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Deciding How and What to Pay for Therapy

Deciding How and What to Pay for Therapy

Before you can choose a therapist, you have to decide where you're going to get therapy and how you're going to pay for it. This decision can be difficult and confusing, compounding the issues that made you want to get therapy in the first place. Maybe you've wanted to find a way to fight less with your spouse, but now you're arguing about how you're going to pay for therapy. Or maybe you've been slipping into a depression and wanted to talk to someone before it got any worse, but your mood slipped further when you realized how little wiggle room you have in your budget and fell into decision paralysis.


If you're having trouble figuring out how to pay for therapy, you're not alone. Research shows that the high cost of therapy, lack of insurance coverage, and not knowing where to get treatment keep many Americans from getting mental health care. If you've been discouraged by your first attempts to find a therapist who accepts your insurance, who charges rates you can afford, or who doesn't have a long waiting list, you may feel ready to give up on getting the help you need, but don't give up just yet.


Even though the struggle to connect to care in our broken system is real, it's a mistake to think you have no other options besides paying too much for therapy or not going at all. You have more options than you realize, and our mission at OpenCounseling is to help you understand what they are. Too many people stop trying to get help after looking through lists of therapists in private practice without looking into less familiar options like affordable clinics, non-profits, the public mental health system, or online therapy.


In addition to not knowing about local providers that offer low-cost or free therapy, many people don't realize they have more ways to cover care besides private insurance plans or high out-of-pocket hourly rates. In this article, we'll review your different options for paying for care so you can find the best option for your budget and life circumstances.


What Are the Different Ways to Pay for Mental Health Care?


In general, there are three ways to pay for mental health care in America:

  • Public health insurance
  • Private health insurance
  • Out-of-pocket payment


However, there are options that don't neatly fit in these categories, like veterans' insurance, grant-funded veterans' programs, charitable organizations, special services for specific groups (such as people who are homeless or trauma survivors), faith-based or pastoral care through local churches and spiritual organizations, and non-profit programs.


These options can link people with low-cost or even free care without needing them to have or use insurance. Many organizations receive donations, grants, or public funds that allow them to offer discounted or free mental health care to anyone who needs it regardless of their ability to pay. Even when you can't find a free clinic in your area, you may be able to find a clinic with affordable sliding-scale fees where you can pay $20 or $30 per session instead of $200 or more.


One of the most poorly understood options for mental health care is the public mental health system. Starting in the 1960s, states began shifting away from institutional care and focusing on community-based programs. Public mental health clinics serve people who need help during a mental health crisis or need care they can't afford to get through the private sector. While these programs are primarily funded by Medicaid, they often take other forms of payment, have affordable sliding-scale fees, and receive grants or funding assistance that allows them to offer free or inexpensive therapy to people who are uninsured.


Who Can Use the Public Mental Health System?


The public mental health system makes it possible for people to access mental health care who otherwise could not. The primary focus of the public mental health system is to provide a safety net for people with severe conditions and care for people who are living in poverty. Each state runs its own program, and the amount of funding and available services vary from state to state. Some states have stricter eligibility requirements for their public programs than others do.


In some states, public mental health services are restricted to people who have a serious mental illness (SMI)—a mental health condition that affects their ability to function and puts them at risk of hospitalization. Other states restrict public mental health services to people with low incomes. Others separate clinical and financial eligibility requirements, and some allow people who have moderate mental health conditions to pay out-of-pocket for public mental health care, often at lower rates than they would pay to see a therapist in the private sector.


One of the most important services the public mental health system provides is a crisis response system. Most states have county or statewide crisis lines residents can call to quickly access mental health care when they are in crisis. Most of them double as information lines for people seeking non-emergency referrals. You can call your local crisis line to find out whether you're eligible for publicly-funded mental health care and to get referrals to other affordable clinics and non-profits if you're not eligible. There is no charge for speaking to someone on a crisis line.


We are researching and writing articles on each state's public mental health system. We hope to complete the project by Summer 2020. If we haven't yet covered your state, you can use a search engine to search for terms like "public mental health system in [your state]" or "mental health crisis line for [your city, county, or state]." You should be able to quickly find a page with the number for your area's mental health crisis hotline. We highly recommend using this important resource, especially if you've gotten stuck in your search.


How Do I Get Mental Health Care with Private Insurance?


There are three steps to paying for therapy with private insurance:


  1. Find out if your private insurance plan covers therapy by reviewing your plan documents or contacting your insurer's customer service number.
  2. Once you've confirmed that your insurance plan covers therapy, use your insurance company's website or another search method to generate a list of local mental health providers who are in your insurance plan's network.
  3. Narrow down that list to one or more providers who meet any other requirements you have and reach out to them to set up an initial or trial session.


