When you’re thinking about starting therapy, it’s normal to have a lot of questions: What style of therapy is right for me? How do I choose a therapist? Do therapists take insurance?

Deciding to start therapy is a huge milestone in life. I’d even say it’s as big as getting married or starting a new job. I mean, think about it. What could be more important than committing to work on yourself and become the best version of yourself?

Unfortunately, finding a therapist can be challenging, especially if you’re looking for therapists that accept insurance. The demand for therapy is at an all-time high, and therapists nationwide are reporting long wait lists.

According to a 2023 survey by the American Psychological Association (APA), more than half of therapists said they had no openings for new patients. More than two-thirds of psychologists who had a waitlist said the average wait was up to three months for a first appointment. The other third said their wait times were longer than three months.

If you’re looking for a therapist who accepts insurance, your wait could be even longer. The truth is, there are many qualified therapists don’t take insurance – and just as many reasons why they don’t. Keep reading to learn more about why therapists don’t take insurance (and why that might actually be a good thing).

Understanding How Insurance Covers Therapy

Whether your insurance covers mental health services – and how it covers it – depends on your individual policy. 

Some insurance plans cover a set number of therapy visits per month or per year. Others only cover services once you have an official mental health diagnosis, such as obsessive-compulsive disorder or depression.

The need for a diagnosis is particularly common within the insurance industry and is a big part of why it can be hard to find a couples therapist who takes insurance or find a therapist if you just want someone to talk through life’s challenges with and have not been diagnosed with any specific mental illness.

This is also one of the reasons many therapists don’t take insurance – there is simply too much red tape to give clients the care they truly need. So how do therapists get paid?

Private Pay vs Insurance Pay Therapy

When therapists don’t accept insurance, they are typically referred to as a private pay practice. Private pay therapy refers to a payment arrangement where individuals pay for therapy services out of pocket, without involving an insurance company. While this means a higher cost for the client, it also provides more flexibility than insurance-paid therapy.

Understanding Out-of-Network Benefits

Even if your insurance does not cover mental health services, you may be able to get some financial assistance for your care through out-of-network benefits. PPO insurance plans typically include out-of-network benefits that help pay for care you get from providers who don’t accept insurance. 

In this scenario, your therapist can provide you with a detailed receipt called a “superbill,” which you can submit to your insurance for reimbursement. Out-of-network benefits typically don’t cover these services in full, but can cover as much as 60-80% of your costs (depending on your plan).

So, Do Therapists Take Insurance?

New therapy seekers with this belief are often confused and frustrated by the number of therapists they find that do not accept insurance. It can be really difficult to find someone who specializes in your area of need, is close to home, fits your personality, and accepts your insurance.

This can be discouraging. After all, you’re paying a premium every month for your insurance so why wouldn’t you want to use it? It can save you money on your session costs and it can help you narrow down your search by ruling out therapists who don’t accept your plan. You use your insurance for all other doctors so why not do the same for therapy, right?

So why is it so hard? Why don’t therapists take insurance? 

Many consumers don’t realize that there are several downsides for both therapists and clients when using insurance to pay for therapy.

So what do private pay clients who are shelling out big bucks for therapy know that you don’t? Let’s dig deeper into the question, “do therapists take insurance?” and figure out why many don’t.

Two women sit in an office talking about do therapists take insurance

Here are 5 reasons why you should not use insurance to pay for therapy:

1. Less Confidentiality

Everyone knows that what happens in therapy stays in therapy. Your therapist is required to keep everything you say confidential no matter what, right? 

Wrong! When you use insurance to pay for therapy, your therapist is required to provide your diagnosis and treatment notes to your insurance company in order to get paid. This undermines the basic premise of therapy and also gives a lot more people access to private health information about you. 

If this is news to you, you’re not alone. It’s all written into the HIPAA document you get when you start therapy (or go to any doctor’s office) but most people don’t read all the fine print.

2. Higher Insurance Premiums

Even if you’re okay with your information being shared with your insurance company from a confidentiality standpoint, you probably didn’t realize that sharing this information can have unintended consequences in the future.

As mentioned above, your therapist has to provide your insurance company with your diagnosis to get paid. But what if you don’t have a mental illness? After all, many people seek therapy for personal growth and exploration, not because they are depressed or anxious or have a serious mental illness.

In the eyes of your insurance company, these are not valid reasons for seeking therapy on their dime. If you don’t have an actual diagnosis, they aren’t interested in paying for your sessions and will not continue to authorize future sessions.

This puts your therapist in an awkward and ethically challenging position if you don’t meet the criteria for a mental illness. 

How do therapists get paid by insurance? 

