Finding the right therapist is hard. Finding one that takes insurance can be even harder.
Insurers are required to cover mental health care under the Mental Health Parity and Addiction Equity Act. Yet, almost a third of therapists still don’t accept insurance at all or limit the number of insured clients they treat. The ongoing therapist shortage, exacerbated by the pandemic, has made the hunt for a provider even more difficult. Therapists that do take insurance are often fully booked.
And accepting insurance has its perks, like widening access to a larger client pool.
So why would a therapist not accept insurance in the first place? It turns out, it doesn’t pay as much and can be a real hassle.
Low pay
A 2023 Government Accountability Office report concluded that low insurance reimbursement rates are one of the main reasons why mental health care has become so inaccessible. Therapists just don’t recoup their costs with insurance, so there isn’t much incentive to accept it.
The national average cost of a psychotherapy session is $100-$200/hour, varying based on state, licensure, specialty, and demand for services. While reimbursement rates aren’t publicly available, we do know that they are low, sometimes only a fraction of the cost to provide care.
For instance, fee-for-service Medicaid rates in 2022 for common psychiatry services, including psychotherapy, were only 81% of Medicare’s rates. And Medicare reimbursement rates for behavioral health are already low, hitting far below what other care providers are reimbursed for.
Providers who work with private insurance have voiced that reimbursement rates can be “insulting.” It also doesn’t help that rates haven’t significantly increased in decades.
Given the overhead costs of maintaining licensure and owning or participating in a private practice, these low rates are unsustainable. What’s more, salaried therapists in community rehabilitation centers often make even less, as little as $30,000 a year.
The end result is that the profession isn’t a financially attractive path to take, contributing to the therapist shortage.
Insurance is a pain to deal with, too.
Beyond the pay, the logistical challenges that come with insurance are another reason why mental health care providers often opt out.
For one, the administrative responsibilities add up. Filing insurance claims and advocating on behalf of a client requires a learning curve, all done in unpaid time. Getting credentialed with an insurance company is also time-consuming, and reimbursement isn’t immediate.
Insurers impact the care provided, too. For example, to receive reimbursement, therapists must make an official diagnosis. This can be problematic because mental health diagnoses are not always helpful for treatment. Clients may not even meet diagnostic criteria, especially during the first few sessions. Yet, diagnoses remain permanent in health records regardless.
Insurers can then also dictate how much care they will pay for, such as the number of sessions or the length of the sessions. Those decisions don’t always align with what the therapist and client know is necessary for healing.
The alternative: paying more out-of-pocket
For these reasons, clients are often left paying cash and seeking reimbursement from their plan for an out-of-network visit, if their plan even offers any out-of-network therapy coverage. Sometimes therapists offer sliding payment scales based on the client’s financial situation, for which an affordable rate is agreed upon by both the therapist and client.
Still, these options often mean higher out-of-pocket costs compared to having in-network insurance coverage or paying to see a primary care provider.
While mental health care parity is the goal, we are clearly far from it. To this day, insurers unlawfully delay and deny coverage, perhaps to encourage patients with chronic mental illnesses – who are more expensive to cover – to drop coverage or switch to another insurer.
We are in the throes of a mental health crisis as a nation. With care out of reach for so many though, solving the crisis feels unattainable. Paying mental health workers more, incentivizing insurance acceptance, and increasing reimbursement rates may alleviate some of the access burden.
Mental health has been undervalued as a profession, a policy priority, and an important part of overall health for far too long. The effects of unaffordable access to care are not going away, especially as demand for care grows and the workforce struggles to keep up. It’s time we listen to the voices of both those providing and receiving care, and treat mental health like any other form of care.
