Insurance For Counseling: Pros And Cons Of Accepting Insurance

Counseling can be a vital service, providing support for those experiencing mental health challenges, personal crises, or an urge to seek guidance in navigating life's complexities. Ensuring accessibility to these services can be crucial, and insurance may play a significant role in this equation. 

The decision to accept insurance may not be straightforward. Balancing financial considerations, administrative demands, and the desire to provide comprehensive care can present a complex array of pros and cons. Each therapist can weigh these factors and how they align with their mission when deciding whether to accept insurance or only self-pay clients. 

Why do therapists accept insurance?

Accepting health insurance for mental health treatment may increase a therapist's potential client base. For individuals seeking therapy, insurance coverage can be a crucial factor in their decision-making process. By accepting insurance, therapists can open their doors to a broader demographic who may not be able to afford mental health services otherwise. This broadened accessibility can lead to a more dynamic and diverse practice serving a vast clientele. 

However, accepting insurance through an insurance company may not only involve increasing client access. For therapists, it may also provide a more consistent income stream. Insurance companies often offer regular payment schedules for covered services, reducing uncertainty around client payments. With insurance handling part of the financial aspects, therapists can dedicate more energy to providing empathetic and compassionate mental health services.

Ways to accept insurance as a therapist 

As a therapist offering outpatient mental health services, there are two primary choices when accepting health insurance: joining an insurance payer panel or becoming an out-of-network provider. These choices carry varying implications for your practice regarding financial viability and the breadth of individuals you can serve.

Joining an insurance payer panel 

However, it may be crucial to weigh the complexities of this choice. While joining an insurance panel can attract more clients, it also necessitates dealing with insurance companies directly, an experience that may vary based on the companies you align with. Paneling may lead to extensive paperwork, delayed reimbursements, and being asked to justify treatment plans in line with insurance protocols. Therapists may balance these realities with their commitment to offering affordable therapy and consider whether this approach aligns with their practice and the mental health coverage needs of their clients. 

Becoming an out-of-network provider

Being an out-of-network provider means you have no direct relationship with insurance companies. Your patients pay you directly and seek reimbursement from their insurance companies. This model allows you more control over your rates and eliminates the administrative hassle associated with insurance billing. However, it may limit your patient demographics as some individuals may be unable to afford upfront costs or navigate the complexities of insurance reimbursement. It can be vital to carefully weigh these pros and cons in determining the best approach for your practice.

Pros and cons of accepting insurance 

The decision to accept insurance for therapists can be a double-edged sword, with both significant advantages and disadvantages. 

Pro: Reach a broader demographic

Accepting health insurance coverage may enable therapists to reach a broader demographic. Some clients who might not otherwise be able to afford therapy can access these crucial mental health services with the help of their insurance. Insurance coverage can make mental health support more accessible and democratize mental health coverage, which may align with the mission of some therapists.

Con: Administrative responsibility

Accepting insurance may create additional administrative burdens that therapists can prepare for. For example, navigating the complexities of insurance billing, claim filing, and dealing with potential denials may require more time. 

Insurers often dictate the number of sessions covered and the type of therapy that is reimbursable, which may not align with the treatment plan that the therapist believes is best for the client. However, therapists may eventually find a happy medium where they establish a routine that aligns with the demands of insurance panels. While it may take time, it can be possible to establish a sustainable process.

Pro: Consistent client flow

Another potential advantage of accepting insurance is consistent client flow. With people searching for therapists through their insurance provider's directories, being listed as an "in-network provider" can lead to a steady stream of referrals. This listing may keep your practice busy and financially stable while improving access to mental health services in your area. 

Con: Lower reimbursement

A potential disadvantage to accepting insurance is that insurance companies may reimburse less than therapists charge for out-of-pocket services. Compared to self-pay clients, insurance companies often have preset rates for different services, which may be lower than a therapist's standard rates. For this reason, a therapist may be paid less for their services when working with a client with insurance coverage.

Lower pay could result in therapists being under-compensated for their expertise and time. Furthermore, the unpredictability of reimbursements and payment delays may create financial strain.  

Pro: Improved access

Accepting insurance may reduce the stigma associated with seeking mental health support in your area. When insurance covers therapy, it's recognized as a standard health service, akin to visiting a doctor for a physical ailment. This visibility can contribute to a broader societal acceptance of and access to mental healthcare. It may also encourage clients to sign up for a plan on their state’s health insurance marketplace, increasing the amount of people seeking support. 

Despite the challenges, some therapists choose to accept insurance because they believe in making mental healthcare available to as many people as possible. However, therapists who decide not to accept insurance often do so after carefully considering and accepting this unique dynamic. 

Why therapists may choose not to accept insurance

There are several reasons why a mental health professional may choose not to accept insurance for therapeutic services, including but not limited to the following. 

Intentional clientele 

Therapists may choose not to accept insurance in hopes of the potential for a more intentional clientele. When clients pay out-of-pocket, they may be highly invested and committed to the therapeutic process, as they personally bear the cost. For this reason, therapists who accept out-of-pocket clients may attract those who are engaged and proactive in their sessions. However, it is possible for clients who use insurance to also be proactive in their sessions. 

Improved payment structures 

Not accepting insurance can lead to an improved payment structure for therapists. Insurance companies often dictate the rates mental health professionals can charge for their services, which can be lower than their standard rates. 

By not taking insurance, therapists have complete control over their finances, setting rates that they believe reflect the value of their expertise and time. They can also avoid the lengthy and often complicated procedures associated with insurance claims, allowing them to focus more on providing quality behavioral health services.

The ACA and The Mental Health Parity and Addiction Equity Act (MHPAEA)

The Affordable Care Act (ACA) brought about a significant pivot in the field of mental healthcare by making it a requirement for insurance plans to cover mental health and substance use disorder services. This inclusion recognized mental health as an essential component of overall well-being, equal to physical health. Furthermore, the ACA mandates insurance providers to offer medical and surgical benefits as well as behavioral health treatments like psychotherapy and counseling.

The Mental Health Parity and Addiction Equity Act (MHPAEA) complements the ACA by ensuring no restrictions or limitations on mental health benefits that are harsher than those applied to medical or surgical benefits. This legislation works to provide equal access to mental health and substance use disorder benefits, essentially creating a level playing field for mental health and addiction services when compared to the treatment of physical health problems.

Support options 

Clients seeking therapy may be faced with the decision of using insurance or finding a therapist they can afford. However, in-person therapists can be costly. In these cases, online platforms like BetterHelp may be more affordable for clients paying out of pocket and may offer financial support options. 

Online therapy platforms can often offer support under $100 a week, including extra benefits in their plans, such as complementary support groups, journaling prompts, and worksheets that clients can use alongside their weekly phone, video, or live chat therapy sessions. 

Online therapy, particularly cognitive-behavioral therapy (CBT), has demonstrated efficacy comparable to traditional face-to-face therapy. Online CBT enables individuals to engage in beneficial therapeutic practices from the comfort of their homes. In one study, it was shown that online CBT may be as effective as traditional in-person therapy in managing various mental health conditions, including anxiety and depression.