What Your Therapist Wishes You Knew About Insurance (Part 1 of 4): Why Therapy and Insurance Are Complicated
This is Part 1 of a 4-part series on using insurance for therapy.
Part 1: Why Therapy and Insurance Are Complicated (you are here)
Part 2: In-Network vs Out-of-Network — What's the Difference?
Part 3: Why You Might Get a Surprise Bill — Even With Insurance (coming soon)
Part 4: When Insurance Isn't an Option — Other Ways to Make Therapy Work (coming soon)
If you've ever tried to use your health insurance to pay for therapy and walked away confused, frustrated, or with more questions than answers, you're definitely not alone. Insurance and mental health care have a complicated relationship.
Health insurance was created as a way to help people get emergency care. Over time it’s evolved to the system you know today, where you see a medical professional, either in an emergency or on an as-needed basis, and insurance might cover all, some or none of the costs. Mental health care is ongoing; you see your PCP once a year, but your therapist might see you every week. It’s a different treatment model than what insurance was designed to do, but therapists try to make it work so that our clients can use their benefits.
As a therapist in San Antonio who works with insurance and also offers out-of-network options, I want to talk about the relationship between therapy and insurance. Not to vent, and not to talk you out of using your benefits. I genuinely believe that understanding how this system works will help you make better decisions about your care.
Therapy Billing Isn't Like Regular Medical Billing
When you use insurance for a routine medical appointment, like a visit to your primary care doctor, the process is relatively straightforward. You go to your appointment, they bill your insurance policy, and you pay a copay.
Mental health care works differently, and there are a few specific reasons why.
A Diagnosis Is Required
In order for an insurance company to cover therapy sessions, your therapist must give you a diagnosable mental health condition, the most common of which are going to be Generalized Anxiety Disorder, Major Depressive Disorder, or PTSD. That diagnosis then has to be included in every claim submitted. That diagnosis becomes part of your permanent medical record and can sometimes affect life insurance, disability insurance, or certain employment applications down the road.
Further, companies want that diagnosis on your intake appointment. If you come to me with a diagnosis you’ve gotten from another provider, we will use that one to avoid adding another diagnosis to your file or risking a diagnosis that’s incorrect. Some companies will let us use a diagnosis called “Adjustment disorder” for up to 6 months, so that is usually what I will use while we work on your long-term diagnosis.
But whatever diagnosis you use to file claims, it will be part of your medical record, which can be complicated for folks who work as first responders, in the armed services, or have security clearance. If a diagnosis can negatively affect your career prospects, it’s worth considering skipping the insurance claim and just paying out of pocket.
This doesn't mean you shouldn't use insurance. But it's something worth knowing before you do, especially if you're coming to therapy for personal growth, relationship support, or general stress management rather than a specific clinical condition.
Insurance Companies Can Influence Your Treatment
Depending on your plan, your insurer may:
limit the number of sessions covered per year,
require pre-authorization before treatment begins,
or request clinical notes to determine whether continued therapy is "medically necessary."
In some cases, they can and do deny coverage for sessions your therapist believes you need.
Companies can also dictate how long your sessions can be. Most therapists are trained to provide treatment in an hour, 60 minutes. The billing codes for therapy include a 30 minute session, a 45 minute session, or a 53 minute session. An insurance company can decide that they do not pay for 53 minute sessions, which means you are getting less of your therapist’s expertise.
As a clinician, I am trained to determine what level of care is appropriate for my clients. When a third party can override those clinical decisions, it creates real tension between what's best for you and what's covered.
Many claim denials are things that either you or your therapist can refute. But the system is designed to make that complicated and time consuming. Most therapists in a small or solo private practice won’t have the administrative time to fight a denial, and clients get confused or run-around.
Reimbursement Rates Affect Who You Can See
Insurance companies set the rates they'll pay therapists who are in their network. Those rates are often significantly lower than a therapist's standard fee, sometimes by half or more.
Many experienced therapists in private practice choose not to accept insurance, or limit the number of insurance clients they see, because the reimbursement rates make it financially unsustainable to run a practice.
This is one of the reasons you may find it harder to get an appointment with an in-network therapist and the ones who do take insurance often have long waitlists as a result.
This Doesn't Mean Insurance Isn't Worth Using
None of the above is meant to steer you away from your benefits. Insurance can make therapy significantly more affordable, and for many people it's the difference between getting help and not getting help.
What it does mean is that going in with a clear understanding of how the system works, rather than finding out the hard way mid-treatment which can put you in a much stronger position.
In Part 2, I'll break down what "in-network" and "out-of-network" actually mean in practice, and how to figure out which option makes more sense for your situation.
Questions? Let's Talk.
If you have questions about how payment and insurance work at Mindful Kindness Counseling, I'm happy to walk through it with you. The free consultation call is a great place to start.
Request a free 15-minute consultation call →
Bonnie Scott is a Licensed Professional Counselor-Supervisor (LPC-S) in San Antonio, TX. She offers individual therapy, couples counseling, and LGBTQ+ affirming care in person and via telehealth throughout Texas.
