3 Reasons Why Many Therapists Don’t Take Insurance

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Therapists who are in-network with insurance plans are hard to come by. According to the Wall Street Journal, “Many therapists don’t take insurance. The ones who do are often booked.” 

Like most therapists, I chose this career to help people. And as both a therapist and a practice owner, the issue of therapy fees and insurance is something that weighs heavily on me. I wish that everyone could access quality mental health care. And yet, I can no longer accept in-network insurance as a mental health care provider. And I’m not alone. Many therapists are ditching insurance. Here’s why:

1. Low therapy reimbursement rates from insurance companies often lead to burnout and exhaustion in overworked therapists.

The difference between insurance payments and self-pay is huge. Insurance companies often do not compensate therapists at a rate that therapists can sustain.

According to U.S. News and World Report, “Insurance companies across the country offer low reimbursement rates for psychologists and psychiatrists, leading growing numbers of therapists to refuse to take insurance because payers “don’t provide a living wage.”

Therapists go into our chosen profession because we want to help people. But we also have to earn a sustainable living from our careers. Living in poverty or overworking to make ends meet can be damaging to mental health. It’s imperative that therapists, and everyone else, earn enough so that the stress of financial insecurity doesn’t negatively impact their mental health. 

Too many underpaid therapists slog away in agencies treating more clients and working more hours than is good for their own mental health. This all too common cycle of overwork and underpay leads to burnout. Many therapists feel the cycle is just not sustainable for a long-term career as a therapist.

Insurance companies and agencies often focus on counselor “productivity” rather than quality care and counselor sustainability. When counselors report burnout, they’re often told to engage in self-care rather than reduce productivity requirements or ask for reasonable reimbursement. But self-care can’t cure a systemic problem.

When you have a therapist working for too low pay per client, you have a therapist working with too many clients. The low cost for patients is great! But low pay for therapists often leads to burnout and subpar care. 

I love my career. I believe in my work. I care deeply about my clients. But it’s not enough to prevent burnout in my profession. It’s important that therapists can have practices that sustain them long-term. After all that goes into becoming a therapist, they deserve a sustainable career. This brings me to the second point: 

2. Therapists invest a lot upfront to practice, and continue to put a lot into their practice. 

In Psychology Today, Alice LoCicero Ph.D. writes, “Private practitioners are part of the gig economy. We do not get any benefits such as health insurance, paid vacation, or sick time—and no perks. Plus, we have plenty of expenses.” 

From each session fee, therapists need to take out such taxes as self-employment, medicare, and social security. Their fees for therapy also cover operating costs such as professional liability insurance, credit card processing fees, HIPAA compliant communication platforms, electronic health record services, rent, utilities, and additional overhead. And, as is the case with many workers, many therapists need to cover the cost of childcare during the hours in which they see patients. 

On top of all the other costs involved in providing therapy, private practice therapists often cover the costs of their own healthcare insurance and therapy for themselves. Many therapists also pay for clinical supervision, legal representation, and financial advising or accounting. Essentially, there are many factors that go into setting therapy fees, and insurance companies don’t always reimburse therapists enough to adequately cover them. Furthermore, therapists invest substantial time and financial resources into their careers. To become licensed, therapists need to have earned at least a bachelor’s degree, a master’s degree, have served hundreds of hours in a student practicum placement, and have put in thousands of hours in post-grad school low-pay or no-pay internships. All of this adds up to a substantial investment that therapists need to account for. 

3: Insurance involvement can impact the quality of therapy you receive. 

Here is a common concern held by therapists: Insurance involvement in mental health care can negatively impact your therapy in a number of ways. 

In addition to insufficient reimbursement rates to the therapist, insurance companies getting involved in treatment can derail therapy in a way that is better for the insurance company, but not always better for the patient. 

Because of the aforementioned education and supervised experience requirements to be a therapist, we often feel more qualified than insurance companies to determine the best course for our patients’ treatment. We sometimes feel as though insurance companies dictate treatment instead of allowing qualified clinicians and their clients to make the best treatment decisions.

Here’s just one example: 

It’s no secret that if a patient wishes to use their insurance for therapy their therapist will likely need to diagnose them. Therapists are often required by insurance to diagnose a patient after just one session with the patient. Many therapists agree that it can take several sessions to determine a correct if any, diagnosis.

And not just that… 

What if the patient doesn’t meet the criteria for a diagnosis? An ethical dilemma can occur between you, your insurance company, and your therapist.

And then you have this problem:

The diagnosis becomes part of your medical record. Unfortunately, therapists have too many examples of how diagnosing patients has done more harm than good. It can be stigmatizing. It can also be wrong. 

So, insurance companies don’t always adequately compensate counselors. They sometimes dictate treatment instead of allowing qualified clinicians and their clients to make treatment decisions. Therapists often feel pressured by insurance companies to diagnosis patients even when patients don’t quite meet diagnostic criteria for a mental health disorder.  

Here’s how I’ve justified being an out-of-network therapist:

Limiting my focus to a  sustainable amount of clients per week by getting off insurance panels, means I am a better therapist. I can focus on quality therapy over quantity of clients. That said, there are many wonderful therapists who are able to take insurance and provide quality care.

I hope that health care becomes affordable for all. I hope that includes mental health care. And I hope we can one day accomplish providing and receiving mental health care in a sustainable manner for patients and therapists alike. But I can’t fix the system. The best I can do is take care of my clients within the circumstance that we’re given. My practice is set up to sustain my own mental health while I help my clients. Because of this, I’m confident that I can provide quality therapy every session.