Therapy 101: Navigating cost
When we think about taking care of our mental well-being, the financial aspect can often feel like a significant hurdle. In fact, cost is one of the greatest barriers to mental health treatment. While the expense of therapy can make it seem unreachable, know that you very likely have options available to you.
Thanks to initiatives like the Affordable Care Act and ongoing efforts to improve mental health access, there are often pathways to find free or low-cost therapy, particularly if you live in larger cities or near universities that have training clinics. Exploring these avenues can open doors to support without undue financial stress.
Just like knowing how to find a therapist and understanding the therapeutic process, understanding how much you can expect to pay can make the decision to seek support feel less overwhelming. In our last Therapy 101 series, let's dive into the financial landscape of therapy.
Navigating cost
As you think about seeking a therapist, you might wonder: What kind of investment are we looking at? Will my insurance lend a hand? What if a therapist I connect with is 'out-of-network'? And importantly for many: Are there any options that I can realistically afford?
Let's unpack these questions together, because understanding the landscape can make the path to well-being feel a little less daunting and a lot more accessible.
How much can I expect to pay for therapy?
Therapy is an investment in your well-being, and like any investment, you want to have a clear picture of what's involved. As of 2024, the national average cost of therapy was estimated at about $100 to $250 per session. Rates can vary by several factors, including:
Length of session. Standard session length is 50 minutes, though longer sessions that allow for deeper exploration and more comprehensive work will typically cost more.
Insurance. When insurance coverage is involved, the financial impact on you can often be significantly less. Having your therapy costs partially or fully covered by your insurance plan can make accessing care more affordable.
Location. Therapists practicing in metropolitan areas or regions where the cost of living is higher will often need to charge more to make ends meet.
Training. The amount of training a therapist has received will likely influence their fees. For example, a psychologist that holds a PhD may charge more than a mental health counselor whose received a master’s degree.
Specialization. If a therapist has in-depth expertise in a specific area or works with unique or particularly challenging conditions, their fees may also reflect this specialized knowledge and the training required.
Demand: Therapists who have built a strong reputation and are highly sought after may also have higher fees. This often reflects the demand for their particular expertise and the positive outcomes clients have experienced.
As the therapy process requires multiple sessions to be effective, paying the fees above can quickly become unmanageable for many. Let’s take a look into options that help keep therapy affordable, and why it is that some therapists may choose to opt into some low-cost options over others.
Will my insurance cover therapy?
Under the Affordable Care Act, all insurance plans are required to cover mental health care. Additionally, the Mental Health Parity and Addiction Equity Act require that insurance companies provide mental health benefits that are no more restrictive than coverage for other medical conditions. This means individuals with insurance should have some coverage for therapy, though there are some stipulations for this.
For example, to get the most benefit, you will need to find a therapist within your insurance carrier’s network of providers, or an “in-network” therapist. This means that a licensed therapist has opted to go through a process to be included in the insurance company’s network of providers.
To be eligible for coverage, you may also have to meet other criteria, such as qualifying for a “covered” mental health diagnosis, meeting a deductible, or getting a referral for treatment. Some insurance companies will only cover a certain number of sessions or may stipulate what type of modality they will cover, such as Cognitive Behavioral Therapy. Consequently, even people with insurance may opt to pay for their therapy out of pocket.
To get a clear understanding of your insurance coverage for therapy, consider these steps:
Become familiar with your policy: Review your insurance Explanation of Benefits, paying close attention to the sections on mental health or behavioral health benefits. Look for details on co-pays, co-insurance, and deductibles (see graphic below).
Utilize your insurer's online resources: Most insurance companies have websites or member portals where you can search for therapists who are "in-network." These therapists have agreements with your insurance company to provide services at a pre-negotiated rate, often leading to lower out-of-pocket costs for you.
Don't hesitate to call: The member services number on your insurance card is a valuable resource. Call them directly to inquire about your mental health benefits and to double check that the therapist you want to see is covered by your plan.
What does it mean to be an Out-of-Network provider?
When a therapist is considered "out-of-network" (OON) with your insurance, it likely means that they have chosen not to have a direct contract with your insurance company. If you choose to work with an OON therapist, your insurance may still provide some reimbursement (typical OON coverage is 50-80% of the service fee), but the process and your out-of-pocket costs will likely be different.
For example, let’s say you find a therapist that specializes in an area that fits your needs and you really seem to connect with them. When you ask about payment they tell you that they do not accept your insurance but that they can provide a superbill for OON reimbursement. What does this mean?
This simply means that the therapist has likely not chosen to contract with your insurance carrier, but that they can provide you with a type of receipt that includes all of the information you’ll need to file your own claims for OON benefits.
Not all plans offer OON benefits, but let’s say that you read over your policy and find that yours does and that the benefit will cover 60% of the session fee. So, if your therapist’s session fee is $100, you will pay $40 and your insurance will pay $60. Let’s say that reading further, you see that your policy also states that if you see a therapist that is in-network with them, you will only have to pay a $25 co-pay per session.
