Deciding on Insurance vs. Private Pay

There are different factors to consider when deciding whether or not you want to use your insurance to help pay for therapy. Here are some of the big pros and cons of using insurance vs. paying for therapy out of pocket.

Pros of Using Insurance

  • Lower out-of-pocket costs: If your insurance offers mental health benefits, it's likely your out-of-pocket expenses will be lower up front. Unless you have an outstanding deductible, you'll only be responsible for a co-pay or co-insurance.

  • Payments go toward your deductible: If you do have an outstanding deductible (whether in-network or out-of-network), the amount you pay out of pocket will likely go toward reducing that deductible balance for the year.

Cons of Using Your Insurance

  • Diagnosis is required and not all concerns are covered: Most insurance plans require you to have a diagnosis of a disorder in order to be eligible for coverage. That diagnosis becomes part of your permanent health record. Some insurance companies will not provide coverage for certain presenting concerns depending on what concerns they deem require “medically necessary” intervention.

  • Restrictions on services: Insurance companies can impose limitations on the number of sessions that will be covered in a given time span, how frequently you can participate in therapy, or even the types of therapy you can participate in.

  • Personal information exposed: Laws like HIPAA are in place to protect your data and make breaches are fairly rare. However, anytime your information is released, the risk increases.

Pros of Paying Privately

  • More freedom & options in choosing providers: When you consider working with clinicians who are outside of your insurance network, you may have access to more therapists with more expertise or specialized experience.

  • Diagnosis (or lack thereof) and treatment approaches are based on appropriate clinical judgment and collaboration with you: Paying for services privately means that if a diagnosis is appropriate or helpful to you, you and your therapist can work toward identifying the most accurate diagnosis by taking time to understand what’s going on rather than making a quick diagnosis to satisfy requirements from the insurance company. Bottom line: diagnosis is not always necessary (or helpful) to everyone in getting good therapy, but it is always necessary to get insurance to pay for it.

  • No limitations on time in therapy or service types: When paying privately, you get to decide how often you see your therapist, which therapist you see, and the type of work you do without input from the insurance company.

  • Fewer risks to confidentiality because your information is not being exchanged with the insurance company.

Cons of Paying Privately

  • Higher up-front fees (at first): Private-paying clients are responsible for paying the full service fee at the time of their appointment. However, many clients are able to take advantage of out-of-network benefits, meaning their insurance company will reimburse them for a portion of therapy costs once their deductible is met. Filing for this reimbursement involves the creation of a Superbill, which I will provide for you.

  • Payments are not applied to out-of-network deductibles if you choose not to file claims with insurance.

Insurance Terms To Know

Co-pay/Co-insurance

  • A co-pay is the dollar amount (usually a flat fee) that you must pay per medical visit (typically for in-network services).

  • Co-insurance is similar to a co-pay, but co-insurance rates are determined by percentage. Co-insurance payments may apply to services you need even after you meet your deductible.

Deductible:

  • The amount of money you are required to pay in a year before your insurance company will start helping with expenses. Most plans have different deductibles for in-network and out-of-network services.

In-Network/Out-of-Network:

  • In-network: An in-network healthcare provider has agreed to a contract with an insurance company where the provider will serve customers of the insurance company at a reduced rate.

  • Out-of-network: An out-of-network provider is not under contract with an insurance company. Typically, this means that clients are required to cover the full fee for services up front. Consumers can often be partially reimbursed for many out-of-pocket services by requesting that their healthcare provider share a "Superbill" with their insurance company.