There are several key components to an insurance plan that determine when and for how much you will be reimbursed: your deductible, your coinsurance, and your allowed amount.
This information can typically be found in an explanation of benefits that was mailed to you when your plan started, or on your insurance company’s online portal. You can always find this information by calling the number listed on the back of your insurance card. Before starting care at Two Chairs, the Care Coordination team can also help find this information for you.
A deductible is the amount of money one must pay out-of-pocket before insurance benefits kick in and typically reset on a yearly basis. Deductibles vary depending on plan and insurance company. They are also often different for in-network and out-of-network services, and can range from $0 to $24,000. Any healthcare payments that you make for out-of-network services and file with your insurance company count towards your deductible.
Once your deductible has been met, the coinsurance rate will be applied to the cost of services, which reduces your total responsibility as the patient. If you have a coinsurance rate of 30%, that means that you are responsible for paying 30% of the cost of your appointment and your insurance company will reimburse you for the remaining 70%. For example, if your therapy appointment costs $100 and you have a 30% coinsurance, your insurance company should cover $70.
Seems straightforward enough, right? Not quite — there is one more piece of the reimbursement equation, and this is where things get tricky. This is the “allowed amount” also known as, “eligible expense” or “negotiated rate.”
Often the most difficult parts to understand about insurance benefits is the allowed amount. The allowed amount is a predetermined, maximum cost of different health service. This value is set by your insurance company, and often varies by zip code, service, and provider type.
For example, the same client might have a $130 allowed amount for a 45 minute therapy session in San Francisco, but a $120 allowed amount for a therapy session in Oakland — even if the cost of your appointment was $190. Unlike deductible and coinsurance, this number is neither listed nor made readily available by insurance providers, making it extremely hard to quickly understand your benefits.
The allowed amount means most insurance companies severely undervalue out-of-network health services, and clients are stuck paying the difference between the actual cost and the allowed amount for their services. We’ve seen a wide variance in allowed amounts (from $60-$300), which means actual reimbursement varies significantly from client to client.
For example, for a $190 Two Chairs appointment, if you have an allowed amount of $120 and a coinsurance rate of 30%, you are responsible for paying (30% of $120) + ($190-$120) = $106 per appointment after you’ve met your out-of-network deductible [see figure below]. While insurance companies won’t disclose our client’s allowed amounts to us, we give our clients guidance on how ask for allowed amounts from their insurance companies, so we can help get the most accurate reimbursement quote possible.
Unfortunately, reimbursement for out-of-network care is not instantaneous; clients must pay the full amount to their provider upfront, and then submit an insurance claim to get reimbursed, after the fact.
Like understanding benefits, submitting insurance claims is another challenging aspect of out-of-network care. Insurance companies have different processes, forms, and addresses, making the process hard to navigate. Especially in times of emotional and mental strain, filling out claims paperwork and ensuring that they’re sent to the right place can be frustrating at best. To submit your claim, you need a superbill which is an itemized bill of given to you by your healthcare provider.
Many out-of-network therapists will provide you with superbills for your appointments upon request, but at Two Chairs we take that service a step further. We know submitting insurance claims can be confusing, so we submit claims on your behalf to take the burden off you, so you can focus on your care.
While we aren’t contracted to work with any insurance companies, our Care Coordination team is dedicated to submitting claims quickly, post-session so clients can meet their deductibles and start being reimbursed sooner.
If you’re interested in learning more about your specific benefits or have questions about starting care at Two Chairs, you can schedule a call with us here.
We also wrote two other articles that address commonly asked questions about insurance:
If you or someone you know is seeking mental health care, you can reach out to our Care Coordination team at [email protected] or by phone at 415.202.5159.
If you or someone you know is experiencing an emergency or crisis and needs immediate help, call 911 or go to the nearest emergency room. Additional resources can be found here.