Navigating the Financial Investment of Mental Health Care: Insurance vs. Self-Pay

It is no secret that therapy/counseling is an investment of your time and your money, both of which are finite resources.  When you start to research therapists in your area, you are going to quickly find that there are two primary options for paying for therapeutic services- utilizing insurance or being a self-pay client.  Both of these options have their own set of advantages and drawbacks, and understanding the nuanced differences between these options is crucial in making an informed decision that aligns with your unique needs and preferences. 

Full transparency up front: I am a certified perinatal mental health therapist in Central Ohio and I am in network with many of the major insurance companies (at least as of writing this).  I have taken insurance for all six years I have been in private practice and have had an overwhelmingly positive experience during that time, so I am definitely not anti-insurance…though I have begun to question what my ongoing network participation may look like into the future. I am also a provider that believes that the relationship between a client and therapist is perhaps the single most impactful factor in determining treatment success, and research backs this up as well.  For this reason (and due to financial privilege that is imperative to call out), I have always been a self-pay client for my own therapy services—because the providers who felt like the best fit for me, had the trainings that I was looking for and were able to build an impactful relationship with an unintentionally difficult therapist client (it’s me, hi, I’m the problem it’s me) happened to be self-pay providers.  I see both sides and all the shades of gray, so I hope this feels like a fair assessment of your options and not a sales pitch! 

So, should you be limiting your therapist search criteria to just in-network providers or not? Below are some things to consider.

Utilizing Your Insurance Benefits

I’m only the messenger here, but it’s VERY important that we start any discussion about insurance by first making it abundantly clear that just because you have insurance and just because that insurance told you they cover therapy, does NOT mean your sessions are free and in some cases, doesn’t even guarantee the type of services you are seeking are covered.  (It’s not that insurance companies lie, it is just that you have to know the *right* questions to ask to get the full picture.)  In fact, as corporations continue to move towards providing high-deductible plans for their employees, it is much more common to have an insurance-based client who is paying around $105ish out-of-pocket a session than not (at least in Ohio).  Again, I am just the messenger and also the holder of a high deductible insurance policy that often infuriates me…so trust me, I get it!

Secondly (and the part that I am even guilty of sometimes glossing over as a primarily insurance-based practice), in order to use your insurance benefits, a provider MUST bill under a medically necessary diagnosis and be providing a medically necessary treatment.  You might be like “yeah, of course that makes sense,” however in the land of mental health treatment which insurance companies theorize under the scaffolding of the incredibly outdated medical model, it means that something like seeing a provider for general emotional well-being isn’t actually something insurance is going to cover or reimburse.  And I will be the first in line to say that that is complete bullshit because there are mountains of research to support preventative care vs. reactionary care in the world of mental health (just like in physical health)…but they aren’t asking me for my opinion.  Additionally, even diagnoses that are considered by some to be more “attainable” in terms their diagnostic criteria (something like Adjustment Disorders for example) come with rigid timeframes with which they fall under the umbrella of medical necessity.  It’s unfortunate how many clients who have been utilizing insurance for YEARS of therapy prior to starting services with me, sit on my couch and tell me that they don’t have a diagnosis, that they were just in therapy to “work through some stuff.”  And while that may be true, their medical file most definitely has a diagnosis code that was submitted with those claims if insurance was picking up some of the tab or reducing the cost.  (Also, your diagnosis isn’t supposed to be a secret…ask your therapist if you aren’t sure what it is!)

 Pros:

1)    Financial Assistance

• One of the most significant advantages (or perceived advantages) of utilizing insurance is the potential financial assistance it provides.  Insurance coverage *can* significantly reduce out-of-pocket expenses associated with therapy, making it somewhat more accessible for individuals who might otherwise find it cost prohibitive.  For example, my contracted rate with most insurance companies is between $105-$120 a session and my self-pay rate is $150…so with a high deductible plan, a client is still “saving” between $30-$45 a session by utilizing insurance for sessions with me.  This cost savings is even more evident if you have a plan that only requires a $25 copay for services (but again, I remind you that these types of plans are rare.)   

2)    Large Network of Providers

• Most insurance plans have a broad network of mental health professionals, which can be advantageous especially for those living in rural areas or facing specific therapeutic needs, as this increases their likelihood of finding an affordable provider in their network. 

3)    Consistent Support

• Insurance plans typically offer consistent support, with regular sessions covered up to a certain limit that varies by plan.  This can provide a sense of stability for clients, knowing that they have ongoing financial support for their mental health needs.  (Important to note that generally in the United States, health insurance coverage is tied to employment, so consistency of support is directly tied to consistency of your employment.)   

Cons:

1)    Privacy Concerns

• At some point in the future, if I shift to being a self-pay provider, it will be partly because I believe in protecting the privacy of my clients (more specifically because I regularly work with women in the reproductive phase of their lives, and bodily autonomy continues to be a contentious topic where ethical treatment and legal requirements are becoming less congruent). 

