This is why so many people are switching to self-pay for therapy

Julie Trujillo


Several reasons might motivate someone to self-pay for therapy instead of using insurance, including getting the best care at an affordable price.

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This is why so many people are switching to self-pay for therapy


Several reasons might motivate someone to self-pay for therapy instead of using insurance. Here are a few:

  1. Confidentiality: Self-paying provides a higher level of privacy. If insurance is used, the insurance company has access to the client's diagnosis, treatment plans, and progress notes. Some people might prefer to keep this information entirely private.
  2. Choice of Therapist: Not all therapists accept insurance, and some of the best therapists might only take private pay. Therefore, to see a specific therapist, a client might choose to self-pay.
  3. Avoiding Diagnosis: In order for insurance companies to cover therapy costs, a mental health diagnosis is often required. Some clients might not meet the criteria for a mental health diagnosis, or they might not want to have a diagnosis on their medical record.
  4. Scheduling Flexibility: Therapists who don't deal with insurance may offer more flexible scheduling options. Some therapists might offer longer session times or different formats (like walking therapy or online therapy) that may not be covered by insurance.
  5. Control over Treatment: When using insurance, treatment might need to follow certain protocols and timelines set by the insurance company. By self-paying, the client and therapist have more freedom to determine the course and length of treatment.
  6. Limited Coverage: Some insurance plans have limitations on the number of sessions covered or only partially cover the cost of therapy, making self-pay a more straightforward option for those who can afford it.
  7. Ease and Simplicity: Dealing with insurance can sometimes be a complex process involving copays, deductibles, pre-approvals, and paperwork. Paying out-of-pocket can be much simpler.

Can self-pay be cheaper than going through my insurance?

Here are a few scenarios where self-pay might be cheaper:

  1. High Deductible Health Plans (HDHPs): If an individual has a high deductible health plan, they need to pay a significant amount out-of-pocket before insurance begins to cover costs. If their deductible is high and they haven't met it yet, paying out-of-pocket could be cheaper than going through insurance.
  2. High Co-pays or Co-insurance: Some insurance plans require a high co-pay or co-insurance for each therapy visit. Depending on the therapist's self-pay rate, it might be cheaper to pay out-of-pocket. For instance, if a therapist charges $100 per session and the insurance co-pay is $50, but the therapist offers a discounted self-pay rate of $70, the self-pay option would be cheaper.
  3. Out-of-Network Therapists: If a client is seeing an out-of-network therapist, their insurance may cover only a small portion of the cost, or none at all. If the therapist offers a reasonable self-pay rate or sliding scale, it could be more cost-effective to self-pay.
  4. Limited Coverage: Some insurance plans limit the number of therapy sessions they cover in a certain timeframe. If a client needs more frequent therapy, paying out-of-pocket might be the only way to continue with the additional sessions.

On the other hand, if an individual has a robust insurance plan with low co-pays, comprehensive mental health coverage, and a large network of providers, using insurance will likely be a cost-effective option. It's crucial to fully understand the details of the insurance plan, including deductibles, co-pays, out-of-pocket maximums, and coverage limitations before making a decision. It can also be helpful to discuss these details with the therapist or clinic, as they may be able to provide additional insight or options.


Getting treatment through your insurance

There are several reasons why an individual might choose to use their insurance for therapy sessions over self-pay:

  1. Cost: Therapy can be quite expensive when paid out-of-pocket, especially for individuals who require regular or long-term sessions. If a person's insurance covers mental health services, it can significantly reduce the cost per session, making it more affordable.
  2. Coverage: Many insurance plans now include coverage for mental health services in response to growing awareness and legislation around mental health parity. This means individuals can access mental health services just like they would any other health service.
  3. Utilization of Benefits: Individuals pay for health insurance to cover potential health care needs. Since mental health falls under this care, many individuals prefer to utilize the benefits they're already paying for.
  4. Out-of-Network Benefits: Even if a particular therapist does not accept a client's insurance, the client might still have out-of-network benefits that can cover a portion of the therapy cost. The client pays upfront and gets reimbursed by their insurance later.
  5. Legality of Practice: Therapists who accept insurance are usually licensed professionals, which assures clients that they meet certain standards of practice. Some clients may feel more comfortable knowing that their therapist is licensed and vetted by insurance companies.
  6. Regulated Fees: Insurance companies negotiate rates with therapists, which can often lead to lower costs per session than a therapist's standard self-pay rate.

Despite these reasons, individuals should consider that using insurance requires therapists to provide a diagnosis for their clients, which becomes part of the client's medical record. Some people might not be comfortable with this. Furthermore, insurance companies may limit the number of sessions covered, or only cover certain types of therapy. It's important for clients to understand their insurance plans and discuss these factors with their therapists. In the end, if a client's insurance refuses to cover the cost of sessions that have already been completed, the burden of payment will then fall onto the client.

Out-of-network benefits can still apply to you

"Out-of-network" refers to healthcare providers who are not contracted with a particular health insurance company. Despite this, many insurance plans still provide benefits for using out-of-network providers, although usually at a lower rate than for in-network providers.

If you're considering seeing an out-of-network therapist, here's how the reimbursement process generally works:

  1. Understand Your Plan: First, you need to understand your insurance plan's out-of-network benefits. Every plan is different. Some may cover a certain percentage of the "usual and customary" costs of therapy, while others may only cover costs exceeding a certain threshold. Make sure you know what your deductible is, as you'll need to pay this amount out-of-pocket before insurance starts to cover costs.
  2. Payment: Typically, you will pay the therapist directly at the time of service. This amount may be more than you'd pay for an in-network provider.
  3. Superbill: The therapist will provide you with a receipt or a document known as a "superbill." This document contains all the necessary information your insurance company needs to process your claim. This often includes the provider's information, your diagnosis code, the type of service you received, the date of service, and the amount you paid.
  4. Submit Claim: You then submit this superbill to your insurance company along with a claim form that you can obtain from your insurance company's website or customer service. The claim form may ask for information about the provider, the service, the reason for the service, and your payment details.
  5. Reimbursement: If approved, the insurance company will reimburse you directly according to the terms of your plan. This may take several weeks or even months. Keep in mind that you may not be reimbursed the full amount that you paid, especially if your therapist's rate is higher than the "usual and customary" rate that your insurance company recognizes.

Remember, it's crucial to understand your insurance plan's out-of-network benefits and to communicate with both your therapist and your insurance company about costs and reimbursements. Be prepared for the possibility that the process can be time-consuming and sometimes complex.