An additional consideration in this scenario is that in-network therapists are contracted to file your insurance claims for you and then receive their pay directly from the insurance company. This means that you don’t need to do any paperwork and the only cost you need to pay up front (assuming that you have met all of your deductible requirements) is your co-pay or co-insurance.
If you were to choose to see this therapist and go the OON route, you might need to file your claim yourself. This means you would likely need to log into your insurance provider’s portal, submit your super bill and any other required forms for each session. This also means that you would likely need to pay for the entire session fee up front and wait for your insurance company to reimburse you.
There are a few companies that help clients file OON claims on their behalf for a small fee, and some that even pay the costs for the session up front so that you don’t need to wait for reimbursement. You might ask your therapist if they work with any companies that offer this service if you’re interested.
Given all of the above, you’d need to carefully weigh what makes the most sense for your mental health care. You might decide, for example, that it’s worth it to pay more for the OON therapist that you really connect with if you can’t find anyone available in-network that meets your needs. Read on for more considerations on why some therapists choose to opt out from taking insurance.
Why do so many therapists not take insurance?
Continuing from the above example, let’s say you notice that the therapist you want to work with not only doesn’t accept your insurance, but doesn’t accept any insurance. Come to think of it, you’ve seen that a lot in your search. Why is it that some therapists choose to be out-of-network?
This is a hefty decision for any therapist, especially considering that it may reduce access to care for many. One of the first things to note, and that we touched on briefly above, is that insurance companies operate with their own set of guidelines when it comes to mental health support. These guidelines can sometimes feel a bit restrictive, potentially influencing the number of sessions covered, requiring specific diagnoses, or even requiring particular types of therapy.
As therapists, our primary focus is always on what will benefit you and your unique situation. Navigating the insurance company’s rules can be frustrating for therapists who feel that their requirements go too far in dictating a client’s treatment. The truth is, what an insurance company is willing to cover isn't always what therapists (or clients) believe is the most effective or in your best interest.
In addition, every therapist needs to weigh the financial realities of working with insurance. The contracted reimbursement rates that therapists receive from insurance companies is only a modest portion of the rate you see your therapist advertise. Moreover, it’s a flat rate that doesn’t fluctuate based on the therapist’s session fee.
So let’s say on the back end a therapist is contracted with the insurance company at a reimbursement rate of $60 per session. As the client, you’re seeing on the front end that this therapist advertises a rate of $175. Of this $175, the therapist will only receive what is contracted from the insurance company for your sessions. Even if they raise their session fee to $200, they will still only receive $60.
What happens to the rest? It’s a write-off for the therapist. What’s more, these reimbursement rates when set tend not to adjust for inflation, and larger metropolitan areas that have more therapists typically receive smaller reimbursement rates. This makes it very challenging for therapists who live in areas with higher cost of living (i.e., in many large metropolitan areas).
What this means is that therapists who work with insurance may need to see a higher volume of clients to sustain a living. This increased caseload can quickly turn into compassion fatigue and burnout, potentially significantly impacting a therapist's ability to provide quality and ethical care to their clients.
On the face of it, it may look like using insurance is a win-win situation. Unfortunately, the disadvantage to the therapist may trickle down to ultimately affect the client.
Lastly, confidentiality is an important consideration for those who use their insurance for therapy. Insurance companies require a diagnosis to cover services, which means that your diagnosis will be shared with them. Some insurance companies additionally require access to your records to justify medical necessity for treatment. They may also require access to client records when auditing therapists. This can be a deal breaker for many.
So, what does this mean for clients who want to work with a therapist who doesn’t take insurance? Usually, it means paying out of pocket for sessions. While this can be a financial strain, it also means that you have more control over your treatment. You can work with a therapist who specializes in the issues you’re facing, choose the type of therapy you want, have a greater say in how many sessions you have, and can even decline to have an official diagnosis.
Read on for more ways to keep therapy costs more manageable.
How can I find low-cost therapy?
If you don’t have insurance coverage or the therapist you want to work with doesn’t accept your insurance, it’s always a good idea to ask them if they have low-cost options. Some therapists may offer a sliding scale fee or have connections with community resources that can provide more affordable options. It's always okay to have an open conversation with a therapist about their fees and any potential options for making therapy more accessible.
The following are some additional low-cost options:
If you don’t have insurance, you might qualify for coverage through your state's Medicaid program or the Healthcare.gov marketplace. With this coverage, you will likely have access to mental health care through your local non-profit, community care clinics.
Your workplace might offer resources. Check with your employee assistance program or benefits department for potential therapy funding.
Check out other non-profits such as Open Path Collective which offer therapy from interns to more experienced clinicians from a price range of $30 - $70 per session.
Universities in your area could be another avenue. Many have training clinics offering free or reduced-cost therapy services from therapist interns. Interns are always supervised by experienced clinicians. Look for universities that have professional psychology or mental health counseling graduate programs.
Some group therapy practices often have interns who provide therapy at low fees while gaining experience.
Understanding the financial aspects of therapy is a key step in making informed decisions about your mental health care. Just like the therapeutic process itself, the world of insurance and fees can seem complex at first. However, by asking questions, exploring your options, and having open conversations with potential therapists, you can navigate these waters and find a path that aligns with both your needs and your financial circumstances.
