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Celeste Sloman for Money

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For five years, Christine Byrd figured her teenage daughter was going through a phase when she became withdrawn from friends and family and brushed off meals at home. It was only when Pepper Snider turned 17 that she was diagnosed with anorexia, triggering five years of intensive treatment, including thrice-weekly therapy, residential care, and hospital stays. The total of $55,000 she spent out of pocket has left Byrd, 56 and widowed, with no retirement savings and five-figure credit card debt that she’s slowly paying off. “It was a long journey,” says Byrd of her now-28-year-old daughter’s recovery. “But it was worth it to see her get back on track.”
Every year, nearly one in five American adults experiences anxiety, depression, or another mental, emotional, or behavioral disorder. Others struggle with substance abuse. For many, the problem can be a manageable condition, a backdrop to a job and family time. For a smaller group, a mental illness can have a profound effect on day-to-day life, making it hard to stay in school or go to work. But no matter where someone falls on that spectrum, a mental-health challenge can strike deeply at a family’s financial well-being.
Treating a condition like depression or anxiety can prove costly in a myriad of ways. Almost half of psychiatrists don’t take private insurance, raising the odds that you’ll have to go out of network for care and shoulder higher out-of-pocket expenses as a result. Prescription-drug bills can be an ongoing drag on your budget. Insurance claims seem to be denied at higher rates than those for medical care are.
Overall, patients bear 16% of the total costs of mental-health treatments, according to the Agency for Healthcare Research and Quality, the highest portion of any common illness studied, including high blood pressure and diabetes. “This is an area where people have been bankrupted,” says Colleen L. Barry, professor at the Johns Hopkins Bloomberg School of Public Health. “The expenses associated with treatment can be very high, even catastrophic.”
It wasn’t supposed to be this way. Eight years ago Congress passed a law intended to put insurance coverage for mental health on par with medical coverage. Two years later the Affordable Care Act made mental-health and substance abuse coverage an essential benefit that every qualified plan must offer. Both initiatives have helped soften the financial blow. Still, true parity remains an unfinished promise, so much so that this year President Obama established a task force that has floated ways to improve the system.
But if you’re facing this formidable challenge, you need help now. The story that follows offers advice on meeting every financial hurdle thrown your way, along with lessons from families who have been down this tough path.
But if you’re facing this formidable challenge, you need help now. The story that follows offers advice on meeting every financial hurdle thrown your way, along with lessons from families who have been down this tough path.

challenge No. 1
Finding in-network care can be tough
Six in 10 adults with a psychological disorder have not received care in the previous 12 months, according to the Substance Abuse and Mental Health Services Administration, and cost is often to blame. A recent Kaiser Family Foundation survey found that the top reason for forgoing needed mental-health care was affordability (13% of respondents), followed by insurance not covering it (12%).
A key problem: Not enough practitioners take insurance. A survey published in JAMA Psychiatry in 2013 found that only 55% of psychiatrists accepted private insurance, while 89% of other medical specialists did so. The problem is more acute in some regions: Only 49% of psychiatrists in the Northeast take private insurance; in the South, it’s 43%.
The trend is similar, though less pronounced, with psychologists. In a 2015 survey by the American Psychological Association, a quarter said they bypassed insurance companies.
“Many mental-health providers don’t want to work with insurance because of the paperwork demands and low reimbursement rates and difficulties dealing with a large bureaucracy,” says Mary Gresham, an Atlanta psychologist who has opted out. She charges $175 an hour, far above the $70 to $116 that she says she’d get back from major carriers.
Of course, all doctors face paperwork headaches. Why don’t more cardiologists, say, go insurance-free too? Blame history. Although coverage for medical conditions became a routine part of employer insurance following World War II, behavioral health was often excluded. -“Mental-health care is the stepchild of our health care system,” says Katy Votava, president of, an insurance consultancy. Therapists who have grown used to filling their schedules with patients willing to pay full price upfront have little incentive to change now.

That shifts the burden to you. With an out-of-network doctor, you must pay the bill, then submit it to your carrier. But not only will the reimbursement rate probably be lower—say, 60%, vs. 80% for in-network care—but the insurer will base that on what it deems a “usual, customary, and reasonable” (UCR) price, not what your doctor charges. With a typical plan, the UCR might be the 80th percentile of fees in your market, according to If the UCR is $175, but you live in an area where each visit is $250 and your plan covers 60%, you might get just $105 back.

