How to Use Your Insurance For Therapy

Prioritizing your mental health is one of the most important investments you can make. You might be concerned about making the process as sustainable as possible.

If you’d like to start going to therapy, but aren’t sure how or when to use your insurance, you’ve got a few options to choose from.

Your three main choices to pay for therapy are: private pay, in-network insurance, and out-of-network insurance.

Here’s a brief rundown on each option and how to decide which path is right for you.

Paying For Therapy Out-of-Pocket

Private pay, also known as out-of-pocket, is the best option for anyone who doesn’t want their insurance or employer to be involved in treatment.

This option means you pay your therapist directly for services and you get to choose how often and how long you attend therapy.

There’s no diagnosis requirement and you can work on any issue or concern without your insurance provider dictating treatment.

Many people choose this instead of using insurance because they don’t want a diagnosis on their medical records (something insurance requires) and they want to keep their treatment completely private and autonomous.

Most therapists accept private pay, so this also allows you to choose your therapist based on best fit, rather than insurance availability. You may also find that because it’s a bigger investment, it’s easier to stay committed and reach your goals.

Pros: more options to find the best fit, no diagnosis requirement, full autonomy over your treatment, most likely to commit
Cons: most expensive option

Using Your Insurance to Pay For Therapy

If you need to use your insurance, you can request a list of in-network clinicians from your insurance provider. Just know that most lists will have inaccuracies or out-of-date information.

For a more up-to-date list, I recommend using online directories like Psychology Today or Therapy Den that let you filter by insurance.

Once you find an in-network therapist, you pay them a copay at the time of your appointment, and then your therapist handles collecting payment from your insurance.

While this is the most economical option, it’s also the most restrictive and intrusive.

Insurance can limit the amount of sessions, or deny coverage entirely, regardless of whether this is in your best interest. And a diagnosis of mental illness is required in order to use your benefits.

There’s also less privacy because your provider will have access to your medical records, as well as your employer (if your insurance is through your job).

The other problem is that instead of choosing a therapist based on fit, it’s now based on whether they happen to take your insurance. And with fewer clinicians being willing to deal with insurance companies, your options become much more limited.

Pros: least expensive
Cons: little to no treatment autonomy, loss of privacy, strict diagnosis requirement, limited therapist choice

Using Out-of-Network Insurance Benefits

This is a workaround that allows you and your therapist to maintain more control over your treatment and still use your insurance benefits.

You pay your therapist at your appointment, they give you a receipt (also called a superbill), then you submit that receipt to your insurance for potential out-of-network reimbursement.

Most PPO plans are required to offer some degree of out-of-network benefits. The amount you get back will depend on your specific plan. Some plans reimburse up to 80% and others hardly anything at all.

This option still requires a diagnosis, but in my experience, these benefits typically cover more diagnoses than in-network.

The first step is to contact your insurance provider to answer a few questions:

Do I have out-of-network mental health benefits?
What is my reimbursement percentage?
Is there a deductible and has it been met?

Most (if not all) therapists will provide a superbill upon request. So you’ll still be able to choose your therapist based on best fit and not an arbitrary requirement.

Pros: less expensive than private pay, can choose best fit therapist, more autonomy and privacy
Cons: requires a diagnosis, a little more expensive than in-network

Resources to Help Cover The Costs of therapy

If this process feels confusing or overwhelming, there are helpful resource that can help you navigate using your insurance for therapy.

I highly recommend using a resource like Reimbursify to handle getting out-of-network reimbursement.

You give them the receipt from your therapist, and they deal directly with your insurance. If there’s an issue, they contact your therapist directly for more information or clarification.

They take a small fee from your claim, but only if you get reimbursed. I’ve gotten great feedback from clients that this was a stress-free way to get reimbursed.

This is a much easier way to navigate using your insurance that isn’t as restrictive or intrusive as in-network.

Is using your insurance for therapy worth it?

If you decide to use in-network benefits for therapy, it’s important to know ahead of time that there are several risks involved.

The biggest risk of using your insurance is the loss of confidentiality and privacy.

This is because a mental health diagnosis will go on your permanent insurance record, which can be accessed during background checks.

This can become an issue if you need security clearance for work or you’re involved in a court case (like child custody). Your insurance provider will require a mental illness diagnose to approve treatment, which means this diagnosis will be on your record.

It’s up to each individual to decide what works for them. Therapy is an investment, and it’s important to make it as sustainable and workable as possible to reach your goals.

If this process seems confusing or overwhelming in any way, talk to your therapist about what might work best. Most therapists offer consultations before beginning therapy, giving you a chance to figure out the best way to navigate.

I hope that clears up some confusion or misconceptions around using insurance for therapy! If you’re still not sure, your best bet is to contact your insurance provider to clarify your benefits.

If you have a particular therapist you’d like to work with, they can also help you navigate the process.

Ultimately, consider your long-term goals and what’s most important to you before deciding. And know that you can always change your mind in the future!