Health Insurance

Medically reviewed by Dr. Andrea Cziffer Paul, MD, Julie Dodson, MA, and Laura Angers Maddox, NCC, LPC

Overview

Health insurance is the coverage that helps individuals pay for both routine and unexpected medical costs. Depending on the insurance policy an individual has, the insurance company may agree to pay all or part of their medical costs when they require routine care, get sick, or are injured. Health insurance allows people to obtain healthcare services at a more affordable rate or for free.

Health insurance deductibles are the out-of-pocket amount an individual must pay for healthcare services before an insurance plan begins to cover costs. It can be helpful to consider one’s deductible amount when choosing a plan, as it can significantly impact the out-of-pocket amount you’re required to pay before insurance coverage applies.

Health insurance plans can be broadly categorized into four types:

Health maintenance organizations (HMOs)
Preferred provider organizations (PPOs)
Point of service (POS) plans
High-deductible health plans (HDHPs)

HMOs are often affordable but can limit clients to a specific network of doctors and may require a referral to see a specialist. PPOs, while pricier, offer more flexibility in choosing healthcare providers and don't require referrals.

POS plans balance HMOs and PPOs, offering some flexibility but requiring referrals as HMOs do. Lastly, HDHPs come with high deductibles but lower premiums, making them a more affordable care option for those who may not require frequent medical attention. Some individuals may also be eligible for certain discounted health insurance plans under the Affordable Care Act. Understanding these options can be valuable when deciding on healthcare coverage.

Some individuals may be able to use government health plans, like Medicaid and Medicare. These plans may offer full or partial coverage, but provider options may be more limited and require longer waitlists. Individuals can talk to their local Health and Human Services department to learn more about eligibility.

How to get started

To start seeking health insurance, consider your own or your family’s health needs and financial situation. Understanding your budget and the scope of coverage you need may streamline the process and help you sift through potential matches.

You may then explore the different types of health insurance plans available, such as employer-sponsored health insurance, government programs like Medicaid and Medicare, and individual market health insurance. Comparing plans based on coverage, cost, out-of-pocket expenses, network of healthcare providers, and any discounts available under the Affordable Care Act may help you choose a plan that best suits your needs. When you find a potential plan, read the policy thoroughly before deciding to ensure you understand what is expected of you and how much your plan will cover.

Before you decide, you might also contact the company you are considering to get an idea of what it may be like to interact and work with them. This step may offer a chance to get your lingering questions answered and determine if a specific company or policy best meets your needs.

Choosing health insurance

The Healthcare.gov Health Plan Insurance Finder may be helpful when seeking a suitable match for health coverage. This platform offers comprehensive information on various insurance plans, allowing individuals to compare and contrast their options based on preferences and budget.

By taking into account factors like location, income, and family size, the tool provides a tailored list of potential plans that could fit you. This process may not only be about finding coverage but about finding the proper coverage for you. This resource may take some stress out of navigating the complexity of health insurance.

Some insurance companies may also offer guidance on choosing a plan that is right for each customer’s unique situation. After gathering a list of your top choices, it may be helpful to consider reaching out to a customer service specialist at each company to get information on what plans they offer and how much they are willing to work with you individually. Making an informed choice can be crucial, since annual open enrollment periods can mean that you may not be able to change your plan until the following year.

Therapy and insurance

Health insurance may be beneficial when managing the costs of various healthcare services, including mental health therapy. Depending on the specifics of one’s policy, health insurance may cover both in-person and online sessions. The extent of coverage may vary significantly based on an individual’s specific plan and the therapist's network status. A person can directly contact their insurance provider and/or prospective therapist to clarify these details.

Therapy costs may vary depending on the type of therapy sought, and some modalities might not be covered by insurance. For example, alternative therapeutic modalities like art therapy, music therapy, animal-assisted therapy, or energy work therapy may not be covered because they may involve unique tools, session times, or expertise. Insurance companies often require therapists to bill a specific code for the time of the session and the type of session offered. If a code is unavailable for the particular modality, the client might be required to pay out of pocket. However, some therapists offer a sliding-scale system, which could allow clients with a lower income to pay a lower session rate.

More traditional forms of therapy, such as cognitive behavioral therapy (CBT),¹ may be more affordable or more frequently covered by insurance. CBT is often a popular option, as it is evidence-based and cited as the “gold standard” of psychotherapy by several studies for treating a variety of mental health conditions.² However, each person is different, and what works for one may not be effective for another. It may be helpful for prospective therapy clients to look through the database of therapists listed under their insurance plan’s network of covered providers, if applicable, to see which therapeutic modalities and specialties are commonly covered.

Associated terms

Updated on June 27, 2024.

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The information on this page is not intended to be a substitution for diagnosis, treatment, or informed professional advice. You should not take any action or avoid taking any action without consulting with a qualified mental health professional. For more information, please read our terms of use.