Published on November 14, 2024 by Zencare Team and contributed to by Natalie Asalgado, LCSW.
As a mental health professional, educating your clients on how deductibles impact therapy costs can empower them to make informed financial and health decisions. Here’s a practical guide to help you explain what “hitting a deductible” means and how clients can take advantage of this milestone to optimize their therapy sessions and expenses as the year closes.
Explain the Basics of a Health Insurance Deductible
What is a Deductible?
Begin by defining a deductible as the amount clients must pay out-of-pocket for medical services, including therapy, before insurance starts covering a larger portion. Clarify that once clients meet this annual amount, they’ll transition from paying the full cost of therapy to paying only a fraction, often called “coinsurance.”
Example:
- If a client’s deductible is $1,500, they’ll pay for all therapy costs up to that amount. After meeting the deductible, their insurance typically covers a percentage of each session, reducing the cost substantially. For example, if therapy costs $150 per session and the coinsurance rate is 20%, they’ll pay just $30 per session after hitting the deductible.
Key Points:
- Differentiate between in-network and out-of-network deductibles, as many clients are unaware these can be separate. Let them know which one applies based on your billing status.
Highlight the Benefits of Increased Therapy Frequency After Meeting the Deductible
Encourage clients to schedule more frequent sessions toward the end of the year once they’ve hit their deductible. Let them know that maximizing insurance coverage during this time can make therapy more affordable and help them deepen their work with you.
Talking Points:
- “Now that you’ve met your deductible, your therapy costs will be lower per session.”
- “This is a great time to increase our session frequency if you’d like to focus more on specific goals or challenges.”
- “Let’s check in on your coinsurance rate to see what each session will cost moving forward.”
Actionable Tips:
- Offer to help clients understand their coinsurance obligations or suggest they contact their insurance provider for details.
- If possible, create a short “year-end therapy plan” with clients who wish to make the most of their deductible benefits.
Help Clients Understand Different Plan Types and How They Affect Deductibles
Not all clients are familiar with their plan’s deductible structure. Explaining the distinctions between high-deductible and low-deductible plans can help them make better decisions during open enrollment or adjust their expectations for out-of-pocket costs.
Explanation for Clients:
- High Deductible Plans (HDHPs): These plans have lower monthly premiums but higher upfront costs, making therapy sessions more expensive until the deductible is met. Clients who don’t attend therapy regularly might find HDHPs more manageable but could pay more out-of-pocket for each session.
- Low Deductible Plans: These plans have higher monthly premiums, but deductibles are met sooner, leading to quicker insurance coverage. Clients who attend therapy regularly may benefit financially from low-deductible plans.
Example Conversation Starters:
- “If therapy is an essential part of your self-care, a low deductible plan might make more financial sense.”
- “For clients who only need occasional sessions, a high deductible plan may work, as you’ll pay less monthly but more upfront.”
Discuss Out-of-Pocket Maximums and Other Costs
Beyond deductibles, other costs may still apply. Explaining coinsurance, copays, and out-of-pocket maximums can help clients understand their full financial picture.
Key Points to Share:
- Coinsurance: The percentage they’ll pay after meeting their deductible.
- Out-of-Pocket Maximum: Once reached, insurance covers 100% of therapy costs, helping clients save further.
- Non-Covered Services: Explain that certain services, like missed sessions or administrative fees, may not be covered by insurance even if the deductible is met.
Example:
- “Once you hit your out-of-pocket maximum, therapy sessions for the rest of the year could be fully covered by insurance.”
Help Clients Strategize for Future Therapy Costs
Encourage clients to use this information for planning their therapy expenses next year. By understanding how deductibles and plan types affect therapy costs, clients can make better choices during open enrollment or plan their finances effectively.
Practical Planning Tips:
- Track Therapy Expenses: Recommend that clients use their insurance app or online dashboard to monitor deductible progress. Tracking expenses throughout the year helps them see when they are close to hitting their deductible, making it easier to plan when to increase session frequency and maximize insurance coverage.
- Set Financial Goals Using HSAs or FSAs:
- Flexible Spending Account (FSA): For clients who don’t have access to a Health Savings Account (HSA), suggest setting aside funds in an FSA if their employer offers it. FSAs allow clients to contribute pre-tax dollars to cover eligible medical expenses, including therapy sessions. These funds are generally “use it or lose it” by the end of the year, so it’s helpful to calculate projected therapy costs at the start of the year to determine how much to set aside.
- Health Savings Account (HSA): For clients with a High Deductible Health Plan (HDHP), an HSA offers a similar benefit to the FSA, allowing pre-tax contributions to cover out-of-pocket medical costs. Unlike FSAs, HSA funds roll over each year, which may be beneficial for clients planning on longer-term therapy.
- Discuss Open Enrollment: During open enrollment, consider offering clients a review of their current health plan’s benefits and how their therapy needs align with available options. Help clients understand key considerations like deductible amounts, out-of-network coverage, and access to FSA or HSA options.
Example Conversations:
- “If you expect to continue therapy regularly, contributing to an FSA could help you save on out-of-pocket costs by using pre-tax dollars.”
- “For clients with HDHPs, setting aside funds in an HSA offers both immediate savings and rollover benefits for next year.”
Ensuring Clients Get the Most from Their Therapy Investment
Helping clients understand the impact of hitting their deductible on therapy costs is an empowering step in making mental health care more accessible and affordable. By proactively educating clients on how deductibles, coinsurance, and plan types affect their out-of-pocket costs, you equip them with the knowledge to make the most of their insurance benefits.
As a mental health professional, guiding clients through practical financial planning tips—such as using insurance tracking tools, setting aside funds in HSAs or FSAs, and evaluating health plan options during open enrollment—can demystify what can be a confusing and often overwhelming aspect of their healthcare. Encouraging clients to track their progress toward meeting their deductible, understand the implications of different plan types, and maximize their benefits in the last months of the year helps them plan for both immediate savings and long-term affordability.
For many clients, these insights can make therapy more sustainable over time, giving them the flexibility to increase session frequency, explore additional areas of therapeutic work, or simply manage their healthcare expenses with less stress. Remember that for clients with questions or uncertainties, you can direct them to resources such as their insurance provider’s customer service or app, tools like Reimbursify, and any relevant guidance your office may provide.
Ultimately, taking the time to educate clients on how their deductible works and the ways they can plan around it can strengthen your therapeutic relationship by showing them you’re invested in their overall well-being, both mental and financial. This proactive approach reinforces therapy as an accessible, sustainable component of their healthcare, enabling them to prioritize mental health with confidence and clarity.
Explore a resource developed with Natalie Asalgado, LCSW and our partner, Owl Practice below.
