6 Reasons NOT to Use Your Health Insurance to Pay for Therapy

Have you ever considered paying for therapy out of pocket?

If your health insurance covers the cost of counseling services, probably not. Before I became a therapist, it never crossed my mind to pay any of my healthcare out of pocket—especially if I could take care of everything with a measly $25 co-pay. Now that I’m on the other side of the fence, I actually pay for much more of my healthcare instead of relying on my insurance (and this includes paying out of pocket for my own therapy).

If you’ve read this far, you’re probably wondering, “But I have insurance…why wouldn’t I use it? Why pay more?” I understand the allure of using your health insurance to cover the majority of the session fees, but do you realize what you give up for that co-pay? If not, allow me to shine some light on the truth. I’ve learned a lot of things throughout my career as a therapist. Things consumers don’t know. Things that I would want you to know if I were you. And so I’m here to tell you the things I want all clients to know before/when they are using insurance-approved therapists.

  1. Your therapist has to diagnose you to get you reimbursed.
    Insurance companies require a diagnosis so they can decide if they will pay for therapy or not. This means your therapist must give you a diagnosis that your insurance will cover even if you don’t really need a diagnosis. And these diagnoses follow you. In many cases, mental health diagnoses do not have a statute of limitations meaning they will follow your forever as “pre-existing illnesses.” As a client it is rare that you ever even know your diagnosis, so I would consider this to be one of the most motivating reasons to pay out-of-pocket because when you do, your therapist does is not required to give you a diagnosis.
  2. Your records are not protected.
    Your insurer can audit your records at any time they wish. This means any details that your therapist might not have included in the paperwork (perhaps for good reason) is technically open to the eyes of any “claims specialist” the company hires. Again, this might not matter to you. But if you hold high clearance for a job, or have other reasons you want your information to be held confidential- this is important to know.
  3. Your care is dictated by the insurance company.
    Whenever you are diagnosed, the insurance company will decide how much treatment and what type of treatment you will receive. Meaning, rather than giving you the best care possible that suits your needs, you will be designated a treatment plan based on your insurance company. Simply put, the care of the client is dictated by the insurance company, and the therapist essentially works for the insurance company, not the client. This can compromise the quality of mental health services provided.
  4. Insurance almost never pays the full fee.
    This means you are either going to be responsible for the remainder (which you need to clarify ahead of time) or it means your therapist is working for less than a fair market wage. Most insurance companies reimburse therapists at a very low rate, typically lower than the set fee from the clinician. It makes it hard to do good work with clients when your therapist is worrying about how he or she is going to pay their bills and sustain a practice.
  5. You are not seeing someone with lots of experience.
    This goes against what we tend to think of, as most medical providers are seen through your medical insurance. However, simply put, mental health treatment is very different. In the mental health field, most experienced and seasoned therapists simply do not take insurance. This is because they don’t have to (and don’t want to, but this post is focused on the consumer side, so I will not go into specific reasons why providers don’t prefer to take insurance). Logically speaking, experienced and seasoned therapists are specialized and have enough of a following and community reputation that they do not need to acquire patients from insurance mills. New patients are referred to these experienced clinicians by other patients, other medical providers, attorneys, etc. This is not to say that all providers who take insurance are unexperienced, but this is often the case.
  6. Less investment in the counseling process.
    When people pay for therapy out of pocket, they have more emotional buy in and commitment to therapy. Paying with our own money tends to make us work harder and better appreciate the services we are paying for. Plus, therapy is very affordable. Even at a rate of $100 per hour, you could get 30 hours of therapy (which is far more than the average time needed), for less than getting your kid braces, than two months of an average mortgage payment, about the same as some people pay for one big-screen television, WAY cheaper than a divorce, etc.

So what can you do about it? There are options!

1. If possible, pay cash for sessions. This ensures that your records and diagnoses are entirely confidential documents. The content of your session stays entirely between you and your therapist. And your care is dictated by what you think you need, not your insurer. Many people have a Health Savings Account (HSA) or Flexible Savings Account (FSA) that will help them pay for sessions and operates just like cash- but they don’t realize it.

2. If you cannot afford to do that, consider a non-profit. Many areas have nonprofits that offer low fee counseling based on income or other eligibility. That takes a little digging, but often you can find it on google by looking for “low fee” or “affordable” or “nonprofit” counseling. You will likely see less experienced clinicians, but you will maintain control and confidentiality.

3. See if your insurance company will reimburse you for out-of-network services. This will cost you up front, and your diagnosis will be recorded, but it gives you the freedom to choose any licensed clinician and their records are more protected than if you go with an in-network therapist. Contact your insurance company directly to inquire about the out-of-network reimbursement policy specific to your plan. Your therapist will provide you with a statement/invoice, known as a “Superbill”, that you will be able to submit for reimbursement.

 

Therapy, especially when you are paying out-of-pocket, is always an additional expense, in more ways than one. There are travel expenses and the time commitment that it takes to make therapy effective. However, the rewards can greatly outweigh temporary monetary costs. How much is too much to pay for peace of mind, the renewal of a relationship, or finally finding freedom in an area of life that has previously seemed unattainable? $500? $1000? $5000? Some people would pay ten times that to experience the real progress and change that can happen in therapy. What is the change you are seeking worth to you?

About Christine Reber

Christine Reber, LMHC, CASAC is a Licensed Mental Health Counselor and Credentialed Alcoholism and Substance Abuse Counselor practicing in Buffalo, NY. She has a special passion for working with social anxiety and highly sensitive introverts and has extensive clinical experience treating alcohol and other substance use disorders.

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