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Your Guide to Paying for Therapy

Kelsey Tyler

In an ideal world, paying for healthcare would be a straightforward process. In real life, it can be pretty confusing. This can be especially true for therapy, because going out-of-network for mental healthcare is very common. Patients are much more likely to see therapists who don’t take their insurance (or any insurance) than primary care physicians or ob-gyns who don’t. If you’re not sure when, or whether, seeing an out-of-network therapist makes sense, we’ve got you covered. 

This guide to paying for therapy tells you what you need to know to find a provider who fits your budget and treatment needs, whether you plan to use insurance or pay out of pocket (or you haven’t gotten that far yet).

What are your options for paying for therapy?

Depending on who you see and what your insurance situation is, there are several ways to pay:

  • Insurance for in-network care: Your insurance pays for at least part of your therapy if you see an in-network provider. Depending on the type insurance you have, your plan might cover the full cost of care or require you to chip in. Check your plan’s summary of benefits, which should explain your cost-sharing responsibilities
  • Insurance for out-of-network care: Your insurance covers an agreed-upon amount (usually a percentage of the therapist’s fee) when you see an out-of-network provider. Usually, you pay the bill up front and then insurance reimburses you after your visit.
  • Out of pocket: If you see a therapist who’s out-of-network, and your insurance plan doesn’t offer out-of-network coverage, you’ll pay for care out of pocket. (You’ll also have to pay out of pocket if a therapist doesn’t take insurance.) A therapist might charge you their full rate, or they might offer you an adjusted,  sliding scale rate. You can pay with funds from your bank account or, if you have  one, a pre-tax healthcare account, such as an FSA or HSA.
  • Employee assistance programs: Your employer agrees to pay for a certain number of therapy sessions, usually for a short-term issue, such as work-related anxiety, rather than a pre-existing condition requiring long-term treatment, such as generalized anxiety disorder or clinical depression. 

Do most insurance plans cover therapy?

The short answer: Yes, most private and government-funded insurance plans include some coverage for therapy. 

That’s partially thanks to the 2008 Mental Health Parity and Addiction Act, which requires insurance providers to cover mental health and physical health equally. In general, mental parity laws make it illegal for insurers to offer better coverage for, say, allergy shots or surgery than for psychotherapy sessions or a substance use disorder program. Subsequent federal laws have expanded and strengthened the original 2008 Act, and many states have additional laws pertaining to mental health coverage. (Remember, outpatient therapy is just one type of mental health service.)  

If you have private (commercial) insurance:

Most private plans, including employer-based plans and individual plans purchased through the insurance exchange (aka Obamacare), are subject to mental health parity rules. The main exception are non-qualified short-term plans. Some people purchase these skimpy plans instead of Obamacare plans because they tend to be cheaper, but they aren’t required to cover mental health services. Some do, some don’t — don’t sign up for a non-qualified plan without checking its coverage offerings first. 

If you don’t have a non-qualified plan, you can expect to have mental health coverage. The amount you and your insurer each pay depends on the plan design, according to D’Ann Whitehead, Leader of Mercer’s Total Health Management Specialty Practice in the West market and a former clinical psychologist. In general, HMO plans have lower monthly premiums and out-of-pocket costs for both physical and mental healthcare. PPOs, on the other hand, usually have higher monthly premiums but allow patients to see both in- and out-of-network providers.

If your plan has a deductible (most do), you may have to pay for therapy out-of-pocket until you reach your deductible. At that point, your coverage kicks in and you’d only be responsible for your copay and/or coinsurance, depending on how cost-sharing works for your plan. 

If you don’t have private insurance:

  • All state Medicaid programs provide some coverage for mental health services including outpatient therapy, but precise coverage policies vary by state and plan. The rules can get confusing here, because not all Medicaid plans are subject to the mental health parity laws mentioned earlier. 
  • Medicare covers an array of mental health services. Part B specifically covers outpatient therapy.
  • CHIP (Children’s Health Insurance Program), Tricare and VA Health Care all cover outpatient therapy.

When does it make sense to see an out-of-network therapist?

If you have insurance, it usually makes more sense to choose an in-network clinician if you have the option. Although, if you have a high-deductible health plan and don’t anticipate having significant healthcare expenses aside from therapy for the remainder of the year, staying in-network might not matter that much, financially speaking. To figure out if staying in-network will save you money, ask for a therapist’s rate and calculate the number of sessions you’d have to pay for out of pocket before meeting your deductible. If you’d meet it fairly early in the year, an in-network provider might still make more sense.

But seeing an out-of-network therapist is relatively common for people with (and without) insurance. “More people are willing to pay out of pocket for mental health services, but we’d never think of paying a surgeon or even a primary care provider out of pocket,” says Whitehead. 

There are a few reasons:  

In-network therapists aren’t always available. In some areas, typically rural parts of the country, mental healthcare providers are in very short supply. Even in areas where mental healthcare providers are more abundant, like New York City, therapists are much more likely than providers in other specialties not to accept insurance. Abby Gagerman, LCSW, a therapist in Chicago, says many experienced or highly specialized clinicians opt not to take insurance, or not to accept plans from certain carriers, because they can usually earn more money that way.

