Updated: Nov 1, 2022
Everything you need to know about finding (and affording) quality mental healthcare
Ok, so you've been feeling kind of depressed. That's the bad news. The good news? You've got health insurance. You hop online to find a therapist and get some help.
But wait...why are there only 3-4 therapists in my area that take insurance? Why do they all have 2-3 month waitlists? What's going on!?
Let me explain –everything you need to know about therapy, insurance, and finding affordable therapy.
Health Insurance vs. Mental Health
Let me start by stating the obvious: this is a complicated issue. I don't have all the answers. What I do have is about a decades worth of experience in the mental health field, so I'll speak from that.
To get us started, some backstory might be helpful.
Behavioral health ("talk therapy") hasn't always been covered by most insurance plans. That's actually a pretty recent development. Health insurance itself began to be offered in the US as early as 1850, but it wasn't until after World War II, nearly 100 years later, that most plans even had the option of coverage for mental health services. Even then, mental health services were only partially covered by insurance providers and usually for a time-limited basis. It wasn't until President George W. Bush signed the Mental Health Parity and Addiction Act (MHPA) in 2008 that things really began to change. With this new piece of legislation, insurance providers were required by law to begin offering coverage for behavioral health services that was comparable to coverage for physical health services.
This should have been the end of the story, right? Therapists get a fair reimbursement rate and their clients don't have to pay out of pocket to get help. Close the book, pack it up, everyone can afford mental healthcare now.
So why does it seem like less and less therapists are accepting insurance for their services?
Reason 1: Insurance Companies Don't Pay Well
Reason 2: Insurance Companies Charge Their Client's Too Much
Reason 3: Insurance Companies Make Getting Paid It's Own Full-Time Job
So how do I find affordable help?
Tip 1: Research Your Behavioral Health Plan
Tip 2: Psychology Today & Open Path Collective
Tip 3: HSAs, Sliding Scales, & Super Bills
Reason 1: Insurance Companies Don't Pay Well
I know what you're thinking: It's all about the money. Well, I'd be lying if I said money had nothing to do with it, but it may be more complicated than you think. No therapist is in the field to get rich (this gig doesn't pay that well), but we do have bills of our own to pay.
Insurance companies lock their providers into contracts in which the insurance company gets to stipulate the rules for what services are reimbursable, not reimbursable, the rate at which a therapist is reimbursed, and how long it will take to get paid. Does a therapist have any input in this? Eh, not really (see Reason 3).
Insurance companies are dangerously close to being monopolies. There are really only a few giant companies that oversee most of the plans your employer is likely to provide: Blue Cross Blue Shield, Cigna, Optum, Aetna, etc. You could count them on two hands. If these companies all set their rate of reimbursement for therapy a similarly low rate, there's no competition driving the price up.
What do reimbursement rates actually look like? The average private-pay rate for therapy services in Middle Tennessee is between $150-175/hr. So what do insurance companies typically reimburse? On average, most therapists that accept insurance get reimbursed in the $75-$100 range. That's about half the market price and less than half of what the insurance company is actually billed (See Reason 2)
Insurance companies don't always pay well enough to keep most therapists in business.
Reason 2: Insurance Companies Charge Their Clients Too Much
I wish I could say that therapists were the only ones being impacted by the not-so-great practices of major insurance providers, but I've got some bad news: they're screwing you over too.
Maybe you've got a really great insurance plan. That's awesome! But even in plans with really great health coverage, often the mental/behavioral health coverage is less competitive. Most plans are weighed down with staggering deductibles and time-limited coverage.
Let's start with the deductibles. Remember that low rate of reimbursement thing I was talking about earlier (Reason 1)? To get around this, a lot of bigger therapy practices and hospitals will hike up their session fees knowing that insurance companies are only going to reimburse a percentage. 70% of $190 is more money than 70% of $125. When you have a plan that requires you to meet a deductible before the insurance provider will chip in, that means that you're paying the higher $190 rate for these services out of your own pocket. If you have a really high deductible, it will likely make it difficult to meet your deductible by the end of the year. So you're paying for therapy from your own pocket, often at a higher rate than you'll find on the private pay market. Not great!
