Clients & Clinicians

Mental Healthcare Explained: Copays vs Coinsurance vs Deductibles

Brandon Grill
March 22, 2024

Mental Healthcare Explained: Copays vs Coinsurance vs Deductibles

When it comes to mental health, navigating insurance terms like copays, coinsurance, and deductibles can be confusing. It's important, though, because understanding these terms helps you manage your mental health care effectively. In this article, we're going to break down these concepts into plain language.

You'll learn:

Let's get started on making sense of these insurance terms, beginning with a realistic example, so you can focus more on your well-being and less on paperwork.

Copays vs Coinsurance vs Deductibles in Real Life

Meet Emily, a 30-year-old graphic designer who recently started therapy for anxiety and stress management. Emily's journey through the world of mental health insurance provides a clear example of how copays, coinsurance, and deductibles work.

Emily has a health insurance plan that includes mental health coverage. Her plan comes with:

In January, Emily began her therapy sessions, paying $150 per session. Since these were her first medical expenses of the year, they also went towards meeting her $500 deductible. Each session she paid out-of-pocket went towards her deductible.

By the first week of February, her therapy sessions (along with a few other medical expenses) totaled more than $500, meeting her deductible.

From this point, her insurance started covering a percentage of her therapy costs. For each subsequent therapy session, instead of the full charge, Emily was responsible for 20% of the cost - this is her coinsurance. If a session costs $150, Emily pays $30 (20% of $150), and her insurance covers the rest.

This pattern continued until she reached her annual out-of-pocket maximum. This is a limit set by her insurance on the total amount she has to pay in a year. Once this limit was reached, her insurance covered 100% of her therapy costs for the rest of the year.

Lastly, due to Emily’s treatment plan, she had to visit a general physician for a checkup. She paid the $25 copay rate set by her insurance and their contract with the physician. This copay did not go towards her deductible. But it did add to her out-of-pocket maximum for the year.

Emily's story illustrates how copays, coinsurance, and deductibles can work together in a mental health context. She initially paid copays for each session, then coinsurance after meeting her deductible, and finally nothing after reaching her out-of-pocket maximum. Already you can see how copays vs coinsurance vs deductibles work.

Understanding Copays in Mental Health Insurance

Copays are a fundamental aspect of health insurance, including mental health coverage. In simple terms, a copay (short for copayment) is a fixed amount you pay for a healthcare service, typically when you receive the service. The amount can vary depending on your insurance plan and the type of service.

In the context of mental health, copays are often applied to psychiatrist visits, therapy sessions, and sometimes even prescription medications. For example, if your insurance plan has a $25 copay for therapy sessions, you'll pay $25 each time you see your therapist, regardless of the session's total cost.

One key thing to remember about copays in mental health insurance is that they are not a one-size-fits-all figure. They can vary widely based on your specific insurance plan, the type of mental health service you're receiving, and even the provider you choose. Some insurance plans might have lower copays for in-network therapists compared to out-of-network providers.

Moreover, copays typically do not count towards your deductible. This means that even if you pay copays for mental health services, you might still need to reach your deductible before your insurance covers other medical expenses. However, copays usually do count towards your out-of-pocket maximum, the total amount you’ll pay in a year for covered services.

Understanding copays and how they apply to your mental health treatment is crucial. It helps you budget for your care and avoid unexpected expenses. Always check your insurance plan details or contact your insurance provider for specific information about your copays for different mental health services.

Coinsurance: What It Means for Mental Health Coverage

Coinsurance is another crucial element in understanding mental health insurance. Unlike a copay, which is a fixed amount, coinsurance is a percentage of the cost of your healthcare service that you pay after meeting your deductible.

In mental health care, coinsurance typically applies to services like therapy sessions, psychiatric evaluations, and sometimes medication management. For instance, if your insurance plan has a 20% coinsurance and the total cost of a therapy session is $150, you would pay $30 (20% of $150) after your deductible is met. The rest, in this case, $120, would be paid by your insurance.

It's important to note that coinsurance rates can vary based on whether your provider is in-network or out-of-network. In-network providers usually have negotiated rates with your insurance company, resulting in lower out-of-pocket costs for you. On the other hand, out-of-network providers may lead to higher coinsurance payments.

Also, keep in mind that coinsurance only kicks in after you've met your deductible. Until then, you're responsible for the full cost of the service. After meeting your deductible and before reaching your out-of-pocket maximum, coinsurance is how you share the cost of care with your insurance.

Deductibles in Mental Health Insurance

Deductibles play a pivotal role in mental health insurance, impacting how much you pay for care. A deductible is the amount you need to pay for your health care services before your insurance plan starts to pay.

In the realm of mental health, this means that before your insurance covers any portion of the cost for services like therapy sessions, psychiatric evaluations, or medication, you must first meet your deductible. For example, if your deductible is $500, you will pay for all your mental health services out of pocket until you have spent $500.

It's essential to understand that deductibles reset annually. This means each year, you start over in meeting your deductible. Also, not all health care services may count toward your deductible, so it's crucial to check with your insurance provider to understand which mental health services contribute to your deductible.

Once you have met your deductible for the year, your insurance starts to share the cost of your services. This is where copays and coinsurance come into play, as illustrated in our earlier sections.

Understanding your deductible is vital in managing your mental health care expenses effectively. It helps you plan your healthcare budget and avoid unexpected costs. Always review your insurance plan's details or consult your insurance provider to clarify your deductible and how it applies to mental health services.