People may also go out-of-network to see therapists with niche expertise in specific conditions, populations or therapeutic techniques, says Randee Silberfeld, president of Psychiatric Billing Associates

And, sometimes, Gageermeen says, out-of-network providers can offer more individualized care because they’re not accountable to insurance carriers. For example, Gagerman says one clinic in her area treats clients in unconventional ways, such as with a quick phone call during a panic attack or by meeting at a shopping center to help manage agoraphobia. “It’s hard to code these types of things properly, because most insurers want you to file for a 50-minute session,” Gagerman says. “So not accepting insurance might allow providers to be more flexible to do what’s best for the client.”

Grace Dowd, a licensed social worker based in Austin, Texas, says some patients also opt for private pay (also called self-pay) because billing insurance requires a formal diagnosis. If you don’t want a diagnostic code on your medical record, you could tell a therapist you’d rather not use your health insurance for payment.

What does that mean for you? Well, you need to consider your financial situation and therapeutic needs and weigh the options available to you. 

Does the issue you’re seeking therapy for typically require a long- or short-term course of treatment? Is your issue considered especially difficult to treat? If so, have any evidence-based treatments shown to be effective, and do they require specialized or extensive training? 

“If you have a really difficult mental health problem [and an] in-network therapist isn’t helping, and you can afford to see someone with a stellar reputation for treating that problem, then it makes sense to pay out of pocket,” Gagerman says. In some cases, a few sessions with a high-priced, super-specialized therapist might be cost-effective in the long run if your condition improves faster.

What’s the difference between an out-of-network therapist and one who doesn’t take insurance at all?

An out-of-network therapist is one who isn’t in-network with your insurance plan. A therapist who doesn’t accept insurance isn’t in-network with any insurance plan. For your purposes, they’re the same thing. If you have out-of-network coverage, you can seek reimbursement from your insurer to see a therapist who isn’t in-network, regardless of whether or not they’re in-network for other plans. If you don’t have out-of-network coverage, your insurer won’t help pay for therapy unless you see an in-network provider. 

How do you get reimbursed for out-of-network therapy?

If you want to see an out-of-network provider, check to see what sort of out-of-network coverage (if any) your insurance plan offers. You can find this information by reading your plan’s summary of benefits or calling the number on the back of your insurance card. 

If you do have out-of-network coverage, Silberfeld says the next step is to look at your deductible and cost-sharing requirements. A $1,500 out-of-network deductible, for example, means you have to pay for $1,500 of healthcare before coverage kicks in. A 30 percent coinsurance requirement means that, once you reach your deductible, your plan still requires you to pay 30 percent of the bill.

Keep in mind: Out-of-network coverage is usually a percentage of the insurance company’s “allowed amount,” not the clinician’s actual charges. Let’s say your therapist charges $200 a session. If your coinsurance is 40 percent  and your plan’s allowed amount per session is $175, then your plan would cover 60 percent of $175, not the full $200 rate.

Unlike with in-network care, you’re responsible to pay bills up front for out-of-network care. Then, you submit reimbursement claims to your insurance plan to recoup payment. Getting reimbursed can take patience, not to mention work, on your end. 

To approve your claim for reimbursement, insurance companies require records from your visits, usually on itemized receipts called “superbills.” Sometimes, therapists will submit the superbill to your insurance on your behalf; in other cases, providers ask patients to submit. If that’s the case, contact your insurance company to request a claim form, which you’ll need to fill out and submit with your superbill. Depending on your insurance, you can do this either online or by mail.

At some point — it could be weeks or months — you’ll get either a check in the mail or an electronic payment from your insurance provider. The good news is that if you have out-of-network benefits, Silberfeld says you can usually apply those costs to your out-of-network deductible. Sometimes, according to Silberfeld, out-of-network benefits only cover certain types of therapy and mental health procedures, so make sure to check with your provider to avoid surprises. 

If you don’t have enough money in your bank account to pay your therapist up front, you have a few options.

  • If you have a high-deductible health plan, the best option is to use your HSA account, according to Silberfeld. Your care will ultimately cost less if you pay for it with pre-tax income. 
  • You can also inquire about a sliding scale, or if your therapist allows it, use a credit card and pay off the bill once you receive your reimbursement. 

Can you see an out-of-network provider without out-of-network coverage?

Yes, but your insurance plan won’t help foot the bill. There are a few ways to pay.

The first, and most obvious option, is to pay the provider’s full rate out of pocket (meaning straight from your bank account or by credit card, if they accept it).

Another possible option is to check with your employer about additional out-of-network benefits. Whitehead says some employers offer EAPs, or employee assistance programs, which cove the full cost of therapy for employees. The caveat is there’s a cap on how many therapy sessions the employer will pay for — usually, Whitehead says, between three and 12 — so EAPs are more helpful if you’re being  treated for situational stress, like grief, rather than an issue that requires ongoing treatment, such as chronic depression.