Private pay therapy allows us to keep our rates lower and more affordable for our clients, because we're billing you directly, not some mega-corporation that is going to haggle with us. If you've got a super high deductible, this can actually save you money in the long run. Often by the time people meet a $5,000 deductible, the year is over and you have to start paying out of pocket towards that deductible all over again starting in January.
What is time limited coverage? Sometimes insurance companies will only approve a limited number of sessions (usually in the 6-10 range) through an Employee Assistance Program (EAP). Why does this matter? Unfortunately, 4-6 sessions isn't enough time to do a lot of work in therapy. That's enough time to cram in and practice 3-4 new coping skills, but if you've got any bigger issues going on (trauma, self-harm, suicidal urges, grief and loss, etc) you're not going to feel all that much better at the end of 6 sessions.
Insurance companies will do whatever it takes to avoid paying for your healthcare. Period. Unfortunately, that leaves you footing the bill.
Reason 3: Insurance Companies Make Getting Paid It's Own Job
Let's say you're fresh out of grad school, ready to enter the field and become a therapist. If you want to accept insurance for services, you have to submit an application to get "paneled" with each individual insurance company. That means individual applications, individual documentation submissions, and individual contracts to sign.
That's a pain, but at least the worst is over, right? Not so much.
Let's say you come in for a session with your therapist on September 1st. After that session, the therapist has to document the "encounter", meaning that they have to create a record of when you met, how long you met, what interventions were used, etc. This part is standard, regardless of how you're paying for services.
After your therapist finishes their documentation, they need to attach a billing sheet with unique encounter codes specific to the type and length of service provided. This sheet is then attached to a bill and sent over to your insurance provider. That company then has around 90 days to review the documentation and provide reimbursement for services.
Your appointment may have been on the 1st of September, but best case scenario your therapist isn't getting a check until November or even December. But wait, it gets better.
Let's say that the insurance company decides that there's something wrong with the bill they received. Maybe you still have a deductible left to pay and they won't reimburse until you meet it. Maybe they think another code is better suited to the intervention. Maybe they think your symptoms aren't severe enough to warrant continued treatment. So the insurance company rejects the bill. Does this happen right away? No way! They still take the 60-90 days, at which point your therapist has to resubmit the documentation or call the company to justify treatment, at which point there is another 60-90 day wait time.
Okay, we did it. The insurance company accepted your claim. At least you get the full amount after all that work, right? Unfortunately not (See Reason 2). In all likelihood, partial reimbursement is received and the client is responsible for the rest. The sort of good news is that therapists can negotiate higher rates with these companies, but this too takes a ton of time and energy.
If your therapist is seeing clients and documenting encounters 40 hours a week, they likely don't have a ton of time (or energy) to argue with insurance companies, negotiate rates, and mail bills back-and-forth.
While there are some group practices and hospitals that can afford to staff people who's only job is to bill and negotiate with insurance companies, most individuals or small practices just can't afford that.
More and more often, therapists are moving into the private practice setting and deciding to forgo the headache that comes with dealing with insurance companies. There are still a good amount of therapists out there that do accept insurance, but because the demand for insurance-covered therapy is so high, a lot of these therapists have extremely long waitlists.
Working with insurance companies in a psychotherapy setting is it's own full-time job.
"Okay, so insurance companies suck. But I don't have a choice! Money is tight and I can't afford to pay hundreds of dollars for therapy! What do I do?"
In the immortal words of Douglas Adams: "Don't Panic". Below are a few tips for navigating the chaos of insurance and making therapy as affordable as possible.
Tip 1: Research Your "Behavioral Health" Plan
First and foremost, do a little digging into your insurance coverage for mental health services. This will likely be under "behavioral health" options in your plan. Can't find it? Trying to decipher it giving you a migraine? Talk to your HR representative, plan representative, or manager about your options. These people are trained, ready, and experienced in conveying the need-to-know information about insurance into digestible chunks.
