If you were to ask therapists why they pursued a career in mental health, the majority would share that they were passionate about supporting others in working through life’s challenges. And most would also agree that accessible mental health care is very important.
After enduring a rigorous graduate school program and completing required pre-licensing hours, therapists can apply to be credentialed with health insurance companies. Unfortunately, many therapists and other mental health professionals such as psychiatrists have been discouraged by others’ stories or their own experiences with insurance and have chosen to be private pay or out-of-network providers. “Of all practicing medical professionals, therapists are the least likely to take insurance” (Pajer, 2014).
Although there are regulations in place to protect clients from inequality in the insurance system, some companies are continuing to cut corners by restricting, delaying, or denying treatment in patients experiencing mental health challenges. Patients who require long-term mental health care are viewed as a costly burden for insurance companies. Some major insurers limit the number of in-network specialists in their plans in order to deter people from choosing their insurance plans
Research shows that about 92 percent of the US population (316 million people) currently have some type of healthcare coverage (Hale et al, 2024). Although most Americans have health benefits, studies showed that only 40-50% of Americans with mental health issues received treatment. This reveals that about half of these individuals may have not had access to mental health care.
Insurance Companies Dictate Mental Health Services
It’s evident that there is a greater demand for insured therapists than there are therapists in-network. There are many reasons why therapists may choose to discontinue working with insurance companies or avoid them altogether. One common complaint is that insurance companies dictate how therapists can provide care to clients. Insurance companies may limit the number of sessions and the treatment type (ex: CBT instead of somatic therapy). They may also deny members treatment altogether based on how they view the significance of the client’s symptoms or diagnoses.
It can be problematic for an insurance company to limit the number of sessions and type of therapy, because it may not be adequate for what the client needs. For example, if someone was seeking therapy for PTSD and the insurance company limited treatment to twelve 45-minute sessions, using CBT therapy, the client may not be able to make significant progress. At Flourish, we know that trauma therapy can take months or years to unpack, and “unconventional” holistic modalities such as somatic or mindfulness-based therapy can play a big role in processing and coping with overwhelming emotions, memories, and life circumstances.
A recent article from NPR in partnership with ProPublica shares a story of a provider who discontinued her contract with UnitedHealthcare after witnessing the company poorly handle mental healthcare coverage for one of her patients. Melissa Todd, a psychologist from Eugene, Oregon, left UnitedHealthcare after the company interfered with her patient’s care. Todd was treating a young woman with symptoms of bipolar disorder following the sudden death of her father. Despite her patient’s urgent needs, UnitedHealthcare questioned the necessity of therapy and pressured Todd to set an end date for treatment, even though cutting off care could lead to dangerous outcomes, such as a suicide attempt. Frustrated by these restrictions, Todd chose to leave the insurance network so she could continue providing the necessary care without interference. Many therapists face similar challenges. By cutting off therapy too soon or setting limits on session lengths, insurers can worsen patients’ conditions, leading to increased depression or anxiety, panic attacks, and even emergency room visits. (Waldman et al. 2024)
Even the White House has recently addressed concerns about the lack of accessible mental health care in the United States. Domestic policy adviser, Neera Tanden states “insurers are evading the mandate of law… [they] make it difficult to access mental health coverage in-network, and then consumers are often forced to seek care out-of-network at significantly higher cost and pay out of pocket. Or — and this is this is also a real challenge — they defer care altogether.” (Haslett et al. 2023)
Excessive Paperwork and Payment Issues
Therapists and psychiatrists are also choosing to remain out-of-network due to excessive paperwork and delays in payments from insurance companies. Some reimbursements take months, and mental health providers can’t always wait months to pay their overhead costs. The Change Healthcare cyberattack in 2024 delayed payments to health insurance providers for months. Sometimes insurance companies will deny claims, and providers have to spend extra time resubmitting documents. Some clinicians end up providing sessions for clients that are never reimbursed. And then there is the risk of “clawbacks” and audits. Clawbacks are when insurers request that providers return funds previously paid (possibly months or years prior) to them by the insurance company. The clawbacks could be for thousands or tens of thousands of dollars previously paid out.
Not only do therapists have to deal with paperwork and payment issues with insurance companies, but patients also run the risk of being responsible for hefty bills, especially if their plan has a high deductible or no out-of-network benefits, and have the added headache of dealing with long (and often unsuccessful) calls with their insurance support line.
Insurance companies often reimburse therapists significantly below market value. In Austin, the fees for therapy or counseling typically range between $120 – $300 per session, with the average being between $150-$180. The cost increases with expertise and specialized training.
Insurance reimbursement can be as low as $25 (for group therapy) to around $110 for a 60-minute individual therapy session, with the average being about $90 per individual session. As you can see, this is significantly lower than the local average for private pay sessions.
Many therapists have expressed their desire to provide affordable and accessible care, while also recognizing the need to have a sustainable business. Therapists are required to spend money every year on training, liability insurance, HIPAA-compliant practice management software, office space, telehealth platforms, and more. It can be nearly impossible for a therapist to take insurance and also cover their high overhead costs while making a living wage.
Confidentiality Concerns with Insurance
There’s also the concern about confidentiality with mental health diagnoses and client records. When patients are diagnosed with a mental health condition so that they can receive insurance reimbursement, the diagnosis can potentially go on the client’s record as a pre-existing condition. This can affect clients who are applying for life insurance, as life insurance companies can choose to raise your premium or deny coverage. For now, there are protections in place to prevent health insurance companies from denying membership due to pre-existing conditions, but this could also change in the future. Because of these issues, some clients choose to see a private pay therapist because session notes and diagnoses are kept confidential and not shared with insurance companies.
Need to work on this text:
While there are many challenges to receiving mental health care in the United States, there are options for folks who are seeking an affordable option. Some therapists choose to have a few sliding scale spots for clients with a significant need for lower fees. You can also find low-cost therapy by working with pre-graduate level student interns who need to gain clinical hours before they graduate. We have several sliding scale options for clients at Flourish.
We are also working on bringing on some clinicians who will be able to accept insurance clients through Headway. If you would like to be on our insurance waitlist, reach out to us here.
For clients working with a private pay therapist, you can also check to see if you have out of network benefits with your insurance company. If so, you can submit superbills (detailed receipts from your therapist) to possibly receive a partial reimbursement of your therapy fees from your insurance provider. Keep in mind that the insurance company may deny request if it doesn’t fit within their guidelines. There are companies like Reimbursify which can help you submit your superbills.
Sources:
Haslett, Cheyenne, Gittleson, Ben and Winsor, Morgan (2023, July 25). House pushes private insurance companies to cover mental health care. https://abcnews.go.com/Health/white-house-insurance-companies-cover-mental-health-care/story?id=101624512
Pajer, Nicole, (2017, May 4) Why is Therapy So Expensive? HuffPost
https://www.huffpost.com/entry/therapy-expensive-insurance_n_5900048ee4b0af6d718992e7
Hale, J., Hong, N., Hopkins, B., Lyons, S., Molloy, E., et al. (2024). Health insurance coverage projections for the US population and sources of coverage, by age, 2024–34. Health Affairs. https://doi.org/10.1377/hlthaff.2024.00460
Waldman, A., Miller, M., Blau, M., Eldeib, D., & Chatterjee, R. (2024, August 25). Finding a therapist who takes your insurance can be nearly impossible. Here’s why. NPR. https://www.npr.org/2024/08/25/finding-a-therapist-who-takes-your-insurance-can-be-nearly-impossible
Average cost of therapy or counseling in Austin, January 4, 2024:
https://justmind.org/how-much-does-counseling-cost-in-austin/
