Should I NOT Use Insurance for Therapy?

I always find myself slightly concerned when people insist on using their health insurance when it comes to psychotherapy or counseling. I get calls all the time where someone says, “Nathan, I want to work with you, but I need to make sure you take my insurance first.” While it’s nice to have financial assistance, the use of insurance to cover part of therapy can often cause more stress and problems than people tend to realize in advance.

Nowadays, the health insurance options are quite different than they used to be. There are generally less out-of-network coverage options available to the public, and the in-network therapists are often difficult to find since there are so many in-network-only plans out there that providers tend to be full.

Complicating the insurance issue even more are high deductibles, lower coinsurances, high copays, and constantly decreasing “allowed amounts” by insurance companies, which at times can make out-of-network coverage almost meaningless.

Is there a benefit to choosing not to use your insurance?

Yes. There are several benefits to leaving insurance out of therapy.

  1. Your treatments become at the mercy of your insurance and all of its built-in fluctuations when you use insurance. The allowed amounts change, the deductibles come back every year, and insurances balk at payments, which often leaves the client vulnerable to higher charges than expected. It can be difficult sometimes to know from one month to the next if your out of pocket amount may change, one way or another — which can also lead to several months of unresolved bills while you and your therapist wait to understand your coverage. It’s also not uncommon for plan details to change again after finally understanding the original details.
  2. Insurances can cut you off. While it’s at times questionable how ethical this is, it does happen much more often than people realize. One day you’re covered, and then suddenly you’re not covered for a particular service anymore.
  3. Using insurance makes it much harder to choose your own provider, and makes you limited to not only just those who accept your insurance, but also to those who actually have room in their practice. Sure, you can choose a name from an insurance list, and hopefully the name you choose will have space for you. But it has become more and more difficult for people to find available therapists in their network lately because so many individual plans are in-network-only now. It’s questionable if the demand of in-network providers can realistically be met.
  4. If you already have a relationship with a therapist, becoming dependent on your insurance for the treatment means that at any point, the treatment could end because the insurance could stop covering. (Insurances do periodic reviews of cases, and they essentially determine if they’re going to continue to cover your treatment or not).
  5. If you use insurance, it compromises your confidentiality since the insurance company has the right to evaluate your case for continued coverage.
  6. Using insurance means submitting a diagnosis, which may impact future insurance coverages of different types if they have pre-existing condition clauses. This can include life insurances and/or disability insurances as well as future health insurances.
  7. Many seasoned and highly experienced therapists don’t work with insurances since insurance pays providers very low, and it is generally an additional stress to deal with the associated paperwork, phone calls, etc.
  8. High deductibles mean you’re paying fully out of pocket for months before your insurance coverage even kicks in. Is it worthwhile to choose a random therapist from an insurance list when you’re going to have to pay out of pocket anyway? This is also complicated by high copays. People can go from paying fully out of pocket to high copays that almost makes using the insurance worthless.
  9. If you switch jobs, or if your job switches plans, you may lose your coverage for a particular provider.

This is a partial list. But suffice to say that dealing with insurance as part of therapy adds complications across the board with who you can see, how long your therapy will be covered, how much will be covered, going back and forth from being covered to not being covered (deductibles), confidentiality, and more. It essentially takes the therapy out of your control and puts it in the hands of the insurance company. While this may be fine for some types of medical care, therapy is an incredibly close and personal relationship. It’s a significant risk to put this type of relationship in the hands of an insurance company, who from day one would like nothing more than to stop spending money covering your treatment.

The best way to avoid all of this is to consider making the investment to pay for your therapy out of pocket. If the person you want to work with is charging a higher rate than you can afford, ask them if they can slide their fee for financial need. It’s much easier to find a rate you can both agree on than to deal with the continuous effects of insurance. The impact of insurance can even take over the therapy itself, at times, which is an intrusion no one appreciates. If you’re paying out of pocket, there is no dealing with filing claims, managing allowed amounts, deductibles, coinsurances, limits, etc. You choose your provider, and you have your therapy. Clean and easy.

People I work with have expressed relief by adding some extra out of pocket, and not having to deal with the hassles of insurance. Many have even acknowledged that it’s increased their sense of empowerment to see that they can do this without the outside help — increased independence and being the master of their own self-care, not having to answer to anyone else. So leaving insurance out of the therapy may pay off in more ways than one.

What are your thoughts?

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