The Insurance Dilemma

It can be hard to make sense of the cost of therapy… Until you actually sit down and do the math.

why do so many therapists not accept my insurance?

This is a question I’ve heard far too many times, and it speaks to some major barriers that both clients and therapists face when working with insurance. Clients sign up for health insurance expecting it to cover reasonable care, only to find their choices severely limited in many cases. So why do so many therapists not work with insurance?

why the therapist you want might not work with insurance at all…

First off, let me be completely honest: insurance companies typically pay therapists nowhere near their standard fee. In addition to this pay cut, therapists who work with insurance companies are sometimes expected to complete mountains of additional paperwork after meeting with a client in order to be reimbursed for their services. These payments often come very late, and are sometimes denied for unclear reasons. Some estimates state that therapists working with insurance companies spend 1 hour on paperwork or insurance-related phone calls for every 2 hours they spend with clients. That means these providers may be spending 50% more time and effort to get paid half of their usual fee. To put it more simply, some therapists who work with insurance are paid 1/3 the hourly rate they would make in a standard fee-for-service practice.

This is not just an accounting problem for therapists, it’s also an issue for their clients. Because we live in a capitalist society, every therapist needs to make a certain amount each week to cover their professional expenses (renting an office, liability insurance, malpractice insurance, HIPAA-compliant phone/email services, electronic health record systems, license renewals, continuing education, etc) and personal expenses (food, shelter, health care, etc). If your therapist is being paid a fraction of their standard rate, they likely have had to increase their caseload accordingly. Instead of seeing 10-15 clients and focusing on their needs completely, insurance-based practices often take on much higher caseloads and divide their now-limited time and attention between clients and cutting through red tape.

I’m not trying to tell you a sob story about all the underpaid therapists out there, I’m just pointing out some basic math. All else being equal, a therapist who accepts insurance may have a much smaller fraction of their time and attention to devote to you than a therapist who does not.

In addition to higher caseloads and lower pay, it takes months of time and mounds of paperwork to become credentialed with many insurers in the first place. Therapists whose practices are already full may not be motivated to jump through so many hoops just to be paid less for their work. Although many private-pay practices offer reduced-fee or sliding-scale services to clients who can’t afford their standard rates, they may hesitate to provide such discounts to large insurance companies without a clear benefit. While some therapists rely entirely on the steady stream of referrals that an insurance contract provides, therapists with in-demand specialties or unique skills can often fill their practices without needing help from insurers, and may therefore forego credentialing with them.

We’ve covered some of the basic incentives involved in this decision, but we haven’t yet touched on one of the most important factors: therapist autonomy. As mental health care providers, therapists want to provide the best possible care for their clients. This may sometimes include treatments or approaches that aren’t within the strict limits of insurance policies (which may limit not only the types of treatment that are reimbursed, but also how many sessions are covered in a given period). If a client needs more frequent sessions, longer sessions, or novel treatment approaches, insurance-based therapists may be unable to feasibly provide these “extras” if insurance won’t pay for them. This leaves therapists in a tricky spot, and many are uncomfortable with these limitations. Therapists who want full control over how they treat clients may choose to go private-pay just to retain that level of professional autonomy.

but how can clients afford it?

While we haven’t yet explored all the possible reasons a therapist might choose not to work with insurers, you can probably already understand why so many therapists make this choice. What may be harder to understand is how clients can afford their fees! Many qualified therapists will charge standard rates ranging upwards of $120 a session. For weekly therapy (factoring in sick days and vacations, and average copay amounts), this could easily add up to a difference of $4,000 a year or more! Why would anyone pay that much when their insurance could give them a discount?

Well, first of all, many clients find that their insurance doesn’t kick in for sessions at all until they hit their deductible, which could mean paying privately for much of the year anyway. Others find their insurance limits their number of sessions in a given period, leaving them to pay full price for any additional sessions. Others still have a simple copay, but that copay may be $60 or $90 a session, which starts to add up quickly. While using insurance may seem like a no-brainer initially, many clients find (when they actually sit down and do the math including copays and deductibles) that picking the therapist they really want is worth it even without insurance “discounts”.

The importance of a good therapist-client match should not be understated. Finding the right therapist can make a huge difference in your success in treatment. If you think most therapists are basically the same, check out this article in The Atlantic about what big data says about comparative therapist performance, which states:

“A small mountain of clinical research shows that therapists—that is, anyone who provides talk therapy, from psychologists to social workers—vary widely in effectiveness. One study, led by John Okiishi of Brigham Young University, compared clinical outcomes from 91 therapists and found that the highest-performing among them helped clients improve 10 times faster than the overall average. On the other end of the spectrum, a study led by the psychologist David R. Kraus found that clients of the lowest-performing therapists were significantly worse off in the areas of violence and substance abuse at the end of treatment.”

While I personally found these statistics to be shocking, my clients who have been “therapist-shopping” previously assure me they are not. Having tried therapist after therapist and dutifully paying their weekly copay for literally years on end, some of these clients find they haven’t really improved at all. At that point, even the lowest copay can feel like a waste of money (not to mention the client’s time and effort) if the client is left with nothing to show for all those years of “affordable” therapy.

Instead of continuing to pursue the cheapest option, clients in this position may be ready to invest in themselves and make a skilled and specialized therapist a part of their healthcare budget. If the above statistics are correct, such clients may make more progress in a few weeks with the right therapist than they would have made in a year with their previous providers! Sometimes paying privately for therapy can end up being cheaper, faster, and easier than the alternatives, as hard as that may be to believe.

okay, but I still can’t afford it…

If you’re ready to seriously invest in your mental health in hopes of making more rapid and lasting progress, but still can’t manage the standard rates of the therapist you really want to work with, don’t despair! Many in-demand therapists feel strongly that quality healthcare should be available to all, and as such reserve a few slots in their schedule for sliding-scale or reduced-fee clients. Don’t ever hesitate to reach out to a provider you think would be a good match; they may be able to offer you a lower fee based on your financial situation. If they aren’t, they will still be glad you inquired, and should be willing to help you find a more affordable alternative.

If you’re looking specifically for therapists who offer reduced-fee slots, you can also check out Open Path Psychotherapy Collective, a site that connects potential clients with therapists offering reduced rates Open Path providers typically charge $60 or less per session, though there is a one-time fee to register.

If you’d like to work with me and need a reduced fee, you can apply here with no documentation required and no obligation.