Key Takeaways
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Medicare covers a wide range of mental health services, but coinsurance costs under Part B often lead to unexpected out-of-pocket expenses.
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In 2025, beneficiaries must pay 20% of the Medicare-approved amount for most outpatient therapy services after meeting the annual Part B deductible.
What Mental Health Services Does Medicare Cover in 2025?
Medicare provides extensive mental health coverage across both inpatient and outpatient settings. As of 2025, you’re entitled to several services under Original Medicare (Parts A and B):
Inpatient Mental Health Services (Part A)
If you are admitted to a general or psychiatric hospital, Part A covers:
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Semi-private room and meals
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Nursing care
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Therapy and treatment provided during your stay
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Medications administered in the hospital
Medicare only covers up to 190 days of inpatient psychiatric hospital care in your lifetime. If you’ve already used those days, further psychiatric hospital stays will not be covered.
Outpatient Mental Health Services (Part B)
Most therapy and counseling services fall under Part B. These include:
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Individual and group psychotherapy
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Family counseling related to your treatment
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Psychiatric evaluations and diagnostic testing
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Medication management
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Services from clinical psychologists, psychiatrists, social workers, and as of 2024, licensed marriage and family therapists (LMFTs) and mental health counselors (MHCs)
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Partial hospitalization programs (PHPs)
Telehealth services are also permanently covered for mental health, including visits conducted from your home.
The Role of Part B Coinsurance in Mental Health Costs
Once your annual Part B deductible is met ($257 in 2025), Medicare typically pays 80% of the approved amount for outpatient mental health services. You are responsible for the remaining 20% coinsurance, and this can add up quickly depending on the frequency and duration of your treatment.
For example, weekly therapy sessions, medication reviews, or check-ins with your mental health provider will each come with separate 20% coinsurance charges.
No Out-of-Pocket Cap Under Original Medicare
Unlike Medicare Advantage plans, Original Medicare does not have a built-in annual limit on out-of-pocket costs. That means:
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There is no maximum amount you will pay in coinsurance during the year.
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Frequent therapy visits can result in significant, ongoing bills.
To reduce this burden, many beneficiaries purchase Medigap policies. However, those come with their own premiums and eligibility requirements.
Does Medicare Advantage Offer Relief from Coinsurance?
Medicare Advantage (Part C) plans are required to cover at least the same services as Original Medicare, including mental health care. However, how much you pay out of pocket will vary:
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Some plans may offer lower coinsurance or copayments for outpatient therapy.
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Others might have prior authorization requirements or limit your provider network.
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All Advantage plans are required to set an annual maximum out-of-pocket (MOOP) limit, which does not exist under Original Medicare. In 2025, this limit is capped at $9,350 for in-network services.
While this protection can reduce financial risk, it’s essential to read the plan’s Evidence of Coverage (EOC) before enrolling. Always make sure your preferred mental health providers are in-network.
Who Can Provide Covered Mental Health Services?
Medicare only covers therapy or counseling when the provider meets strict licensure and enrollment criteria. As of 2025, covered providers include:
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Psychiatrists (MD or DO)
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Clinical psychologists
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Clinical social workers (LCSW)
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Nurse practitioners and physician assistants specializing in psychiatry
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Licensed professional counselors (LPC)
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Marriage and family therapists (LMFTs)
You must ensure your provider accepts Medicare assignment, which means they’ve agreed to charge no more than the Medicare-approved rate. Otherwise, you could face excess charges beyond the standard coinsurance.
When Will You Pay More?
It’s easy to assume Medicare will handle most of your mental health costs, but there are several scenarios where you’ll pay more than expected:
1. You Haven’t Met the Part B Deductible Yet
In 2025, the Part B deductible is $257. Until this amount is met, you pay the full Medicare-approved cost for outpatient services.
2. Your Provider Doesn’t Accept Assignment
If your therapist doesn’t accept Medicare assignment, you may be responsible for up to 15% more than the Medicare-approved amount.
3. You Need Frequent Therapy
Coinsurance is charged per session, so weekly or biweekly visits increase your total costs. For instance, four therapy sessions a month with a Medicare-approved rate of $100 per session means $80 is paid by Medicare, but you owe $20 each time — totaling $80 a month.
4. You’re in a Partial Hospitalization Program
Even though PHPs are less expensive than inpatient treatment, they can involve multiple services daily, each triggering separate coinsurance costs under Part B.
5. You Need Prescription Drugs for Mental Health
Part B does not cover medications unless administered in a clinical setting. You’ll need a Part D plan (or Advantage plan with drug coverage) for antidepressants, antipsychotics, or anti-anxiety medications. In 2025, there is now a $2,000 out-of-pocket cap under Part D, which can help, but you’ll still pay coinsurance until that cap is reached.
Do You Have Any Protections or Support Options?
Although mental health coverage exists, cost-sharing can deter people from seeking care. Here are ways you may reduce your out-of-pocket burden:
Use Preventive Services
Medicare covers annual depression screenings at no cost when performed by a primary care provider in a Medicare-assigned setting. This can be a first step toward identifying a need for further care.
Check for Extra Help or Medicaid
If you qualify for Medicaid or Medicare Savings Programs, your coinsurance responsibilities may be significantly reduced. Similarly, those with limited income may qualify for Extra Help with Part D costs.
Consider a Medigap Policy
If you’re enrolled in Original Medicare and not in a Medicare Advantage plan, Medigap can help pay for the 20% coinsurance. Not everyone qualifies, and premiums vary, but for some it provides essential financial protection.
Choose Providers in Advance
Always check if your mental health provider accepts Medicare assignment. Use the official Medicare Physician Compare tool or contact the provider directly.
Explore Telehealth Services
Telehealth is a valid and fully covered method for mental health treatment under Medicare, especially since its permanent expansion. It eliminates travel time and increases access, particularly for those in rural or underserved areas.
What You Should Know Before Starting Therapy
Before you begin therapy or counseling, prepare by reviewing the following:
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Have you met your Part B deductible? If not, you’ll pay the full Medicare-approved amount for each visit until you do.
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Are you seeing a provider who accepts Medicare? Confirm their participation status.
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Do you have supplemental coverage like Medigap or Medicaid? If yes, you may pay little to nothing. If not, you’ll owe coinsurance.
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Does your therapist require prior authorization or a referral? This is common with Medicare Advantage plans.
Understanding these upfront can prevent unpleasant billing surprises.
How Medicare Is Trying to Improve Access in 2025
Medicare has expanded its list of eligible mental health providers. Since 2024, LMFTs and MHCs are covered, which significantly broadens the pool of professionals. But other challenges remain:
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Provider shortages still limit access, especially in rural communities.
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Coinsurance costs remain a barrier even when services are available.
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Stigma surrounding mental illness continues to delay treatment for many older adults.
In response, Medicare is working with provider networks to improve transparency, ensure broader network coverage, and promote early intervention strategies through preventive services and telehealth.
Taking the Next Step Toward Mental Health Support
If you’ve been putting off therapy due to cost concerns, you’re not alone. Medicare covers a wide range of services, but you’ll need to understand how coinsurance, deductibles, and provider acceptance affect your total out-of-pocket costs.
Before scheduling your first session, confirm your plan’s details, explore supplemental coverage options, and be proactive about choosing Medicare-participating providers. These steps can help you protect both your mental health and your wallet.
If you need help reviewing your Medicare plan or finding options with better coverage, get in touch with a licensed agent listed on this website for one-on-one assistance.