If you don’t have a diagnosis, he or she is left with choosing between 3 options.

  1.  Assign a diagnosis you don’t meet the criteria for so that your insurance company will continue authorizing sessions.
  2.  Discontinue therapy.
  3.  Continue to work with you without assigning a diagnosis but risk having claims denied and not getting paid for the work.
A man and woman sit and talk to a therapist after answering the question, "do therapists take insurance"

At this point, you are probably starting to understand why so many therapists don’t accept insurance.

Ok, so you might be wondering how this all relates to increased premiums for you.

Let’s say your therapist opts for option 1 and assigns you a diagnosis so that your insurance company will authorize future sessions. Maybe you meet criteria for a diagnosis, maybe you don’t. Either way, you now have a diagnosis on record with your insurance company.

When it comes time to renew your insurance or switch plans, your premiums could rise as a result of your “pre-existing condition.” In addition, you may be required to share your diagnosis in future job interviews, which is awkward, to say the least. I would like to add that it’s rare to have to disclose something like that for a job but it can happen in security, government, and some other professions.

3. Insurance-Driven Treatment Plan

When therapists take insurance, they are required to use treatment methods that are covered by your plan. This means they have less say in how to treat you based on your specific and individual needs. 

Ironically, the people who work in your insurance company and decide which methods of therapy can be used, are usually not even therapists! And they certainly haven’t met and assessed you personally like your therapist has.

4. Supply and Demand Imbalance

Remember the high demand for therapists we talked about earlier? The one that has led to many therapists having months-long waiting lists? This is actually another reason many therapists don’t accept insurance.

Because demand for therapy is so high, many mental health workers (especially highly sought-after providers) don’t have to accept insurance because they already have too many patients interested in their services.

While accepting insurance for psychological services would open up their services to more patients, these in-demand providers don’t have space for more in their practice anyway!

So what does this mean for you as a client? While it’s not always the case, finding a provider who accepts insurance could mean they are new or their practice is not in high demand…which leads us to our next point.

5. Questionable Quality

Do therapists take insurance because they can’t build their practice otherwise? Possibly.

Let me preface this by saying that there are some fantastic therapists who take insurance. Sometimes highly skilled therapists accept insurance clients as a way to “give back” to society and offer high-quality services to those that wouldn’t be able to afford it any other way. 

If you don’t know anything about insurance payouts (and why would you if you’re not a therapist or a doctor?), this last statement probably doesn’t make sense. Bear with me while I help clear that up and give you some rarely discussed insider info from the therapist’s perspective.

The going rate for a great therapist in most major cities is between $150-$350 per session. Most insurance companies pay therapists between $40-$90 per session. This is a fraction of what therapists receive from private pay clients and it requires a lot more paperwork and time to get paid by insurance companies. Submitting insurance claims is time-consuming and confusing as is getting approved to be on insurance panels in the first place. Many therapists have to hire a billing professional to help them manage insurance claims and make sure they actually get paid.

So why do therapists take insurance if they get paid less and have to jump through paperwork hoops to get paid?

The answer is because they have to. Let’s explore this in more detail…

a man's hand writes on a white paper on a black clipboard while answering the question, "do therapists take insurance?"

Do Therapists Take Insurance Because They Have To?

Something that is rarely discussed with consumers is the fact that insurance companies provide a steady flow of referrals to therapists. Let’s take a moment to think about who might need a steady flow of referrals to their practice and would be willing to take a major pay cut for said referrals.

New therapists just starting a private practice. 

Therapists who just graduated usually have some serious student loans to pay off and they need to start making money fast. It can take time to build up a positive reputation in a community so getting referrals from insurance panels (even if it means making significantly less per client) is a great way to get started. 

Often, therapists who opt for this route will start phasing out insurance clients as their reputation grows and they start getting more organic referrals from satisfied customers.

Therapists who don’t want to market themselves.

Sometimes therapists get and stay on insurance panels for the bulk of their career because they prefer the safety of knowing they will always have referrals. Perhaps they don’t know how to market themselves, don’t want to invest in marketing, or are risk-averse and can’t or don’t want to risk having fewer clients when they are getting started as private pay.

Working with insurance long-term is more likely to lead a therapist to burnout because they are doing double the work for half the pay. There is a higher chance that this therapist will be overworked and less passionate about their work as a result.

Therapists in low-income areas. 

If there are very few clients that can pay full price for sessions in the area, therapists in private practice may opt to accept insurance or move to a community where there are more affluent people. For this reason, lower-income communities do not have a lot of therapists in private practice but they do have more government-subsidized community treatment centers where people can get help. 