This is what Tameeka Ford encountered when her lifelong struggle with anxiety became unmanageable after a miscarriage. When the 43-year-old nonprofit administrator found a doctor, the practice did not accept insurance, leaving Ford to pay a $250 fee per session. She might have been entitled to out-of-network coverage, but the process of applying was too much to handle. “I just couldn’t cope with completing lengthy forms, answering personal questions, sending and resending documents,” she says. Over the past four months she has paid for therapy four times, to a tune of $1,000. But she has also skipped another eight sessions because of the cost.
Give in-network a shot. Start by asking for a referral from your primary-care physician, says Carolyn -McClanahan, a Jacksonville financial planner and medical doctor: “A family doctor has developed good networks and will help you find a therapist who’s covered by your health insurance.” You can also search via online tools. The therapist directories at and include insurance acceptance, as well as credentials and fees.
Be free to roam. No in-network option? To avoid shouldering the entire bill, make sure your insurance plan will let you go out of network. In 2016 a third of workers with employer insurance had a choice of health maintenance organizations, which restrict doctor networks, according to the Kaiser Family Foundation. A full 60% of all plans sold at for 2016 offered no standard out-of-network coverage, according to HealthPocket, a site that compares and ranks plans.
Preview your price. To get a sense of what you might pay out of network, go to, where you’ll find an index of charges for a therapy session near you (use code 90834 to search), plus an estimated charge based on a lower UCR and your plan’s reimbursement rate.
Pinpoint the right care. Zeroing in on a therapeutic regime that matches your needs can save you in the long term, since doctor hopping and medication swaps can prolong your care. Plus, you may not need the costliest specialists. For prescrip-tion drugs, you must see a psychiatrist. But for psychotherapy, a licensed clinical social worker with a master’s degree can handle counseling sessions for less. If a clinical psychologist is out of reach, try a psychiatric or mental-health nurse, says Purvi Bhatt, senior manager at ECG Management Consultants, a firm that advises medical providers.
The national average for a psychologist is $163 a session, vs. $136 for a clinical social worker, according to FAIR Health, a nonprofit health care information site. You can research treatment options for your particular mental-health condition at (click on “Learn More”).
Negotiate upfront. Many doctors offer a sliding scale based on your income, so ask about that at the outset. Atlanta clinical social worker Rikki Clark McCoy charges $100 for a regular office visit but gives discounts tied to earnings—25% off, for example, if you earn between $50,000 to $55,000.

challenge no. 2
Insurers still put up roadblocks
The goal of the 2008 parity law was to prevent group health plans from treating mental-health claims differently than purely medical claims. And it has largely worked in leveling the playing field, according to a report this fall by the White House’s Mental Health and Substance Use Disorder Parity Task Force. For the most part, you won’t face higher deductibles for mental-health services or lower treatment limits.
Yet enforcement problems persist that are harder to measure, the report found. For example, there are signs that insurers are more likely to demand prior authorization for mental health and substance abuse. The task force raised concerns that plans require more step therapy for mental-health services—meaning you may have to “fail first” at a lower-cost treatment before seeking a more comprehensive and costly alternative—even if the cheaper path is less effective for some. And there’s evidence that insurers apply so-called utilization reviews more rigorously—that is, assessing whether the treatment is medically necessary before okaying coverage.
In a 2015 survey by the National Alliance on Mental Illness, 29% of respondents reported a mental-health claim being rejected based on medical necessity vs. only 14% who were turned down for a medical claim on those grounds. Last year New York’s attorney general fined insurer Beacon Health Options (formerly ValueOptions) $900,000 for violating the parity law by issuing denials twice as often for behavioral health claims as it did for other medical or surgical claims, and four times as often for addiction recovery.
Try, try again. Your first step when an insurer denies your claim is to file an appeal. Most health plans allow for at least one. Read your claims denial for instructions—often you have to act within a certain window, such as two to six months.
Spell out the treatment you want covered using language from your plan’s benefit description, suggests the Kennedy Forum, a nonprofit working on mental-health parity. (Find it on your plan’s online members portal.) If you spoke to your insurer’s customer service in advance or during your appeal, include a record of any conversations that bolster your case, says Amir Mostafaie, director of quality and training at online insurance broker eHealth.
It helps if a doctor weighs in on your behalf, Mostafaie says, and you could include medical studies supporting the effectiveness of the treatment you seek, if you’ve done that kind of research. You can find a sample appeal letter on page 30 of the National Council for Behavioral Health online toolkit at
Bring in an advocate … You don’t have to go it alone. You can hire a pro to challenge claims on your behalf. Medical Billing Advocates of America, a national firm, charges $125 an hour or 25% of the savings recouped. It accepts only cases in which the patient responsibility is greater than $2,500.
… or be your own. When her insurer cut her off midway through intensive outpatient treatment for anorexia, 28-year-old New York City communications professional Joanna Mercuri tweeted at her insurer. While she got a standard “I’m sorry to hear that” response via Twitter, she knew the company had seen them, since reps referenced the tweets when she called to follow up.
Mercuri didn’t stop there: She found the name of her insurer’s medical director on a news release on the carrier’s website, correctly figured out his email address, and emailed him directly, copying the New York attorney general’s office. Her strategy worked, and her insurer paid for her to finish her treatment. “You have a lot more power than you realize,” she says. “Be the gadfly.”
Escalate your complaint. Government agencies can also help with your appeal. Reach out to your state insurance department and the U.S. Department of Labor (see the “Ask EBSA” tab on for frequently asked questions or call 866-444-3272 to speak to a benefits adviser). Another resource is a new website from the U.S. Department of Health and Human Services that helps patients who need
assistance with mental-health or addiction coverage: Find it at