  I take seriously the idea of confidentiality and billing insurance requires that I submit a billable medical diagnosis with every claim that meets the medical necessity requirements for that particular insurance company, and at times can require me to submit my clinical notes to justify care.  I did not know this prior to becoming a private practice therapist who also wears the hat of insurance biller for my business, but the simple act of handing over your insurance card means that you’ve given the insurance company tacit consent to ALL of your business.  In fact, one time during a utilization review, I requested to speak with my client prior to giving the insurance company the information they requested and I was met with a very direct and cold response that my client had already given that consent and if I didn’t want my claims clawed back, that I should answer their questions.  (For the record, I 100% hung up on that insurance representative, called my client, informed them of what was going on and discussed the scope of the information I would be disclosing.)

  And I can already hear some of you screaming, “HIPAA doesn’t let you do that,” but my friends, there is an exception to HIPAA protections for the payment of services.  So…I will gladly decline an insurance companies request (which is really a demand) for your records, as long as you’re willing to pay out of your pocket for every penny the insurance company claws back for what they will then say were non-covered services.  And that is how they put both me as a provider and you as a consumer in a double bind.   

2)    Insurance As The Third Party In Your Treatment

• It doesn’t happen often, but it has happened where a licensed provider employed by an insurance company requests specific details about a client, their background, their treatment goals, their treatment progress, justification for their diagnosis and then (without ever meeting or speaking to the client) tells me that I am no longer authorized for weekly sessions.  Sometimes this person will also argue with you about your clinical impression and diagnostic skills, again without ever speaking to the client you’ve inevitably spent HOURS with at this point.  Sometimes it’s an unlicensed employee looking through your records and matching them to a checklist.  And very rarely, it is a gem of a human who will tell you how great of a job you’re doing and to keep it up (it only happened once, but I almost asked her to repeat herself so I could record it)!

3)    Limited Choice of Therapists

• Listen, not all therapists take insurance.  Not all therapists are in network with all insurance companies.  Not all therapists provide services that insurance covers (think intensive formats, treatment targeting general well-being vs. a medical diagnosis, couples therapy where the focus is the relationship and not the mental health diagnosis of one of the participants).  This limitation can be challenging for individuals seeking a specific therapeutic approach or particular therapist as their options may be restricted.

Self-Pay Therapy

Pros:

1)    Choice of Therapist

• As mentioned at the beginning, I am a therapist who thinks that the relationship between a client and therapist is CRUCIAL to treatment success. Opting to be a self-pay client provides you the flexibility to choose any therapist, regardless of whether they contract with insurance companies or not.  This freedom allows you to select a therapist based on their specific expertise, approach, availability and personal compatibility.  For example, most therapists are trained on the basics, but I have over 100 continuing education hours specific to perinatal and maternal mental health which means my approach and knowledge base is different than someone who primarily works with anxious kids.  We can both be excellent therapists, but I would be CLUELESS on what to do with an anxious 6-year-old in my office because I’d be reaching back to concepts from graduate school that I have never actually applied in real life.  Make sense?

2)    Enhanced Privacy

• Removing insurance from the equation also removes the need for an official diagnosis.  You can seek care for general well-being or to discuss sub-clinical concerns.  Your therapy sessions and associated information remain confidential between you and your therapist.  From the provider side, documentation for an insurance company also looks very different than what I am legally and ethically required to keep per the State of Ohio’s Revised Code.  For these reasons, self-pay can be particularly appealing for those who want to prioritize privacy in their mental health journey.  (Important call out here: I don’t believe we should stigmatize mental health diagnoses, but I also don’t get to make all the rules and would be lying if I told you that the stigma wasn’t still alive and well. It is very true that there are times where a documented metal health diagnosis can work against you—filing for life insurance coverage, some career choices (military, aviation)—and it is important to be mindful of that.)

3)    Flexibility in Session Frequency and Duration

• Without the restraint of insurance limitations, self-pay clients have more flexibility in determining the frequency and duration of their therapy sessions.  Want 90-minute sessions because you feel like the session always wraps up right when it’s getting good?  Want to meet twice a week to prepare for spending time with your family over the holidays so you make sure you deck the halls and not your in-laws?  Want to do some intensive work and spend 4 (or more) hours doing EMDR to truly tap that shit out?  When you remove insurance from the equation, almost anything becomes possible! 

Cons:

1)    Financial Responsibility

• Clearly the most obvious drawback here is that it’s your card that is getting charged for each appointment at the rate that your provider has outlined in their informed consent.  Sure, you can use HSA funds if you have them, but you are 100% responsible for the full fee of the session.  While we can s give generalized responses to length and frequency of anticipated treatment, we don’t have crystal balls, so sometimes it can be hard to predict the full investment from the start and costs can accumulate quickly.  (And there may only be one con, but it is obviously one that carries a lot of weight.)  

Conclusion:

There’s no right or wrong answer here and deciding how you pay for therapy is a personal choice that depends on your individual circumstances, preferences and priorities.  I hope that having a better understanding of the pros and cons of each choice empowers you to make informed decisions that align with your financial resources, therapeutic needs and privacy concerns.  And most importantly, I hope you finish reading this with an increased awareness of how insurance works and an understanding that with the prevalence of high deductible insurance plans being offered by most employers, a self-pay therapist might not actually cost you that much more out of pocket than an insurance-based provider!  Perhaps the best therapist for you is more accessible than you think!