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Are you having trouble finding a therapist who accepts your insurance? You may be wondering why some therapists don’t take insurance in the first place. After all, don’t they want to help all clients, not just those who can afford $150+ per session?
In this blog, we’ll cover the surprising reasons why therapists reject insurance and opt for cash-pay only. Then we’ll discuss some options for getting the affordable therapy you deserve. Let’s get started.
It’s hard for non-therapists to imagine any good reasons to forego insurance. So, why do most therapists not take insurance? Here are 5 surprising and understandable reasons therapists do this:
First off, therapists often get a small fraction of their full fee from insurance companies.
If they charge $150, they might get $50-75. Multiply that by 20-30 clients each week and that’s thousands in lost income each month.
By taking such a massive pay cut, therapists can lose tens of thousands of dollars each year. That’s one great reason for therapists to decline insurance.
Moving on, why do so many therapists not take insurance? Not wanting to wait months for reimbursement is a solid reason.
Insurance companies can drag their feet on paying therapists. They take their time and try to find loopholes and reasons not to pay. Doing so allows them to keep more money.
By taking months to pay, there’s an increasing chance that the therapist will forget, give up, or get distracted.
Next, imagine being paid for work and going on with your life. Then, months or years later, the insurance company contacts you and says “hey, remember that money you spent on groceries and rent? We’re gonna need that back.”
And if you didn’t want to pay, that’s okay. They’ll just reimburse you at a lower rate to make up the difference.
Would you ever feel like your income is secure in this scenario? The unpredictable risk of clawbacks frightens a lot of therapists. That’s why some therapists don’t take insurance.
Fourthly, insurance only covers therapy if you have a diagnosis like Generalized Anxiety Disorder or Major Depressive Disorder. You can only get therapy if you have a negative condition, not if you want to improve your self-esteem, boundaries, relationships, and other things.
This places therapists in a bind. How do they help you get coverage? A significant number of therapists give you a diagnosis on day one so insurance will cover it. But is this ethical? Therapists know that it takes more than one 45-minute session to diagnose a condition. They bend the rules to help you, but can feel guilty for doing so.
And finally, insurance limits therapists in many other ways.
Whether by the number of sessions, the conditions they’re allowed to treat, methods they're allowed to use, and more, insurance keeps therapists in a box. If they step out of that box, therapy will not be covered and you’ll have to foot the bill.
So, you can see why therapists wouldn’t want to use insurance. It hinders their capabilities and doesn’t have a lot of benefits aside from helping them have more clients.
With these top 5 reasons, it’s easy to see why some therapists don’t accept insurance.
But that’s not all! Here are 5 more reasons why a therapist would cut insurance panels out of their life for good:
The amount of non-paid time required to sit on hold with insurance is outrageous. Once you reach someone, therapists still have to sort out whatever issues come up with the claim. The time spent can be anywhere from 1-5 hours per claim.
Because therapy reimbursement is low, many paneled therapists take on more clients. That means it’s a hamster wheel of getting low pay, working more to make up for it, and spending even more time on the phone.
Better to skip it altogether.
Frustratingly, therapists can only provide therapy if you have a diagnosis.
If you want to talk to someone about personal growth, relationships, a quarter-life crisis, self-esteem, boundaries, and more, tough luck.
To be covered by insurance, therapy must be aimed at reducing medical symptoms (e.g., insomnia, anxiety, or depression) or reducing impairment.
Because reimbursement rates are low and can take a long time, a lot of therapists get concerned about their cost of living.
With university debt and the need for ongoing education, it’s easy to see why this is a challenge for therapists.
Do the math: half as many clients at your full rate and with no headache makes more sense than scraping by.
Ninth, therapists burnout too.
The pressure to make money, pay their bills, and often to raise a family can make therapists take on more clients. And at the rates insurance is willing to pay, they have to.
The ideal caseload for therapists is 20-30 clients, depending on the therapist. Some therapists go over their quota to make ends meet and end up burned out.
As they recover from burnout (assuming they don’t leave mental health altogether), they think “accepting insurance is unsustainable.”
Lastly, there’s the time spent with insurance companies that therapists can’t get back.
Time that could be spent focusing on clients, enjoying time with family, or pursuing professional development.
f you add it all up, that’s hundreds of hours each year haggling with insurance. Therapists eventually see that it isn’t worth the time and they have more important things to do.
With that covered, it’s important to clarify things. We’re not saying NO therapist takes insurance, or that there aren’t affordable options with therapists who don't like insurance panels.
Many therapists offer flexible payment options, including sliding-scale fees based on income, reduced rates for self-pay clients, or the ability for their clients to get out-of-network benefits. Some even offer free therapy for those in dire need of mental health services.
Ultimately, the decision to accept or not accept insurance is a personal and professional one for therapists, based on a variety of factors such as their practice model, financial considerations, treatment approach, and their commitment to client care.
Below, you’ll find two great options for accessing affordable therapy.
The two options are sliding scale fees and pro bono services. See an explanation of each below.
Most therapists will offer a lower rate for those who need help. Often, all that’s required is proof of income to receive the sliding scale fee, which is based on your income level. Some therapists offer sliding scale rates at half of or sometimes less than half of their full rate. To find out, simply ask your desired therapist in email or over the phone about their sliding scale fees.
It’s surprisingly common for therapists to offer a few slots in their schedule to the most desperate clients. These are usually clients who are in poverty and have no money to spare. Some therapists partner with community organizations such as churches and mental health centers. Pro Bono services are a great way for therapists to give back to their community. If you’re interested in Pro Bono services, contact your community mental health clinic or faith network to explore your options.
In this blog, we covered 10 surprising reasons why therapists don’t take insurance.
We also covered two options for getting cheaper therapy services that don’t use therapy.
Finally, there’s a 3rd option that’s growing in popularity: Thrizer
Thrizer is a payment application that automatically links with your health insurance and verifies how much it covers for therapy. It completely takes over the insurance claim process on behalf of therapy-goers. Thrizer users can get updates on their claims as they are filed and accepted. If the claim is denied, Thrizer automatically follows up with the insurance company to remedy the issue.
To see how Thrizer can help you access therapy in an affordable way (whether or not your therapist takes insurance) check out our website.
Everything is automated nowadays. Why not automate reimbursements for therapy?
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This blog post is provided for informational purposes only and is not intended as legal, business, medical, or insurance advice. Laws relating to health insurance and coverage are complex, and their application can vary widely depending on individual circumstances and state laws. Similarly, decisions regarding mental health care should be made with the guidance of qualified health care providers. We strongly recommend consulting with a qualified attorney or legal advisor, insurance representative, and/or medical professional to discuss your specific situation and how the laws apply to you or your situation.