challenge No. 3
Drugs are an ongoing high expense
With depression, anorexia, bipolar disorder, and many other psychological conditions, your treatment is increasingly likely to include prescription drugs. The percentage of Americans taking antidepressants, for example, jumped from 6.8% in 1999 to 13% in 2012, according to a study published in JAMA last year, in part because of new drugs that have come onto the market.
Overall, Americans with large-employer health insurance are spending less out of pocket on prescription drugs than in previous years, a study from Kaiser finds. But the number of workers and family members who spend more than $1,000 a year on meds is growing fast—from 1% of all enrollees in 2004 to 3% a decade later. Of that group, 39% have been diagnosed with a mental illness. “Mental health is one of the diseases that can lead to exceptionally high drug costs,” says Kaiser associate director Cynthia Cox.

Study up on your meds. Your drug plan is more complicated than ever. More than 80% divide the medications they cover—called a formulary—into three or more tiers, each with a different co-pay or coinsurance rate. Talk to your doctor about where your prescriptions fall in your formulary. In the first tier, where co-pays average $11, you’ll mainly find generics. Higher up the ladder, your costs rise too. The typical co-pay for a tier three drug is $57, twice what you would have paid 15 years ago, according to Kaiser. Coinsurance rates tell a similar -story: 17% for tier one and 37% for tier three. Given that, it’s worth trying a tier-one generic before a brand name. According to the drug--comparison site, you’ll pay no more than $8 a month for a prescription of the antidepressant Paroxetine, compared with $216 for Viibryd.
Speed up your step-up. Sometimes you’ll need the more expensive brand-name drug, but typically your insurer may require you to take a generic for months before okaying an upgrade. Step therapy for prescriptions has become more common, says Nadina Rosier, health and group benefits practice leader, pharmacy, at Willis Towers Watson. Keep in mind that anti-depressants generally take weeks or months to become effective, and you and your doctor may have to experiment to find the right dosage. But if you’re not seeing any results after six to eight weeks or the side effects are intolerable, ask your doctor to step you up faster, says Rosier. Once you’re on a brand-name drug, you can save up to a third on co-pays by ordering via the mail. Shavonne Carpenter, 31, has navigated the steps in her quest for the right medication for her schizoaffective disorder. The head life-coach trainer at Mental Health America, an Alexandria, Va., advocacy organization, Carpenter ended up in the hospital when a generic she was on wasn’t working. “You have to fail first before you get the help you need,” she says. She now pays about $200 a month for brand-name medications but feels she has little choice if she wants to feel her best.
Stick with your regimen. Only 31% of those on anti-depressants fully adhere to their treatment, according to a 2009 study in the Journal of Affective Disorders. Half took their drugs on and off; the rest skipped them altogether. Not following doctors’ orders can be more common with behavioral health disorders than with other chronic illnesses, says Rosier. Why? The side effects can be difficult to bear: Nearly two in three people who take antidepressants experience at least one, from dry mouth to weight gain. But taking your pills decreases your odds of experiencing a relapse, a 2014 study published in the Journal of Clinical Psychology found, which means more care, and more costs, down the line.

challenge No. 4
Intensive care can be the real budget buster
As with your physical health, early intervention for a mental-health disorder is crucial, both clinically and financially. Caught early, there’s a greater chance a condition can be managed with peer support, counseling, and medications, says Paul Gionfriddo, president and CEO of Mental Health America. “Don’t let it become a crisis,” he says.
Yet with any mental-health condition, sometimes low-intervention approaches aren’t enough. With an acute mental-health episode or serious addiction, treatment typically involves an inpatient hospital stay to stabilize the patient, followed by residential treatment, partial hospitalization (daily stays but not overnight), or intensive outpatient therapy.
Prices for residential facilities differ widely, but a typical range is $20,000 to $40,000 a month, says Katalin Goencz, an insurance consultant and patient-billing advocate in Stamford, Conn. The most generous insurance policies don’t place limits on treatment, but many impose some sort of cap, says Goencz. The standard that insurers generally use to determine if inpatient care is required is whether the person is a danger to himself or others, says Denise R. Black, a former medical necessity reviewer, and a
licensed clinical social worker and Ph.D. student at the University of Tennessee.