If you have a high-deductible health plan: If you don’t have an HSA already, and you’re going to spend a lot on therapy without being reimbursed, Silberfeld suggests setting up a health savings account (HSA) for tax advantages. When you sign up for insurance, you choose how much of your paycheck to put into an HSA. You can add more after the fact. Those funds won’t be pre-tax, but they will be tax-deductible when you file your return. “An HSA will help you to deduct the therapist bills with pre-tax income, which brings down the cost,” Silberfeld says.

Finally, if you really want to see an out-of-network therapist but just can’t afford it, ask about a sliding scale.

How do sliding scales work, and are they common?

Whether you don’t have insurance, or you want to see a provider who doesn’t take insurance, or you want to see one who’s out-of-network and your plan doesn’t cover it. Aside from paying a therapist’s full rate out of pocket, what are your options?

It’s relatively common for providers, especially those who don’t take insurance or are trying to build their client base, to accept a certain number of clients on a sliding scale basis, Gagerman says.

Ask your current or potential therapist if they’re open to a pay-what-you-can patient. Usually, according to Gagerman, a therapist won’t verify your income, and there’s no formula to pinpoint exactly how much you can or should pay. Just be honest about what you can afford.

In some cases, what you can reasonably pay might not work for your provider. If they can’t accept another sliding scale patient — currently, Gagerman has three, and she says she doesn’t have space for another one — they might refer you to someone who does. “Every therapist has their rules about how many they take and how low they are willing to go,” she says. “But it’s definitely worth asking.”

Are there any other ways to pay for therapy?

No sliding scale? Don’t give up yet. Whitehead suggests looking into direct-to-consumer therapy options, like TalkSpace, which may be cheaper than a therapist in private practice. And Gagerman says if you have Medicaid or Medicare, or you’re uninsured, community mental health centers (as opposed to private practice clinicians or private clinics) are the most cost-effective option. Google your county’s mental health community clinic and inquire about therapy openings.

Organizations like Open Path Collective and Inclusive Therapists also aggregate therapists who are willing to charge less for their services. If you’re a person of color or part of a marginalized community, there are a number of resources for mental healthcare. For example, The Loveland Foundation has a therapy fund that provides financial assistance to Black women, and the Boris Lawrence Henson Foundation has been providing up to five sessions of free teletherapy to BIPOC during the COVID-19 pandemic.

Does insurance cap the number of allowed sessions?

For the most part, no, thanks to mental health parity laws. According to Silberfeld, your insurance provider might reach out to your therapist if they question insurance claims. After 20 sessions, for instance, your insurer would review your records to evaluate the necessity of further care. But if your therapist thinks you need support, you should be able to keep going. 

The only exception to the rule is if you’re using your employer’s employee assistance program, in which case it’s a good idea to check beforehand how many sessions you’re allowed so you’re not surprised — unless you’re willing to pick up the bill after your allotted number of sessions are up. 

Are telehealth sessions covered the same way as in-person sessions?

Historically, no. But as of the COVID-19 pandemic, Silberfeld says it’s becoming more and more common for public and private insurance providers to accommodate, or even fully pay for, video or phone therapy sessions. One reason is that seeing a therapist remotely lowers your risk of getting sick, which also decreases the likelihood your insurer will have to pay for costly medical care. 

These days, thanks to emergency laws passed during the pandemic, you may even be able to virtually see an out-of-state clinician. But that depends on a number of factors, including your insurance, and whether or not that therapist is licensed in your state of residence. (Because of the pandemic, many states are relaxing licensure laws, so it’s worth checking with a therapist you’re interested in seeing.)

How does coverage for couples’ therapy work?

As for in-network and out-of-network rules, all the same principles apply for seeing a couples therapist. There’s one difference: In order to bill insurance, a therapist has to diagnose a patient, then submit the claims with a corresponding diagnosis code. But there aren’t medical diagnoses for couples. So Silberfeld says a couples therapist technically needs to diagnose one person — usually the primary insurance holder. If you’re uncomfortable with a formal diagnosis, you can still see the therapist; you’ll just need to pay their couples rate out of pocket.

Where do psychiatrists fit in? 

There are numerous types of mental health professionals. Several of them, including psychologists and licensed clinical social workers, commonly furnish therapy. Psychiatrists are medical doctors, and their primary expertise is in diagnosing and prescribing medication for mental health conditions. Psychiatrists do receive training in psychotherapy and some administer it themselves. But they’re much more likely to see patients for consultations and medication management visits, and then refer them to other types of providers for therapy. (For a more detailed explanation of different types of therapists, read this primer.) 

A psychiatrist appointment is considered outpatient mental health treatment, and mental health parity rules apply. But as with therapists, it’s common for psychiatrists not to accept insurance (often because they find in-network reimbursement rates too low). In fact, Silberfeld says, it’s now generally easier to find in-network therapists than psychiatrists — and psychiatrists who do take insurance typically don’t offer therapy. Paying to see psychiatrists who are out-of-network or don’t take insurance works the same way as it does for therapists.

It’s common to see a psychiatrist for medication management and a therapist for behavioral therapy. If you’re looking for a provider who does both, and is more likely to accept insurance, Silberfeld suggests considering a psychiatric NP (nurse practitioner). 

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