Health Insurance: How it Works and How It'll Change

Insurance coverage is frustrating and confusing for most of us—and it has the very practical role of affecting the quality and frequency of the therapy we get. Over the next few blogs, I’ll be posting an interview with a Geoffrey Steinberg, Psy.D., about insurance as it relates to therapy, as well as answers to any questions you send us on the topic.

The past five years have been important in the world of insurance: Major national and state laws regulating insurance companies have changed. And in 2010, what’s come to be known as Obamacare—the Patient Protection and Affordable Care Act—passed, which will progressively be implemented over the next three years. For good timelines of what’s happening with the Patient Protection and Affordable Care Act, see these two links:

• http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act
• http://www.healthcare.gov/law/timeline/index.html

Below I interview Geoffrey Steinberg, Psy.D., a New York City based psychologist who founded TherapySafetyNet in 2007 as a way to deal with problems in insurance care. TherapySafetyNet is a coalition of New York-based psychologists and social workers who dedicate a part of their private practices to providing low-fee therapy to uninsured New Yorkers. Steinberg started the group because, when he was starting his own private practice in Chelsea, specializing in work with gay men, he was fielding a lot of calls from patients who lived in what he calls “benefits purgatory.” These are people—entrepreneurs, service industry professionals, artists—who make too much money to receive Medicaid, but whose employers do not provide healthcare.

This space should be a sounding board, too: if any of you post your own questions about insurance and therapy costs to Dr. Steinberg here, we’ll try to answer them over the coming weeks.

Ilana: Can you start us off by speaking in a general way about how you understand the interesting relationship between insurance and therapy? Speak a little about how one affects the other.

Geoffrey: I’ve always questioned psychotherapy’s relationship with health insurance because putting the two together results in this imperfect fit with a medical model of understanding emotional problems and how we treat them. I’ve worked with clients where it is completely justified that treatment would be paid for just the same as it would for a purely medical condition, but other cases are more about personal growth and development, and then I’ve thought, can we broaden the collective imagination here? For example, what if we operated in a system where a client could take out a student loan for psychotherapy?

But health insurance is the reality of how most therapy is funded, so we operate within the insurance framework, imperfect as it may be. It requires thinking in terms of billable hours devoted to treating a client’s psychiatric diagnosis, but I think most of us in the field recognize this is just one of multiple frames of reference to understand and organize what we’re doing. I think of my work as forming an authentic relationship with clients, and so it’s an odd twist that simultaneously I have to package this working relationship in little timed chunks organized around a billable psychiatric diagnosis. I think the challenge is to operate within this framework while recognizing its inherent limitations and the elements that have been constructed by our culture somewhat arbitrarily on the basis of tradition and pragmatism within a for-profit insurance and medical establishment.

Ilana: The Patient Protection and Affordable Care Act is gradually being put into effect. What important issues (co-pays? maximum visits allowed? pre-existing condition
laws? transparency in "customary fees," etc.) do you think need to be the important issues as new insurance policies take shape?

Geoffrey: Some of these issues have changed already due to what are called the parity laws. In 2008, congress passed the Wellstone-Domenici Mental Health Parity and Addiction Equity Act (MHPAEA), and it went into effect in 2010. This national “parity law” determined that mental health coverage had to be equal to medical coverage. In other words, your mental health coverage and your medical coverage need to comply with the same deductibles, co-payments, and maximum out-of-pocket expenses. (For some of the ideas involved, see this: http://www.apa.org/helpcenter/parity-law.aspx).

On a state level, New York passed Timothy's Law in 2006. This law, named after a 12-year-old child with depression who committed suicide, essentially rules the same thing: It requires that health plans provide equal coverage for the mental health component and the medical health component.

But recently, the Supreme Court upheld the Patient Protection and Affordable Care Act, and this is also going to affect us progressively in positive ways.

One important part of the Patient Protection and Affordable Care Act is that pre-existing conditions will no longer be grounds for denying health insurance, which is excellent news for anyone with a psychiatric diagnosis given the chronicity of some conditions.

I remember being floored some years back by the denial of coverage for a client whom I'd given the diagnosis of Dysthymic Disorder. By definition, the criteria for this disorder involves a depressed mood for a period of two years. Since the client's current coverage had begun only one year prior, the insurance company was able to claim they were not responsible for covering the client's treatment. This kind of thing should be a thing of the past thanks to the new Federal law.

Ilana: But is that true? I did just get denied coverage for a patient because of pre-existing conditions. Is this really going to change unilaterally?

Geoffrey: Beginning in 2014, as this piece of the plan is implemented, it will be illegal for insurers to deny coverage or to change the cost of the policy for people with pre-existing conditions. In the meantime, some states have adopted a Pre-Existing Condition Insurance Plan as a temporary measure to provide insurance for people who have been denied coverage because of a pre-existing condition.

Ilana: I know so many doctors and patients who throw their hands up in confusion—not just with current systems, but with the coming changes. Can you talk a bit about that?

Geoffrey: As the Patient Protection and Affordable Care Act goes into effect, we still don’t know how it will be interpreted. It’s mysteriously complex to a lot of us. In fact, I downloaded the entire bill but it’s so large it crashes my computer each time I try to search for a keyword. My understanding is that each state will have the freedom to select its own “benchmark insurance plan” by which to establish minimum coverage for the people in that state, so the interpretations will probably vary substantially from one state to the next.

Ilana: You brought up the parity laws of 2006 and 2008, which established the equal importance of mental health coverage and medical coverage. How have you seen the effects of the parity laws in your own practice?