Know what you’re in for. Some plans will pay only for the therapeutic portion of a residential stay, leaving you responsible for room and board. Say a facility charges $30,000 a month; roughly $8,000 of that might be attributed to therapy, -Goencz says. If the facility is in network, that $8,000 might be reimbursed at 80% or 90% after the deductible and any other restrictions; if it’s out of network, it might be reimbursed at 60% or 70%, with a higher out-of-network deductible and further limits. By knowing the ins and outs of your policy, you can at least take a stab at budgeting in advance.
Really try to stay in network. Most health plans put a ceiling on your annual outlays. Under Obamacare, the out-of-pocket limit is $7,150 for individual coverage in 2017 and $14,300 for family coverage. A big caveat: These ceilings apply to covered in-network services. If you go out of network or use an uncovered service, your liability might be unlimited.
Go to school. As an adult, you’ll typically rely on insurance and savings to fund your treatment. But for children ages 3 to 21 with a serious condition such as ADHD or bipolar disorder, there’s another potential source: your public school district. The Individuals With Disabilities Education Act entitles every child up to age 21 with a qualifying disability to a free, appropriate public education tailored to his or her needs.
If you feel your local district isn’t providing your child with such an education, you can petition for private school funding. While the process varies by district, authorities will weigh the following considerations, says Tracey Spencer Walsh, a -special-education attorney in Manhattan: whether the public school’s plan is inappropriate for the child; whether the private school is appropriate and the least restrictive option available; and whether the family has done everything it can to cooperate with the evaluation process.
It’s not an easy test to pass. With most members of the National Association of Therapeutic Schools and Programs, 10% or fewer students are funded through their school districts, a spokeswoman says. And while parents always want the best for their children, under courts’ interpretation of the law, Walsh says, children are not entitled to a free “Cadillac education”; they are entitled to a “serviceable Chevrolet.”
Sapphira Murphy didn’t find that serviceable ride at her school. Diagnosed with bipolar disorder at age 4, Sapphira, of Easton, Mass., trashed her principal’s office in second grade and, afraid of hurting others, then hid in a closet, says her mom, Linette. The school district now pays the $500-a-day tuition at a residential treatment program 30 minutes from home. To make her case, Linette hired an education advocate, at $100 per meeting. You can search for professional help at the Council of Parent Attorneys and Advocates site,, where you’ll also find advice from families in the trenches.

challenge no. 5
The high costs can derail your finances
Christine Byrd was stunned when she got a quote of $75,000 a month for a residential facility to treat her daughter’s anorexia. An administrator told her that most families took out a second mortgage. Treatment from a free research study sparked her daughter’s recovery—but cross-country airfare still added up. Transportation costs mount quickly for eating disorder patients since few facilities are dedicated to the disease. “Cost and geography are the two big barriers,” says Claire Mysko, CEO of the National Eating Disorders Association.
Even with a less acute disorder, out-of-pocket bills can be a severe setback to your financial plans. What’s more, the cost of mental illness doesn’t stop at the doctor’s office. Research has linked depression and other psychological conditions to lower lifetime earnings and a drop in productivity.
For big sums, borrow smart. Advisers generally frown on parents raiding retirement accounts to cover college tuition. Yet using a 401(k) to pay for a child’s addiction treatment may be a different story. “When it’s life and death, the rules of thumb need to be reconsidered,” says Rand Spero, president of Street Smart Financial, a financial planning firm in Lexington, Mass. A home-equity line of credit is another option. Typically you can borrow up to 85% of the appraised value of your home minus the amount you owe on your first mortgage.
Protect your income. Under the Family and Medical Leave Act, employees at companies with 50 or more workers are entitled to up to 12 weeks of unpaid leave to tend to themselves or a family member. If you only need to change your routine, you also have the law on your side. The Americans With Disabilities Act requires companies with 15 or more employees to provide “reasonable accommodation” to help you do your job—say, adaptable start times or a quieter desk.
Tap the tax code. Draw from pretax medical spending accounts to pay for care. You can put as much as $2,600 in a flexible spending account for 2017, or, with a high-deductible health plan, open a health savings account (2017 max: $3,400 for individuals and $6,750 for families). Those low caps will only get you so far, but any help is worth it.
Pick up where you left off. If you stopped 401(k) contributions during treatment, start them up again as soon as you can. If you racked up credit card debt, a nonprofit credit counseling company can help you get it under control. For a small fee, these companies work with your lenders to get the interest rates on your debt reduced. Find one through the National Foundation for Credit Counseling at
With no savings, Byrd knows retirement is far off. Her father is still working at age 88. If she inherits his career longevity, she says, “I’ve got at least 25 years, and I want to make a difference.” Her hope: Open a small treatment facility with Snider. They’d call it Pepper’s Place. “That’s our dream.”