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  • Writer's pictureGreg Schoeneck

Should I Use Insurance to Pay for Therapy?

Updated: Dec 16, 2022

Why do people not use insurance for therapy? Is paying for therapy worth it?

I’m going to try and talk about this topic in as nonbiased way as possible. I have worked in the mental health field as a therapist for a long time now in the Milwaukee area and I have worked for places that take insurance and work with payees and now I own a growing private practice that does not work with insurance in any way so I think I have some perspective to share about this.

Should I use insurance to pay for therapy is a complicated topic and is, to me very personal, so it really depends on where you are in life and what you are looking to get out of therapy. So I will start with, what I think, could be some of the main reasons someone might not chose to use insurance for therapy.

Privacy – Some people do not want anyone having access to what they are struggling with and their personal lives. When you use an insurance company or any payee, you are waiving your right to have this privacy and people at those agencies can see anything your therapist has placed in their treatment notes for you and that can be a BIG swing between therapists. Supervising therapists in a community practice for years I got to see a levels of note taking, to very poor and not detail to extremely long and detailed nots that shared very personal an intimate knowledge about the clients which was then placed in an electronic medical record system that gave MANY people access to this information whether they were supposed to have it or not. (this is standard practice for ALL of the big hospital systems now) I was constantly encouraging people to include ONLY what was necessary for billing, but that is just me. Some people encourage this level of note taking, and to me it is very concerning. So in private pay a therapist still has to write a treatment note, but it doesn’t go anywhere unless you, in writing, request that it does. So maybe this alone makes it worth paying for therapy out of pocket.

Diagnosis – So this is a big one. When you see a person who wants to utilize their insurance your therapist gets to meet you once and do an assessment and get to know you and then, BOOM, they have to have a diagnosis and a treatment plan ready to go for that diagnosis after talking to you for an hour. Then they have to send that diagnosis to your insurance company. So immediately after one hour of talking to you, you have a diagnosis and it is put into that electronic medical record and sent on to at least the insurance company but maybe visible to more. When you are self-pay or private pay a therapist doesn’t have to even give you a diagnosis they can talk about what it looks like and what you might be experiencing, but it never has to be written down and isn’t put in stone. If this is starting to bother you just keep reading and you might get that answer your looking for about why people do not use insurance for therapy.

Length of Time to Work Together- Here is where it starts getting even more complex and scary to think about using insurance for therapy. So as a therapist I send that diagnosis to your insurance company and THEY tell me and you how often we can meet this year that will be covered by them according to the diagnosis you are given. This can be very different for insurance company to insurance company but it is really not about, what is better or worse insurance, it is about THEM having this control. So the therapist has a little control here, and if the therapist wants to work with you or feels like you could benefit from more meetings they can give you a more severe diagnosis or sometimes a severe and persistent diagnosis (one that requires on going treatment). This allows them to get a lot of sessions for you to work with you. But puts possible a more severe or chronic mental health diagnosis into your record. So the difference could look like I’m working with a mom who is stressed out and anxious and sad about how things are going with her life and her family (Adjustment Disorder with mixed depression and anxiety – a DSM diagnosis) OR Major Depressive Disorder, Severe, Reoccurring and General Anxiety Disorder. But for the adjustment disorder we get 5 sessions and for the major depressive disorder and general anxiety disorder I can work with you every week for the whole year. Some people would prefer not have those big diagnoses attached to them permanently. So these things really start to makes sense for a lot of people as to why people would not want to use insurance to pay for therapy.

Continuity of Work – Another thing to consider is your relationship with your therapist and if you want to have control over who you see. First off there is a shortage of mental health professionals out there so a lot of agencies are utilizing clinicians with training licenses (in Wisconsin APSW and LPC-IT) so people right out of college and interns (no credentials) people who have not finished college and you will be their first experiences. You get a lot of this with agencies that work with insurance panels because they can pay them nothing and the insurances pay very little. So they come and go out of agencies quickly when they get training licenses and full licenses. But also therapists and agencies have a tenuous relationship with insurance companies and often stop working with insurance agencies because they reimburse too little or become just too hard to work with and get reimbursed at all. On the other side of that people/ clients change jobs and jobs sometimes even change insurance companies so there is always that chance that this change might mean that your current therapist no longer works with this insurance and you will have to start paying out of pocket or find a new therapist. Paying out of pocket almost always assures you will be able to work with the person you like for as long as you like and most likely come back to them in the future if you want to work with them again.

Freedom to Grow and Work on What YOU Want how YOU want – OK so this is a BIG one for people. Believe it or not some people want to be proactive about their mental health and their children’s mental health. They want to work on things that help them grow as people and insulate against more severe mental health issues. Therapy does this, but insurance does not pay for it. The medical industry, especially around mental health, has always been focused on reducing and managing SYMPTOMS. Some people want to grow and improve their relationships with themselves, their friends, their family, talk about life goals, build things that bring and sustain happiness into their lives. Along with this there is freedom of how to work with your therapist and how you connect to healing and growth, is that through standard talk therapy, virtual, in person, on the phone No problem. At some point those options will likely tighten up for people using insurance. Maybe you want to do walk and talk therapy and move why you talk and connect to nature while you do therapy, that is really not an option for insurance, although some are bending the rules right now, that will likely change as well. Maybe you want to work in more relatable ways, like “geek therapy” or by utilizing games or adventure therapy! It is all up to you and your therapist and some people think that’s how it should be and that’s what makes paying for therapy worth it.

Right now there are more people paying out of pocket for therapy than ever with services like BetterHelp providing about the lowest quality of therapy anyone could provide for as much as anyone could pay an individual self-pay therapist for therapy once a week. People seem to be confusing easy and multiple contacts with good therapy. I worked for BetterHelp for years and have seen how it ha evolved. Someday I will talk more about that, but please know there are good people working for BetterHelp, but they are likely burned out if they are any good.

So why should someone use insurance for therapy?

Therapy is valuable and there are a lot of people who simple cannot afford to pay out of pocket for therapy and that should not stop them from getting the help they need. People who have severe and persistent mental health conditions should certainly utilize their insurance benefits they are and will, most likely always be in need of therapy to support and manage their mental health challenges and honestly it can be very helpful to have a diagnosis listed in a big system so that the doctors and other providers that work with you can see that you might be struggling with PTSD or schizoaffective disorder. It could be helpful for them to know how to support someone in the best way around other health concerns. It also helpful for individuals looking to apply for things like disability to have a strong record of working with a therapist on these severe and persistent mental health concerns.

It is still important to understand what a therapist and/ or agency might charge for a therapy session. So please pay close attention to costs. I have seen community agencies who work with some of the most vulnerable people charge way more than I do for private pay options. So when your insurance refuses to pay for whatever reason (this can be the insurance agency’s choice or something the therapist or their billing people did wrong) you, the client, is on the hook to pay the balance and if their private pay fee is $150 or $200 or even more, that can quickly offset the benefits of just paying out of pocket from the beginning.

In the end the question of should I use insurance to pay for therapy? Is maybe. If you have no choice then the answer is YES if you are in need of therapy services and you cannot afford to pay out of pocket, please get the help you need! If you are in a position where you can afford paying out of pocket for therapy then you have some things to think about. For some people the things that I talk about here are very important and worth the investment in their own or their children’s mental health. Especially the idea of growth and insulation over trying to repair after it is damaged. Finally if you are paying a company like BetterHelp for services already, please consider finding a dedicated therapist who can really be most helpful to you and not just looking to type words for pennies and pack in as much contact time as possible to meet the burn out expectations of a company like BetterHelp, you’ll be happy you did.


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