Geoffrey: Before, there would be limits on the number of sessions if it wasn't a so-called "biologically-based" condition, and this was a terribly short list of only a dozen or so diagnoses for which a person's coverage would continue throughout the year. There were notable absences, such as Post-Traumatic Stress Disorder, for which coverage would often drop off after half a year or so, depending on the policy.

So this changed for the better, but still there are loop holes. If a person works for a small company, their employer is exempt from the parity requirement. The parity law only applies to businesses that employ more than 50 people. In other cases, a person might work for a huge company but through a bit of what seemed liked bait and switch, the insurance plan would be "self-funded" rather than funded by the employer, so there would be no parity. These loopholes made it challenging to know with a new client how much coverage they could expect to have.

Ilana: Tell me a little about the organization you founded, TherapySafetyNet, and what role the organization has in negotiating the worlds of insurance and therapy.

Geoffrey: I started TherapySafetyNet to organize a coalition of experienced therapists who dedicate a part of their private practices to working with clients who would otherwise fall through the cracks because they earn too much for Medicaid but they have no insurance.

We have about sixteen therapists in Manhattan and Brooklyn, who work with a wide range of specialties, including trauma, immigration issues, LGBT issues, and artistic issues. We match about 20 prospective clients a month with therapists. The coalition’s website can be seen here:
http://therapysafetynet.org/.

The pool of people without coverage should theoretically be smaller starting in 2014 when the Patient Protection and Affordable Care Act goes further into effect, so I expect fewer people will be eligible for TherapySafetyNet. But the change won't happen overnight. There will be a penalty for refusing to sign onto the established insurance plans, but, as I understand it, the penalty will start out very low. There are also some states that have already indicated that they don't plan on setting up the new system, at the expense of Federal funding; this is a political position they are allowed to take according to the Supreme Court's decision.

New York no doubt will be one of the states that will set up a healthcare exchange where individuals can shop for an insurance plan, but I'm sure there will be plenty of people who won't participate, so I think TherapySafetyNet will still be relevant, and we'll have to figure out what the new need is and how to reach those people who still remain uninsured even with everything that's going to be put in place.

Ilana: I need some education about the Patient Protection and Affordable Care Act to understand the future relevance of a group like TherapySafetyNet. Do we know that the government plans will offer insurance for psychotherapy? Do we know if the co-pays will be reasonable? If the new plans do not cover therapy or it the co-pays are too high, won’t low-fee psychotherapy by equally relevant?

Geoffrey: The new law includes among its list of Essential Health Benefits “mental health and substance use disorder services, including behavioral health treatment.” So a state-subsidized insurance plan like Healthy New York that currently excludes mental health care would no longer be able to do so. We also know that the Patient Protection and Affordable Care Act involves an expansion of Medicaid so that more people will be eligible, and Medicaid does provide coverage for psychotherapy.

I don't know how the usual and customary fees will be affected with the Patient Protection and Affordable Care Act. Probably the fees will be lowered by some insurance plans, as we've seen in the past, which will lead to a mass exodus of psychologists away from lower paying insurance companies, or insurance companies that make the process so grueling it's not worth the administrative time and effort to stay on the panel.

Then there's this new concept of Accountable Care Organizations which for now is specific to Medicare, but I wonder how it might impact costs for private practitioners down the road. The idea is to get away from the fee for service model and instead allocate payments to groups of doctors on the basis of the health outcomes of large groups of their patients. This kind of thing makes me nervous, in the sense that whether we're talking about medical or mental health care, it seems to take control away from the doctor. I wouldn't want my payments determined by the quality of other providers' work, nor would I want it tied to the outcomes not only of my clients but other provider's clients. It's just problematic in so many ways. There are always going to be people with chronic conditions, people who are resistant to cooperating with treatment, and the outcome measures are just too crude to capture those realities. I've seen some pre-cursors to this working in the past in Medicaid- and Medicare-funded clinics, and what was being developed as so-called "Evidence-Based Practices" by which those large group level payments would probably be determined were cherry-picked practices not based in any sound form of scientific evidence and in many cases not even related to what psychologists actually do, but were practices that could be implemented by para-professionals. And it always seems even after a century of accumulated evidence for the value of psychoanalysis and psychoanalytically-informed psychotherapy, and even more recent empirical studies demonstrating its effectiveness, this evidence is always marginalized in favor of shorter-term treatments. Highly frustrating.

Ilana: Do you have any “stand-out” personal stories where insurance companies interfered with your treatment of a patient?

Geoffrey: Well this actually relates to the way in which states will be setting up different systems according to the provisions of the Patient Protection and Affordable Care Act.

Some of the greatest difficulties I've encountered with insurance companies were situations where a client's employer was in a different state than where they were living. Blue Cross/Blue Shield in particular seems to be the worst culprit, in my opinion, in that they have a separate organization in each state where they operate, and they want claims submitted to the state where the work is being done, but that claim then has to be processed by the BC/BS organization in the client's home state, and it seems inevitably this creates some kind of bureaucratic infinite loop in which nothing gets done.

So my practice is in New York, and a client was stationed in New York by his California employer, and the claims kept getting denied. So I got on the phone with the company in California, and the representative said, "We'd really prefer if this patient saw a psychologist in California." And I said, "Would you like to pay his airfare to go back to California every week for psychotherapy?"

Eventually I've learned not to fight these kinds of things, it's just a waste of time. I can't imagine how it will play out once each state is interpreting the Patient Protection and Affordable Care Act in its own idiosyncratic, politically-driven manner, and what might that mean with respect to the highly mobile way that people live and work today?

Please do ask us any questions about insurance in the coming weeks.