ABA Therapy & Insurance Coverage – How Does it Work?

ABA Therapy and Insurance – How Does it Work, Steps to Progress

by | Aug 4, 2023 | ABA Therapy

The Cost of Applied Behavior Analysis (ABA)  Therapy

Applied Behavior Analysis Therapy (ABA) therapy is expensive because each child has an individual Registered Behavior Technician (RBT) working with them for up to 40 hours a week.  In addition, each child’s therapy is supervised by a Board Certified Behavior Analyst (BCBA) who directly supervises at least 10% of the hours of therapy that the child receives, provides parent training, monitors progress, and updates treatment goals. All of this adds up to a cost that is beyond what most families can pay privately. As a result, most families rely on medical insurance coverage to pay for the cost of ABA therapy.

Premiums, Co-Pays, Deductibles, Co-Insurance, Out-of-Pocket Maximums

The premium is the amount that families pay each month for insurance coverage.  When family members receive medical services there is often another cost involved, either a co-pay, a deductible, co-insurance, or an out-of-pocket maximum.

Some insurance policies require that families pay a daily co-pay for each day their child receives ABA services.  The co-pay is the same regardless of the number of hours of therapy the child receives that day, so parents will pay the same co-pay for two hours a day of therapy or eight hours a day of therapy.  Co-pays typically range from as little as $20 per day to as much as $65 per day, depending upon the policy.  If the child is attending ABA five days a week the total co-pays for a week could range from $100 – $325.

Policies may also have a deductible and/or out-of-pocket maximum that the family must pay before the policy will begin to cover ABA therapy.  Deductibles may be as low as $500 or maybe in the thousands of dollars.  In many cases, after the family has incurred enough expenses to meet the deductible, the policy may require that they pay a percentage of costs, such as 10% or 20%, until they meet the out-of-pocket maximum for their policy.  Some policies may have no co-pays or deductibles but have an out-of-pocket maximum that must be reached before the policy will cover ABA therapy.

Parents need to realize that because ABA is so costly if their policy has a deductible or out-of-pocket maximum, that cost will be incurred within a very short period, as little as a week to as much as a few months.  Because that is the parent’s share of the cost, they will owe that amount to the ABA provider within a week to a few months.

ABA providers cannot waive the amounts that parents owe for ABA services.  Insurance company contracts require that ABA providers collect whatever fees the parents owe for services.  If the providers do not collect those fees, they will violate their contracts with the insurance companies and could risk having their contracts terminated by the insurance company.

One solution that helps both parents and ABA providers deal with the issue of high initial costs to parents is to agree to a payment plan. This allows the parents to pay their deductible or out-of-pocket maximum over an extended time.

Multiple Policies that Cover ABA

Families may sometimes have two insurance policies at the same time, either on an ongoing basis or when a new policy has started before a prior policy has been terminated.  When this happens, one policy will be considered the “primary” policy and the other policy will be considered the “secondary” policy.  The primary policy must be billed first, even if it does not cover ABA and the secondary policy must be billed second.

The insurance companies determine which policy is primary and secondary.  Insurers require that families notify them if they have more than one policy.  Parents must call both insurance companies, notify them of the other policy, and ask which policy is primary.  If the insurance companies find out later that there is more than one policy it can result in complications for both the family and the provider.

If a family has two policies that cover ABA, the secondary policy may cover the remaining ABA costs, such as co-pays, that are not covered by the first policy.  It depends upon the terms of the policies.

Affordable Care Act (ACA) Policies

Some families whose insurance policies do not cover ABA, who have been denied Medicaid, or even those who have Medicaid, may choose to purchase an Affordable Care Act (ACA) policy for their child to pay for ABA therapy.  ACA policies vary and may have a low monthly premium with a high out-of-pocket maximum, or a higher monthly premium with daily co-pays.

When evaluating ACA policies, it is important to look at the total cost of the insurance, including the monthly premium, the daily co-pays, and the out-of-pocket maximum.  It may be more cost-effective to purchase a policy with a higher premium, a high out-of-pocket maximum, but a low daily co-pay.  Parents who are considering an ACA policy may want to consult with an insurance broker who is knowledgeable about purchasing ACA policies to cover ABA therapy so that they can be sure to purchase the best policy for their situation.

We Can Help You Find ABA Coverage

At Steps to Progress, we strive to make the intake and insurance process as simple as possible. Before we provide services to a child, we provide parents with information to inform them of their share of the costs for ABA. We also refer parents to brokers who know ACA policies.

Finally, we work with parents to develop payment plans for policies with high out-of-pocket maximums. It’s our goal to help parents understand their coverage to ensure that their children receive the best ABA therapy.

Have questions about your insurance coverage? Ready to apply for ABA therapy? Get started with Steps to Progress today!

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