Another Real-Life Scenario: Navigating Complexities in Mental Health Insurance

Meet Jordan, a 40-year-old teacher seeking treatment for depression. Jordan's experience with mental health insurance highlights the complexities of copays, coinsurance, and deductibles, along with unexpected hurdles and learnings.

Jordan's insurance plan includes a $1,000 annual deductible, 30% coinsurance for mental health services, and a $40 copay for specialist visits.

Initial Thoughts And Meeting the Deductible:

When Jordan started therapy in February, he was initially burdened by the $200 cost per session. However, he realized that this would change once he met his deductible of $1,000. Which he did after a few months.

Dealing with Coinsurance:

With the deductible met, Jordan was responsible for 30% of his therapy costs. A session costing $200 now meant a $60 expense for him. Though it was still a significant burden, he was able to afford this much easier than the full session fee of $200. Jordan saw the importance of understanding the nuances of his insurance plan.

Unexpected Hurdle: Out-of-Network Challenges

Jordan decided to switch therapists due to a lack of progress. His new therapist, however, was out-of-network, leading to higher therapy costs and a higher coinsurance percentage. This change significantly increased his out-of-pocket expenses, a scenario he hadn't prepared for.

Reaching the Out-of-Pocket Maximum:

Towards the end of the year, Jordan reached his out-of-pocket maximum. This meant his insurance covered 100% of his therapy costs for the remaining months. While this provided financial relief, the journey to this point was more challenging than he had expected.

Copays with Specialists:

Jordan’s new therapist requested that he schedule a blood screening to see if he had any nutrient deficiencies. Lacking the right dietary nutrients could contribute to his depression. Luckily, the visit only costed Jordan a $40 copay, and clarified that his diet was not an issue.

Key Learnings:

Jordan's experience taught him the importance of thoroughly understanding insurance terms and being prepared for the overall cost. He learned to consider factors like in-network versus out-of-network providers and to plan financially for the entire year, considering both the deductible and out-of-pocket maximum.

Jordan's story, with its ups and downs, serves as a complex but insightful example of navigating mental health insurance, providing readers with a deeper understanding of how copays, coinsurance, and deductibles work in real-life scenarios.

Comparing Copays, Coinsurance, and Deductibles in Mental Health Insurance

Understanding the differences between copays, coinsurance, and deductibles is crucial when navigating mental health insurance. These terms represent different ways your insurance plan may require you to share in the cost of your care.




Key Differences:

Understanding these differences helps in budgeting for mental health care. Choosing a plan with lower copays might be beneficial for frequent therapy sessions. A lower deductible might be preferable if you anticipate high medical expenses in a year.


Navigating copays, coinsurance, and deductibles in mental health insurance requires understanding how each affects your out-of-pocket costs. By comparing these elements, you can make informed decisions about your mental health care and manage your financial responsibilities more effectively.

Tips for Navigating Mental Health Insurance

Navigating mental health insurance can be complex, but understanding a few key tips can make the process smoother and more manageable.

Understand Your Plan Thoroughly:

Familiarize yourself with the specifics of your insurance plan, including copays, coinsurance rates, and deductibles. Knowing these details upfront can help you budget for your mental health care and avoid surprises.

Inquire About In-Network Providers:

Using in-network providers typically results in lower out-of-pocket costs. Ask your insurance provider for a list of in-network mental health professionals and facilities.

Keep Track of Your Expenses:

Maintain records of all your mental health care expenses, including copays and receipts for services. This will help you keep track of your deductible and out-of-pocket maximum.

Plan for High Deductible Costs:

If your plan has a high deductible, consider setting aside funds in a health savings account (HSA) or a flexible spending account (FSA) to cover initial costs.

Understand Mental Health Parity Laws:

Familiarize yourself with mental health parity laws, which require insurance plans to provide mental health and substance use disorder benefits comparable to medical/surgical benefits.

Seek Assistance for Complex Situations:

If you encounter complexities or disputes with your insurance, consider seeking help from a healthcare advocate or a mental health professional who can assist with insurance issues.

Regularly Review and Update Your Plan:

Health insurance needs can change over time. Regularly review your plan to ensure it still meets your mental health care needs, especially if your situation changes.

By implementing these tips, you can navigate the intricacies of mental health insurance more effectively and ensure that you get the care you need without undue financial strain.

Final Thoughts on Copays, Coinsurance, and Deductibles

In this article, we've explored mental health insurance, focusing on copays, coinsurance, and deductibles. Through real-life scenarios of Emily and Jordan, we've seen how these elements can directly impact the cost and accessibility of mental health services.

Key Takeaways:

Understanding these aspects of mental health insurance empowers you to navigate your healthcare more effectively. It's not just about managing expenses but also about ensuring that mental health services are accessible when needed.

Navigating mental health insurance can be tough, but with the right knowledge and tools, it becomes a manageable part of your journey toward wellness. If you’ve enjoyed this article, please share it with your friends on your favorite social media platform.


This blog post is provided for informational purposes only and is not intended as legal, business, medical, or insurance advice. Laws relating to health insurance and coverage are complex, and their application can vary widely depending on individual circumstances and state laws. Similarly, decisions regarding mental health care should be made with the guidance of qualified health care providers. We strongly recommend consulting with a qualified attorney or legal advisor, insurance representative, and/or medical professional to discuss your specific situation and how the laws apply to you or your situation.

About the Author
Brandon Grill

Brandon Grill is a mental health copywriter and marketer based in Las Vegas, NV. He loves helping mental health professionals build fulfilling businesses. You can find Brandon going on a walk with his adorable nephews.