Will Insurance Continue to Cover Online Therapy?

Many therapists were skeptical of online therapy before the coronavirus pandemic and didn’t offer it. Some went as far as to say it wasn’t therapy at all. There was just too much missing from the experience of being in the therapy room. As far as they were concerned, without that sacred space, therapy was no longer therapy.

Then the pandemic changed everything. Suddenly, therapists who never considered offering virtual sessions had to figure out how to offer them. When it became the only way their clients could continue to have sessions, they changed their practices almost overnight. Many went from offering no online therapy to offering only online therapy.

The Time article and other therapist interviews have shown that therapists didn’t take long to change their minds about online therapy. They learned for themselves what the research shows: online therapy is effective, and the differences between online and in-person therapy are subtle, not definitive.

For one thing, it makes therapy more accessible. Online therapy makes it easier for clients with health issues, busy schedules, or young children at home to regularly attend therapy. Many therapists were delighted to see that with online therapy, cancellation rates went way down.

Some therapists were surprised to find that online therapy actually improved how connected they felt with their clients. The playing field was leveled when both therapist and client were on neutral ground, in and seeing into each other’s homes.

This broke down the traditional power structure of the therapy room. Many clients felt safer and more relaxed in virtual sessions, so they opened up more.

Yet the vast majority of therapists who have tried online therapy have concluded that the trade-offs balance out. They’ve seen that online therapy is just as effective as in-person therapy while making life easier for them and their clients.

And they plan to keep offering it. In fact, many say that the only thing that would keep them from continuing to provide online therapy is if clients—and insurance companies—stop paying for it.

We can’t read tea leaves and tell you what insurance companies will do in the future. But we can read between the lines of what insurance companies are saying and tell you

Even before the coronavirus pandemic, many insurance plans were already covering online therapy. This was due in part to their voluntary efforts to keep up with industry trends and in part due to state laws that require them to cover telemedicine.

Since the pandemic, new laws and policies have expanded coverage of telehealth services. In 2020, Medicare removed many long-standing restrictions on its coverage of telemedicine. They no longer limit telehealth coverage to people in rural areas, and they started covering telehealth services provided in a person’s home.

State Medicaid plans and private insurance plans soon followed suit. In fact, many plans went above and beyond to waive co-pays for telehealth visits during the height of the pandemic so that more people could access care safely from their own homes.

However, we don’t expect insurance companies to continue waiving co-pays like they did during the height of the pandemic. (Many have stopped already.) Whether insurance companies will continue to observe payment parity for telehealth visits (i.e. covering them at the same rate as in-person visits) is harder to predict. However, we think public pressure and changing attitudes will ultimately lead to payment parity, whether now or in the future.

History can tell us a lot about what to expect in the future. And recent history shows a trend toward significantly improved insurance coverage of mental health treatment.

This is largely due to two important laws. The 2008 Mental Health Parity and Addiction Equity Act (Parity Act) required insurance plans to cover mental health treatment in parity with medical treatment. This means that if an insurance plan covers mental health treatment at all, it can’t place restrictions on that coverage that it doesn’t place on medical treatment. It can’t limit your mental health visits more than it limits your medical visits or charge more for them.

The 2010 Affordable Care Act (ACA) expanded and enhanced the Parity Act by making it apply to a wider range of plans. It also required large group plans to cover mental health as an essential benefit, making it harder for plans to opt out of covering mental health treatment altogether. (Note, though, that the ACA doesn’t apply to all plans. Grandfathered older plans and plans at smaller companies don’t have to meet all the ACA requirements.)

Despite many threats and attempts to repeal it, the Affordable Care Act was never repealed. While the ACA hasn’t delivered on all of its promises regarding affordable insurance coverage, it has changed the game in other ways. For one thing, it has expanded access to mental health care tremendously.

So have new laws that state and federal governments have passed requiring insurance coverage of telehealth. The pandemic has had an even bigger effect.

Not only did the expanded availability of telehealth help people access mental health care during the pandemic, it also helped people get mental health care who couldn’t access it before the pandemic. By eliminating the commute to the therapy office and removing the need to find child care, online therapy opened the door to many new therapy seekers.

It seems unlikely to us that we’d go back to what we had before this revolution in access to mental health care. We expect to see the same kind of lasting change in coverage of online therapy as we’ve seen in general insurance coverage of mental health care in recent years.

Widespread adoption of online therapy is a huge change, but it may only be the beginning. Online therapy challenges many norms in the therapy world that may eventually fall by the wayside.

This policy not only limits options for clients, it limits how therapists can practice. This unfairly forces therapists who diligently maintain their licenses to watch as life coaches accept clients from all across the country. In response, therapists are pushing to change these laws and establish interstate license compacts—legal agreements to let therapists practice across state lines.

One is the Psychology Interjurisdictional Compact (PSYPACT). As of mid-2021, 26 states are participating in PSYPACT, meaning psychologists in these states can practice across state lines and offer online sessions to clients in any member states. Other states have pending PSYPACT legislation.

Other types of therapists are pushing for interstate compacts, too. Licensed mental health counselors and licensed professional counselors are working on an interstate compact for LMHCs and LPCs. The National Association of Social Workers (NASW) and Association of Social Work Boards (ASWB) are working on an interstate licensing compact for social workers.

The coronavirus pandemic accelerated the growth of telehealth. Insurance plans now widely cover telehealth services including online therapy.

Therapists have also warmed to online therapy. They are much less skeptical of it than they were before the pandemic, and they want to continue offering it. Just like it does for their clients, online therapy helps them better balance their family and work lives.

Due to the increased use of online care, more states are likely to pass laws requiring insurance companies to cover telehealth. Given the historical precedent of laws like the Affordable Care Act and the Parity Act, which permanently expanded insurance coverage of therapy, it seems likely that the changes we’re seeing in coverage of online therapy are only the beginning of a long-term trend.

It’s likelier than ever that your insurance plan covers online therapy. Our decision-making guide on using insurance to get online therapy can help you decide whether it’s the right choice for you. It’s not always the right choice for everyone, but it’s a fantastic option we embrace because we know it will help more people get the care they need.