A Season Of Discontent Stressed out? Here's how to manage your health insurance--and control your own bills.
By Leslie Haggin Geary

(MONEY Magazine) – War, stock market blowouts, unemployment, terrorist alerts--there's no question that life in America has been stressful lately. Says Michael Faenza, ceo of the National Mental Health Association: "The big question is what the long-term impact of Sept. 11 will be. Employee assistance programs, mental-health facilities and clinics have reported an increase in the use of services since the attacks."

In a normal year, one in five Americans experiences anxiety, depression or other effects of mental illness. To help them, private medical insurers pay about $18 billion a year for mental-health care, which includes prescription drugs like Prozac as well as talk therapy or, in the worst cases, stays at hospitals or rehab centers. Individuals shell out another $12 billion of their own money, according to the U.S. Surgeon General's office.

But this has been no normal year, and experts expect depression rates to continue to rise. With psychiatrists in major cities charging up to $200 a session, paying the bills may be the greatest obstacle to treatment.

According to the most recent Kaiser Family Foundation study of employer-sponsored health insurance, 96% of plans provide mental-health benefits, but only 13% grant unlimited treatment; 48% cap outpatient mental-health care at 30 visits or fewer a year. What's more, your company plan may turn you down. In that case, you'll have to figure out how to cover the costs on your own. Here's a road map--from how to handle health insurance to how to reduce your costs if you do have to pay out of pocket.

Use language that your insurer understands. All health plans insist on pre-approving mental-health treatment. Your physician's referral may suffice, but you may have to talk to an insurance company representative over the phone. The process can be frustrating. "You may get a rep who'll tell you to go to church or wait three weeks," says Deborah Peel, president of the National Coalition of Mental Health Professionals and Consumers.

You may not feel up to sharing feelings with a total stranger. It's natural to want to underplay your state of mind and use benign phrases like "stressed out" or "blue." But with insurers, using the wrong expressions can be a costly mistake. Neither a doctor nor an insurance company rep is likely to refer you for care unless you have a condition listed in the mental-health industry bible, the Diagnostic and Statistical Manual of Mental Disorders (or dsm-iv). "Stress is not a dsm-iv category," warns Peel. Major depression is officially defined as feeling depressed or irritable or experiencing a loss of interest or pleasure most of the day for at least two weeks, plus four additional symptoms, such as a significant change in appetite or weight, difficulty sleeping or waking, agitation, excessive feelings of guilt or worthlessness, or recurrent thoughts of death or suicide.

Peel recommends not minimizing problems. "Be specific without going into great personal detail," she advises. "You could say, 'I'm feeling anxious and more worried than usual. I've felt this way for several weeks. It's not like me, and I need to see a professional.'"

Low-cost routes to treatment. If you are open to sharing fears and concerns in semiprivate settings, you should consider group therapy, says Paul S. Appelbaum, president-elect of the American Psychiatric Association. Studies have shown that group therapy can be as effective as individual treatment. Group therapy costs 30% to 50% less than private sessions and usually qualifies for insurance coverage. The American Group Psychotherapy Assocation (www.agpa.org; 877-668-2472) can help you find qualified providers in your area.

Medical schools are another source of less expensive, high-quality care. You will be treated by residents who have graduated from medical school but have not yet completed psychotherapy training. Schools may also offer treatment for children. The University of Texas at Galveston, for example, recently opened the Mood and Anxiety Center for Children and Adolescents. Kids who participate in its studies on anxiety, depression, post-traumatic stress and other mental-health issues receive free therapy and medication, if necessary. Finding a training program may take some work. Start by contacting the Association of American Medical Colleges (www.aamc.org).

Employee-assistance-program caveats. Even if your company offers mental-health benefits, you may still be encouraged to start with the company's employee assistance program. But be aware that EAPs are not free alternatives to private counseling. Antoinette Samuel, CEO of the Employee Assistance Professionals Association, or EAPA, says EAP sessions "provide short-term assistance, not ongoing mental-health treatment."

EAP staffers may be marvelous, but there are no state or federal regulations that set standards for training. (EAPA does set standards for its members.) And in the majority of states, confidentiality is not mandated. Before disclosing information in an EAP session, ask about your right to privacy and what training EAP staffers have.

Use tax write-offs to cut costs. Most people in therapy will find that, eventually, they are digging into their own wallets. At that point, tax-saving strategies can pare the bills. Flexible spending accounts, which are available through many employers, allow you to use pretax dollars for therapist visits as well as for co-payments and deductibles.

You can also deduct therapy from your income taxes as a medical expense. To do so, your total medical costs (including those unrelated to therapy) must exceed 7.5% of your adjusted gross income. Mental-health expenses that qualify for write-offs include therapy, prescription drugs--even transportation to Alcoholics Anonymous meetings, so long as a doctor or a therapist has advised you to attend. For detailed rules, see IRS Publication No. 502 at www.irs.gov.

Finally, try not to let money issues prevent you from obtaining care, advises Seattle psychiatrist Ronnie Stangler. Many practitioners will reduce their fees when necessary. "Mental health has a direct bearing on one's productivity and earning power," Stangler says. "This is money well spent."