Using Insurance to Pay for Mental Healthcare: A Therapist's Perspective


Authored by Molly Merson for Psyched in San Francisco. Molly is a relational, psychodynamic psychotherapist in private practice in Berkeley, CA. Molly works with adults and adolescents of all genders in approaching uncomfortable feelings, working through stuck patterns and creating room for joy and desire.

While I'm pleased to read NPR's ongoing investigation into mental health access, therapists like myself face a lot more when considering taking insurance, including mental health stigma, private practice costs, assumptions about "helpers," and client/patient privacy and confidentiality.


Mental health stigma is alive and well, and plays a part in the insurance conversation. When patients use insurance, they reveal the fact that they are in therapy, as well as a mandatory diagnostic code, to a third party. The problem is, therapy doesn't lend itself well to third party scrutiny. Therapy is often like a dream, where strange thoughts and uncanny relationships between images and sensation arise. It's a language that doesn't really hold itself up to conscious, logical assessment. Maybe you don't actually want to kill your father and have sex with your mother (thanks, Oedipus), but your unconscious doesn't know that. Therapy works because it helps you deeply get to know yourself and process your feelings in a safe environment. Worrying about your insurance company requesting your records and declaring your therapy "not medically necessary" could pose a challenge to that safety.

In the fine print of your insurance policy, you might discover that your insurance company has the right to audit your diagnosis, treatment plan, and progress notes to prevent fraud and determine whether the treatment is medically necessary. But having a non-clinician look into the deepest secrets of my patients feels like an unethical breach of patient confidentiality, and makes me uneasy. I'm not sure I trust the auditor more than I trust myself and my clinical consultants to understand and care for my patients' needs.


Additionally, since many people come to therapy to better their lives and relationships, it can be difficult to find a medical reason for the treatment. Yes, intervening when someone is suicidal is medically necessary, but what about everything leading up to and following the crisis? Some therapists are willing to juggle the risk to confidentiality with the need to make mental health care financially accessible.

But there are two people in a therapeutic relationship (three, if you count managed care, or if you're a relational psychoanalyst). Therapy must also be financially viable to the therapist. The truth is, someone has to pay us. Our profession is not a hobby. Up to six years of graduate school and 3,000 hours of mostly unpaid training is expensive. In private practice, therapists pay for office space, electricity, and furniture. We provide our own health insurance, disability, and retirement plans. Vacation and sick days don't exist. There's transportation, record keeping software, an accountant, business license, continuing education, personal therapy, and consultants to help with complex cases. And taxes, including the special "self-employment tax" that small business owners have to pay on top of regular taxes (usually about 15%).

It adds up.

If I see on average 14 clients per week (many therapists, myself included, stay under 20 clients to provide competent care), I charge $100 for each hour (just for round numbers' sake, not my actual fee), and all those hours are paid, I'll make $70,000 a year with two weeks vacation. Factoring in overhead, estimated at about $30,000 by Zynnyme, then self-employment tax and income tax, that comes to about $23,000 in take-home pay. That's 50% of median income for the SF Bay Area and qualifies me for reduced income housing (rent or mortgage being anywhere from $2,000-$6,000 per month in the Bay Area).

Finances are a huge consideration for therapists wanting to take insurance. I wish I could share the contracted rate I was offered the last time I inquired, but I can't. I'm not allowed to talk about what insurance companies actually pay, and therapists cannot unionize to advocate for better rates from insurance companies. That would violate the Sherman Act and the Cartwright Act. In fact, therapists are not even allowed to talk to each other about their fees. That could be interpreted as conspiring to monopolize. However, I can share that some rates I've been offered are less than half my fee, and not nearly enough to live on. In addition, insurance companies don't pay for missed sessions, so the hypothetical income calculations above could end up being even lower.

I know a few therapists who take insurance. They have to overbook their practices in order to meet their bottom line. They report feeling burnt out, tired, overextended, still don't have enough for retirement or emergency savings, and struggle to take vacations.

The helping professions, indeed.

But here's the thing: Many of us want to take insurance. We went into this profession to help everyone who needs it, not just those with financial means. I am hopeful for change with Hillary Clinton's new bill attempting to expand Medicare and Medicaid. But since MFTs are barred from accepting Medicare, this proposed bill may still be paying lip service to a deeper problem.

I think about the patients I see who can't afford much (if anything) out of pocket, who are wrapped up in so much childhood trauma that they could benefit from multiple sessions per week. One-third of my practice is sliding scale or pro-bono, and the rate I charge factors for that. But I wish I could work with anyone whose need fits my skills, regardless of their financial means. I wish I could accept insurance without feeling like I was compromising the integrity of my practice, or feeling resentful about rates so low that I couldn't pay back my debts or take care of myself and my family.

These are heavy things to consider as a private practitioner. I constantly support my patients in developing healthy boundaries and increasing abundance and self-esteem. What kind of therapist would I be if I could not do the same for myself? Unfortunately, for many of us, accepting insurance would make our own survival impossible. Until something changes, we are caught in a conundrum: able to help some, but not all, who need our care.