What You Need to Know About Health Insurance with a Mental Illness

Whether you are seeking long-term mental health services, or you are in a crisis and need to see a professional for a quick appointment, the cost of these services is often enough to sway people to hold off on seeking the services they need. Even with insurance coverage that will help pay for necessary mental health treatment, coming up with the co-pay or deductible can feel overwhelming.

When it comes to treating mental illness, it is important to understand that mental illness care is just as important as physical healthcare. For many years however, health insurance companies have failed to treat these illnesses as equals when it comes to treatment plans and allowances. Physical health issues seemed to get better choices for coverage than mental health issues. Thanks to the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Act, a federal law that was passed in 2008, the law now requires insurers to treat mental health, addiction treatment and behavioral health services the same as they treat physical healthcare. Do understand that while insurers must treat mental health coverage equally to physical health coverage if they offer coverage for both, there is no law that mandates they must offer mental health coverage at all.


If you need mental health services and do not have insurance coverage, you have a few options for coverage that you may not even know about. These are some choices for coverage that you may want to consider whether you are employed or unemployed.


Group Health Insurance

Many companies today offer group health insurance policies for their employees. If you don’t see a section that clearly lists mental health coverage in your policy plan book, be sure to check with the company to find out which services are covered and what your out of pocket expenses will be. If mental health coverage is not included in your group health policy, ask the company if they offer a flexible spending account (FSA) or a group health savings account (HSA) so you can have money held from your paychecks to use for services that would otherwise not be covered. According to Todd Taylor with Taylor Benefits Insurance, an HSA will benefit employees similar to a FSA, but with an HSA, the money not used at the end of the year will rollover to the next year whereas with a FSA, the money does not rollover.


Private Health Insurance Policy

You can go through the health exchange at healthcare.gov to purchase a private health insurance policy. Per the Affordable Care Act of 2014, all insurance purchased through the exchange must offer mental health coverage as well as physical health coverage. The health exchange will help you locate coverage and it bases the cost from your own income.


Veterans’ Health Insurance Coverage

Retired military members may be eligible for VA health coverage and these benefits will cover mental health and physical health issues.



For people who are ages 65 and over, Medicare offers physical and mental health coverage as well as prescription coverage.


Dual Eligible Coverage

For seniors and those who are disabled and have Medicare, the coverage requirements for co-pays may be higher than a person can afford. In situations like this, there are plans available through various insurance companies to assist those who are eligible for Medicare but also may be eligible for Medicaid. This dual eligible coverage means that those who are eligible will have little to no out of pocket expense for co-pays as well as prescription coverage.




Medicaid policies are directed by each individual state, and the coverage is available for some low-income families as well as single adults and children. In some states, all low-income adults may be covered while in other states, only single adults with children are considered eligible. You can check with your local human services agency to find out whether you are eligible for Medicaid services. When it is time to choose a therapist, you will need to determine whether they accept Medicaid or other insurance coverage by asking before you schedule an appointment.


Understanding Your Personal Information

You should know that your personal information, including notes your therapist takes during your visit is made available to your insurance provider. For this reason, many therapists will not accept insurance payments because they feel it is an invasion of privacy for their patients.


Insurers require the notes to be able to view how your treatment is going and whether you are making progress with the treatment you receive. If you are in treatment for a mental health illness now, it can be used in the future to determine your insurance rates as many providers view mental illness as a pre-existing condition and can use it to determine rates. For that reason alone, many people opt to pay cash for office visits and mental health services that offer low rates.


Insurance is a crucial instrument to ensure you can receive the necessary treatment services you need for mental illness. It is best to take time to check out several companies and options for coverage before settling with one.

Written by Jennifer Bennet

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