Therapists Who Don't Accept Insurance

The average cost of a therapy session falls between $100-$200, resulting in $20-$50 copay for patients with insurance. If you didn't know better, you might assume that insurance companies reimburse therapists for the difference, but this isn't the case.

A therapist may bill an insurance company $200 for a session, but they only get reimbursed for half of that – or even less. This means a therapist who chooses not to accept insurance can easily make double the salary of a therapist with the same skills and educational background who does.

"Some of the reimbursement rates are kind of insulting, to be honest," Addy says. "Some of them are very decent and a living wage, but some of them just aren't."

Therapists cannot disclose the rates that specific companies reimburse them, but Addy was able to give a range. "Company A might give me $60 for a 1-hour session and Company B might give me $160 for that same hour-long session," he says. Since rates vary from company to company, a therapist may choose to work with one insurer, but not the other.

While most therapists would like to help people in need, they also have to pay the bills. Typical costs of business for therapists include renting an office space, advertising (like monthly fees to list their services on websites like Psychology Today), and liability insurance, not to mention the student loans associated with having a high level of education.

This is why some mental health professionals accept insurance at the beginning of their careers, while they are building clientele, and scale down or stop working with insurance companies once they've established themselves.

The hassle of interacting with insurance companies can also be a deterrent for therapists. In theory, establishing relationships with insurers should be easy. But therapists say this isn't the case.

Insurance companies create quotas for how many therapists they will work with in a certain geographic area and types of therapists. They may decide that they need more bilingual therapists or specialists in addiction, so they reject those without a specialty area.

Even after being accepted by an insurance company, the work isn't over. Some insurers require therapists to continually provide documentation to justify treatment of a patient. Why? Mostly because insurers profit from recipients not using their benefits. So, many of them set high standards to get claims accepted.

And because mental health can be more difficult to measure than physical health, it can be harder to prove that care is essential.

"Insurance companies can be pretty hands on with their management. Some only authorize eight sessions at a time. And then if you want to do another eight sessions, you'd have to reapply or they want to see a treatment plan or something like that," Addy says.

This is a large part of why visits to mental health providers are more than five times as likely to be out of network than primary care visits.

Some therapists choose to work with a third party to submit their claims so they can save time and energy. But this adds another cost – and deterrent – for therapists that accept insurance.

There are laws that aim to address this problem. The Mental Health Parity and Addiction Equity Act, passed in 2008, sought to prevent insurers from imposing excessive limitations on certain mental healthcare-related benefits. And under the Affordable Care Act, stricter rules were imposed on insurance companies, requiring them to offer health plans with sufficient provider networks.

But some companies haven't followed the rules, such as Centene, one of the largest Medicaid managed-care contractors in the U.S. The company faced a class action lawsuit for failing to provide customers adequate access to its list of in-network providers in 2018.

It's hard to say how many more instances of this behavior are slipping through the cracks. Unfortunately, few clients — and even providers — understand their rights when it comes to insurance coverage, causing violations to go unreported.

Ironically, the shortage of therapists also contributes to the low rate of providers who accept insurance.

Demand for therapy is so high that some mental health professionals, especially those that are highly sought-after, don't accept insurance or work with a very limited number of insurers. This is simply because there is an abundance of patients who will pay out-of-pocket.

Nearly 150 million people in the U.S. live in a mental health practitioner shortage area, according to the U.S. Health Resources and Services Administration. That's well over a third of the population.

"If I'm full and I'm having to do referrals, I just can't take everyone who comes to me," Addy explains. This puts the responsibility on therapists to try to prioritize clients in the most need, and to sacrifice income to do so.

"The main reason [I accept insurance] is so that I can offer my services to people who would otherwise not be able to afford it," Addy says. But even therapists like Addy, who are determined to help financially strapped clients, can only offer a certain number of slots to those who can't pay out-of-pocket and still make a livable wage.

"In order for me to be a good therapist, I need to have some financial security — as much as anyone in today's world."

To strike a balance, some therapists devote a certain fraction of their slots to patients using insurance, for example, 12 out of 20 sessions per week. "And that can help to make your income a little bit more predictable," Addy says.