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The Hidden Cost of Using Insurance to Fund Counseling

Did you know that depression can increase your life insurance premiums?

While seeking counseling no longer seems to have the stigma that it once did, insurance companies are still behind the times. Over the past few years, mental health conditions were more easily covered for many patients thanks to the Affordable Care Act (ACA) or Obamacare. While that seems to be a positive development, clients had to be given a diagnosis in order to receive coverage through their health insurance. It may not seem like a big deal, but they may not have realized that a diagnosis of depression in a variety of forms can impact life insurance coverage as well.

Life insurance companies consider those diagnosed with depression as having a greater chance of death from serious accidents, destructive self-medicating, and even suicide. Depression is often a general term for a number of possible emotional disorders and can be carefully reviewed by insurance underwriters, whether the diagnosis is due to environmental factors or organic origins such as a neurotransmitter imbalance. The life insurance underwriter will want specific information on the type of depression you were diagnosed with, when your episode(s) occurred, and whether the depression was successfully treated. They will also want to know if your therapist is concerned that you would commit suicide. They may seek this information in your permanent medical record. 

When you utilize health insurance benefits to fund counseling, the insurance company will require a diagnosis and treatment notes to support the need for ongoing counseling which is all included in your permanent medical record. In terms of securing life insurance, this kind of documentation is just part of the information requested by the life insurance company. You may experience delays in acceptance of your application, additional screenings and most often, higher than normal rates for premiums you continue to pay throughout your life if your medical records indicate treatment of various mental health diagnoses including depression. 

Now that the Affordable Care Act (ACA) aka Obamacare is likely to be repealed there will no longer be protections for pre-existing conditions. This can mean that you will be denied health insurance coverage based on the diagnoses in your permanent medical record or have to pay higher health insurance rates every month. It potentially could also mean that pre-existing conditions whether related to mental health or physical health will simply not be covered at all by your health insurance. It is so important to guard what is reported to insurance companies for yourself and your children. 

Rather than accepting insurance reimbursements, I offer a Fee Reduction Contract (link to scale available at the time of publication). I will provide a discount on my services based on annual household income and the number of people in the household. In the long run, I believe that paying for counseling “out of pocket” will be less expensive for my clients than utilizing insurance benefits. I do not want to give a diagnostic label to anyone who does not meet criteria and will not benefit from that diagnosis. 

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