Private Pay vs Insurance

Deciding to start individual therapy is a gigantic step. You’ve made the decision to take care of and invest in yourself. Therapy is a huge investment of time and resources, and it can have wonderful payoffs.

But let’s talk about the unpleasant elephant in the room: money. It’s an uncomfortable subject, but it doesn’t have to be. It’s an important issue to consider, because you are investing a significant amount of time and resources. When people think about how to pay for therapy, two thoughts come to mind: insurance and paying out of pocket.

I have insurance - why wouldn’t I use it?

It’s a valid question! You’re paying a premium every month, why shouldn’t you get the benefits? You use your insurance for your other medical providers, right?

Most insurance companies have some sort of coverage for mental health, with a network of qualified and talented therapists. Getting matched with one can be as simple as calling your insurance company and getting a couple of referrals. You can also search almost any of the online therapist directories and find someone who takes your insurance. The amount you owe per session depends on your particular plan – it can range from nothing to the full cost of the session, if you have a high deductible plan.

So why would someone with insurance choose to pay out of pocket?

Here are a few reasons why you might not want to use insurance to pay for therapy:


What you say in therapy is confidential - your therapist is legally required to keep everything you talk about confidential, right?

If you use insurance - not exactly. When you use your insurance, you consent to allow your insurance company permission to request and view any notes in your therapist’s possession. The insurance company may also withhold payment from your therapist until documentation is provided - treatment notes or possibly your entire treatment record. And once that information is sent to your insurance company, your therapist has no control over who sees it, or what happens to it.

If this comes as a surprise to you, you’re not alone!

Insurance requires a diagnosis

Sometimes talking with a therapist while you’re going through a brief rough spot in your life can be incredibly helpful. Maybe work or school feels overwhelming, or maybe you’re having conflict with a parent or a partner. Sometimes all it means is that you’re struggling temporarily, and you need a little help to get through it. Your insurance should pay for that, right?

Believe it or not - wrong! Insurance will not pay for treatment without a diagnosis. Therefore, you must be diagnosed with a mental illness in order to receive benefits. So if you don’t meet diagnostic criteria for a mental disorder, either your insurance will not pay for your sessions, or your therapist would have to force your complaints into a diagnostic category, which is not ethical or legal - and would, in fact, be considered insurance fraud.

Mental health becomes a permanent part of your health record

This may not seem like a big deal at first glance, later on down the line it might be.

When you apply for insurance in the future, you will now have a pre-existing condition. Life and disability insurance rates may be higher, or coverage may be denied altogether. It is unclear if pre-existing conditions would affect future health insurance rates or coverage, but in the not so distant past pre-existing conditions DID affect health insurance coverage.

If you one day apply for a job that requires a specific security clearance level, the employer may ask for access to all of your treatment records, including mental health treatment.

Insurance companies determine your treatment

Insurance companies can determine that treatment is not “medically necessary,” regardless of what your psychologist says. At any time they can request a treatment review, and may withhold payment if they do not believe the treatment is justified.

Who determines what is “justified?” Good question! Usually it is reported to be a board of individuals with training in behavioral health - but the level of training is unclear. Someone with a bachelor’s degree in psychology might be deciding that your licensed, doctoral-level psychologist is providing unnecessary treatment!

Sound unfair? It is, but these are the rules that insurance plays by!

Longer wait times

This is an unfortunate side effect of the problems psychologists have had in working with insurance. As fewer psychologists take insurance, the ones who do often have full schedules, and may have wait lists that are weeks to months long.


Of course, if your finances are such that using your insurance is the only way you are able to access need treatment – then by all means, do it! For many people, using insurance IS the answer.

If your co-pay or deductible is too high, contact a community mental health center or a university training center, where sessions are often discounted. Open Path Collective is a group that allows therapists to offer online appointments on a sliding scale.

Getting needed treatment is always a priority!

For these reasons, I choose to only accept private pay.

I want the only people involved in the care of my clients to be myself and my clients. If you’d like to work with me, reach out today.