Navigating the Complex World of Mental Health Therapy: Why Many Therapists Don’t Accept Insurance

By Keeley Seymour, LCSW, CEDS

4 min read

I have had a few conversations about how hard it is to find a therapist and one that accepts insurance.  A growing number of mental health therapists are opting not to accept insurance, leaving many clients questioning the reasons behind this choice.

Most therapists I know personally either do not accept insurance or are part of large practices that have long wait times to begin therapy.  In this blog, I will explore the complexities that therapists face when deciding whether or not to be in-network with insurance providers.

Why Mental Health is Not Covered by Insurance

1. Low Reimbursements

One of the primary reasons therapists often choose not to accept insurance is the issue of low reimbursement rates. Insurance companies typically set reimbursement rates for mental health services. Unfortunately, these rates are often significantly lower than the fees therapists charge for their expertise and time.

Low reimbursement rates can strain therapists financially, making it challenging for them to sustain their practices. To provide quality care, therapists may charge higher fees, which many insurance plans do not fully cover. This financial gap often leaves therapists with the difficult decision of either accepting lower payments or opting out of insurance networks.

To give an example – reimbursement rates for a 50-minute therapy session tend to vary between $60-100 per session.  The 50 minutes is the time spent individually with the client but does not include all the other responsibilities of the therapist, including but not limited to:

• Writing notes
• Treatment planning
• Collaborating with other providers
• Preparing for sessions
• Receiving supervision
• Billing
• Performing other administrative tasks

Logistically, it’s tough for a therapist to see more than 25 clients per week in a 40-hour workweek without compromising care or neglecting administrative tasks.  

Most therapists cannot sustain the reimbursement process on their own, so they join large practices to receive enough client referrals along with billing and administrative support. Most large practices charge a fee for overhead of a certain percentage per session, leaving the therapist with less net income.

2. Difficulty with Getting Paid

Another significant factor that dissuades therapists from accepting insurance is the administrative burden associated with insurance billing. Navigating the intricate world of insurance claims, pre-authorizations, and billing can be a time-consuming process for mental health professionals.

Therapists often face delays in receiving payments from insurance companies, leading to cash flow issues for their practices. The paperwork and administrative tasks required for insurance reimbursement can divert therapists’ focus away from their primary goal—providing effective therapy to their clients. As stated above, this can be the reason many therapists join larger practices if they want to accept insurance. However, their net income then reduces to usually between 50% and 60% of the gross revenue earned for the practice.  

3. Limited Autonomy in Treatment Planning

Being in-network with insurance providers can also limit therapists’ autonomy in developing personalized treatment plans for their clients. Insurance companies may impose restrictions on the number of sessions covered, dictate the types of therapies allowed, or require extensive documentation to justify ongoing treatment.

These limitations can hinder the therapeutic process, as therapists may feel pressured to conform to insurance guidelines rather than tailoring their approach to the unique needs of each client. Many therapists prefer the flexibility of operating independently to ensure they can provide the most effective and individualized care.

In theory, care in private pay practices can be of higher quality than insurance-based practices (although obviously, it varies from therapist to therapist). This is because care is dictated by the insurance company as opposed to treatment plans being individualized by the licensed, trained therapist.  

4. Privacy Concerns

Insurance billing requires therapists to disclose sensitive information about their clients, including diagnoses and treatment plans. Some clients may be uncomfortable with the idea of their personal and mental health information being shared with insurance companies. Therapists who prioritize client confidentiality and privacy may choose not to participate in insurance networks to safeguard their clients’ trust.

While mental health therapy is a vital component of overall well-being, the decision to accept or decline insurance is a complex one for therapists. The challenges associated with low reimbursements, difficulties in getting paid, limited treatment autonomy, and privacy concerns contribute to therapists opting out of insurance networks.  Many therapists that are in-network with insurance panels often discuss the sustainability of accepting insurance long term.

It’s important for clients to understand that this decision is made to ensure therapists can maintain sustainable practices and provide the highest quality of care. Ongoing conversations and collaborative efforts between mental health professionals, insurance companies, and policymakers can help find solutions that benefit therapists and clients.  Unfortunately, unless we address the systemic issues of access to mental health care, therapists have little ability to improve access on an individual level.

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