., medication-assisted treatment), and eating disorders (e.g., nutritional counseling). 

The report includes a recommendation that Congress amend current laws to allow the government to impose monetary penalties on insurance companies for not complying with the MHPAEA. Efforts to address parity violations are gaining momentum in Congress.

2) By maintaining inaccurate lists of in-network providers

A common piece of advice given to people starting their therapy search is to look on their insurance company’s website. The expectation is that, once there, a help-seeker will find an accurate list of all providers who accept their insurance. 

But many help-seekers find something far less useful.

A “ghost network” is an insurance company’s list of “in-network” providers that aren’t actually available to provide services to their members for a number of reasons. For example, help-seekers may find that some listed providers are retired, no longer accepting insurance, or dead

Ghost networks appear to be especially prevalent for mental health providers. It’s unclear whether these ghost networks are intentional or the result of negligence, but they nonetheless represent a very real barrier to mental healthcare.

One study found that about 53% of help-seekers encounter inaccuracies in directory listings for mental health providers. The same study shows that these inaccuracies are linked to a greater likelihood of using an out-of-network provider, surprise bills, and filing more complaints with their insurance company.

As reported in this Washington Post article, growing attention to the issue of ghost networks is resulting in lawsuits filed against insurance companies. Well-maintained and verified directories like ours are another solution to the problem.  

3) By not being transparent about therapy reimbursement rates

In my last Progress Note, I mentioned that therapists receive offensively low reimbursement rates for their services. Regardless of what a therapist charges per hour, if their patient is paying for services through insurance, the therapist gets paid an amount determined and set by the insurance company. 

What is that amount? It’s hard to say.

Reimbursement rates for therapy services are unique to each provider and are determined by a number of factors including credentials, location, and specialty. Therapists won’t know how much an insurance company will pay them for services until they’re part of the network. Many therapists avoid the uncertainty altogether by refusing to accept insurance. 

It’s a similar story for patients trying to get reimbursed for out-of-network care. A patient who seeks therapy from an out-of-network provider is able to submit a “superbill” to their insurance company for reimbursement of some of the payment. However, the process for doing this and the amount that will be reimbursed can be difficult to determine

Greater transparency about insurance reimbursement rates would help both therapists and patients negotiate for more affordable mental health services. The nonprofit FAIR Health is increasing transparency in this area by providing consumers with estimated costs of services based on data extracted from billions of insurance claims.

We're giving power back to help-seekers

At Therapy4thePeople, we're well aware that having private insurance does not guarantee access to mental health services. That's why we're building resources for people who struggle financially, regardless of insurance status.

We also know that information is power.

When help-seekers have accurate and easily accessible information about mental health services, they're empowered to make the best decisions for their care.

Each listing in our directory of affordable mental health services has the information help-seekers need to know if the service fits their budget and needs. And our blog posts educate help-seekers on how to navigate our complicated mental health system.

Thank you for supporting us in this work.