This is a sad truth about the systemic issues and barriers that limit low- to moderate-income folks when seeking mental health care. If insurance companies paid therapists rates commensurate with the amount they have to spend on their education, many more therapists would opt to be in-network and many more people would have easily affordable therapy.

Therapists who do not have a lot of satisfied customers. 

As a therapist myself, this is a delicate situation for me to discuss and I suspect it will upset some of my colleagues. That said, the ones it offends are probably the ones who fall into this category. Many therapists who accept insurance do so because they are not good enough at what they do to facilitate referrals and command a higher fee.

Yep, I said it.

Satisfied customers talk. They leave positive reviews online. And tell their friends and family how happy they are with their therapist and they refer the people they love. They build their therapist’s practice for them by becoming walking billboards. Their friends and family start to notice positive changes in their personality and ask them what they are doing…and they tell them about their therapist.

Not only do satisfied customers refer to skilled therapists, other professionals do too. Medical doctors hear from their patients that they got great results working with a therapist and they send more patients. Other therapists who get asked by friends and family for referrals, send them to other skilled therapists in the community.

Why Therapists Don’t Take Insurance (And Why You Should Pay Them Anyway)

Therapists who don’t take insurance have to be really good in order to create and maintain a thriving practice. With therapy, you usually get what you pay for and if someone is charging a high fee, it’s usually because they are worth it.

Speaking of that price tag, I know it can feel scary to drop a couple of hundred dollars on a therapy session every week, especially if you don’t have a ton of disposable income. 

So, are therapists worth it?

What I’ve seen in my practice (and in many other settings besides therapy) is that those who pay the full fee and make a substantial investment, are actually more committed to doing the work than those who pay less.

Think about it. If you paid $20 for a meal or $200, would there be a difference in how you treated it? Would you rush through the $200 meal and then throw half of it away if you didn’t feel like eating anymore? I’m guessing not. You would savor that meal and ask to take anything you couldn’t eat home with you to enjoy later.

People who pay more for therapy are literally and figuratively more invested and it shows in their results. They make the most of every session, they do their homework, and they get great results. 

In my opinion, there is nothing worth more than your personal growth. If you take the work seriously, you will see your investment pay off in every area of your life. 

By the way, this is coming from someone who has spent a lot of money on personal growth. I truly feel it’s been worth every penny.

Two women sit and talk in chairs in front of a brick wall, enjoying a therapist session after determining, "do therapists take insurance?"

What to Do When Therapy Doesn’t Take Insurance

Ok, but what if you literally CANNOT afford to pay the full fee but you also want to make sure you get a great therapist? Fortunately, there is sometimes an in-between option.

Depending on your insurance, you may be able to get reimbursed for out-of-network benefits. This can mean savings of up to 20-60%. This is typically available with PPO plans. To find out, call the number on the back of your insurance card and ask how much your plan pays for out-of-network therapists.

Then, if you do have out-of-network benefits, ask your therapist if they can provide a superbill for you to submit to your insurance for reimbursement. You will pay your therapist for the sessions up front. Then, your insurance company will reimburse you for some of the session fees. 

Your therapist will still have to provide a diagnosis on your superbill in order for you to get reimbursed. Not every insurance plan has this benefit but it’s definitely worth a phone call to ask!

The other option is that you can use your health savings account (HSA) or flexible spending account (FSA) to pay for therapy. This allows you to save money because you are paying with pre-tax dollars.

Finding The Right Therapist for You

So there you have it. That is the good, the bad, and the ugly of using your insurance to pay for therapy as I see it.

Still not sure how to find the therapist that is right for you? Consider your mental health needs and your schedule to determine if a specific type of therapy might work best. For example, virtual therapy or couples therapy might be an option.

Do online therapists take insurance?

It depends. Just like in-person therapy work, online therapists have to go through many steps to accept insurance as payment for their services. Finding an online therapist will be unlikely to affect how much you pay for therapy. It can help make it more accessible.

Do couples therapists take insurance?

Some do! Just like individual therapists, there are many couples therapists who accept insurance and many who do not. While it’s very valid for cost to be a factor when choosing a therapist, when it comes to couples therapy the most important thing is to make sure your therapist has experience helping couples through the challenges you and your partner are facing. It’s also important to ensure both you and your partner feel comfortable with the therapist you choose. Not sure whether you truly need couples therapy? Take our healthy relationship quiz!

Explore online therapy with Couples Learn

Still have questions? We’d love to hear from you. You can contact Couples Learn at any time to ask questions or book a free consultation.

Have you used insurance to pay for therapy in the past? If so, how did it go for you? Let us know in the comments on this Facebook post.