Some good questions to ask are:
"Does our plan cover behavioral health and/or psychiatric services"?
"What percentage of therapy services am I responsible for under this plan? Is there a co-pay"?
"What is my deductible for behavioral health services"?
Keep in mind: Not all insurance plans are bad.
Some plans do offer competitive options for covering therapy services. Other plans have low deductibles. You may have even already put a dent in your deductible through other health services, meaning that you're not too far away from getting these services fully covered. Find out! There may be people in your company who will help you calculate whether therapy would be cheaper using your plan or by paying out of pocket.
Tip 2: Psychology Today & Open Path Collective
Let's say your insurance coverage just doesn't put you in a strong enough place to afford therapy or that you can't find a therapist with immediate openings who accepts your plan. How do you find affordable therapy?
Let's start with Psychology Today. Psychology Today is a website dedicated to linking people with a therapist that is the right fit for them. Think of it as a therapist search engine. Not only can you look up therapists by location, but you can then filter these results by presenting problem, speciality, gender, race, price, and more!
One critical way to use this site is to compare price-points between therapists. Most therapists list the range of prices for various services directly on their Psychology Today listing. You can also find out whether the therapist offers a sliding scale (see Tip 3).
Open Path Collective is another great site dedicated to linking clients and therapists. The critical difference between this site and Psychology Today is that Open Path is dedicated to linking clients to therapists who are committed to offering affordable services. Therapy offered through Open Path is capped at $30-$60/session for individual therapy. That's a steep price cut! There is a one-time membership fee of $59, but the site itself operates quite similarly to Psychology Today in the information it provides.
Tip 3: HSAs, Sliding Scales, & Super Bills
Believe it or not, most therapists don't enter this field to get rich. They enter the field to help people. Most therapists are passionate about their work and try to work with clients in need of services as much as possible.
Psychology Today and Open Path can be a great way to find therapists that may be a good fit for your needs and personality. You can also find general information about the cost for services. But one last "Hail Mary" option is to contact these therapists directly and ask about options for making their services more affordable.
While a lot of therapists may not bill insurance companies directly, there are a few work arounds. First, most therapists will accept a Health Savings Account (HSA). Not sure what this is? Some health insurance plans offer "savings accounts" for healthcare expenditures. They will pull a certain percentage of money out of your paycheck and place it into this account. Many companies that offer plans like this will also match a certain percentage of the money you're tucking away. Psychotherapy is a qualified service for most HSAs, so ask your therapist if they will accept this form of payment.
Second, while a lot of therapists list whether they offer sliding scale options on their websites or listings, not all do. Ask! A lot of therapists will have a certain number of sliding scale spots or will adjust their fees based on your household income. This can make services much more affordable!
Lastly, ask your therapist about "super bills". Super bills collect invoice, payment, and treatment information into a concise document. This document can then be submitted to your insurance company for reimbursement. Now don't get your hopes too high, not all plans will reimburse for super bills, but some certainly do. I tell all of my clients that it's worth a shot.
Insurance is a bit of a nightmare. Our healthcare system has been engineered around the idea that most people will have insurance through their job and that this insurance plan will cover most medical expenses. But it doesn't always work like that in practice!
Finding a therapist you like and that can help you is a difficult enough task all by itself. Figuring out how to pay for therapy can make it feel like it's impossible to get help. But there are resources available to help you find and receive the help you need.
At the end of the day, therapists are people whose whole lives are built around helping others. If you take one thing from this article, it should be this: talk to your therapist about affording therapy. Most therapists will work with you and outline ways of making therapy more affordable. If they can't get the price low enough, your therapist will be able to point you in the direction of other providers who may be able to get the price where it needs to be while still offering quality care.
It can get better. Finding help IS difficult, but it is NOT impossible. You got this.