The 2008 Mental Health Parity and Addiction Equity Act (Parity Act) and 2010 Patient Protection and Affordable Care Act (ACA) made it harder for insurance plans to exclude or unfairly limit mental health coverage. This doesn't mean your insurance plan meets their requirements, though. Some older insurance plans that don't meet ACA requirements are still offered by employers as "grandfathered" plans. Small employers are exempt from some ACA requirements and may not offer mental health coverage (or any coverage at all). Sometimes, insurers falsely or erroneously deny mental health claims they should have covered, requiring people to have to appeal denied claims or otherwise fight to get them covered.


People who have private mental health coverage sometimes find that there are no providers in their area who accept their insurance plan or that there are a limited number of in-network providers and that all of them have long waiting lists. If this happens to you, there may be another way to use your insurance to cover your care. Some insurance plans offer out-of-network (OON) benefits that allow you to pay a higher co-payment or coinsurance rate to see an OON provider than you'd pay to see an in-network provider, but for significantly less than you'd pay to see that provider without insurance.


If you have a plan with out-of-network coverage, you usually have to pay your therapist the total amount they bill for a session at the time the bill is due, then submit the bills or claims to your insurance company for reimbursement. Some therapists who don't otherwise accept insurance are willing to help with OON claims, while some refuse to do any insurance-related paperwork. In many cases, therapists don't need to do anything to help you with OON claims, but sometimes they do. If you want to cover your care with OON benefits, it's important to talk to your insurance company and your therapist first to confirm that you can.


How Do I Get Mental Health Care with Public Insurance?


The two major public insurance plans in America are Medicare and Medicaid. Both offer mental health coverage. In fact, Medicaid covers many types of mental health care that private insurance plans don't cover, including intensive services for people with serious mental illness. Medicare offers less extensive mental health coverage than Medicaid, but it does cover therapy and many other mental health services. You can read our articles on Medicare and Medicaid to learn more about how these plans work and what types of mental health treatment they cover.


In most states that accepted Medicaid expansion, people no longer have to have a disability or be a member of a special group to qualify for Medicaid, but only need to have a limited income. If you work but don't have employer-based insurance, you may qualify for Medicaid based on your work income, especially if you're underemployed or working part-time. You can check your state's Medicaid page to find out the eligibility requirements for people where you live. Most people qualify for Medicare after they turn 65, though you may qualify earlier if you have certain medical conditions or disabilities.


The challenge with using Medicare or Medicaid to cover mental health care is finding a provider who accepts your insurance. Even fewer private practice therapists accept Medicare or Medicaid than accept private insurance. However, many non-profit mental health clinics and publicly-funded mental health providers accept Medicare, and even more accept Medicaid. If you run into a dead end looking for in-network private providers that accept Medicaid or Medicare, look into local non-profit clinics or your state's public mental health system.


If you have Medicare or Medicaid, you can find search tools and provider directories on your plan's website. If you have Medicaid, your plan may be administered by a Medicaid managed care organization (MCO), in which case you will need to log in to your MCO's website or call their customer number to get a list of in-network providers. If you're not sure who administers your plan, check your card and start with the number or website listed on it. If you have Medicare Part C, Medicare Advantage, or a Medigap plan, you may be able to see providers who don't accept Medicare Part B but who accept plans from the private company that governs your plan.


What Are My Options for Mental Health Care if I Don't Have Insurance or Don't Want to Use It?


If you don't have insurance, you may have other options beyond paying expensive hourly rates for therapy. Many states' public mental health systems use general and other funds to help cover care for people who don't qualify for Medicaid. These programs make it possible for people to see a therapist for no or very little cost, though they are often limited to people with serious mental illnesses. To find out if your state has such a program and to learn whether you qualify, you can call your state or county's mental health crisis and information line.


At OpenCounseling, we've spent years building an exhaustive searchable database of local non-profits, public programs, and affordable counselors. We are proud of our work and encourage you to start your research with us. However, we know that new options may be available that we haven't learned about or added yet, or that we otherwise might not have every local option for your area listed in our database.


If you're not finding what you need on OpenCounseling, two other great places to go to find out about local mental health non-profits, charitable organizations, and programs are 2-1-1 and your local branch of the United Way. You can also call public mental health crisis and referral lines or go to local mental health walk-in centers to get referrals to affordable local programs.


If you don't qualify for special funding through a local charity, a veterans' program, or the public mental health system, you may still be able to utilize these services for significantly lower self-pay rates than you would pay to see a therapist in private practice. Consider doing your own research online or reaching out to private practice therapists to ask if they know of therapists or programs in your area that offer free or low-cost counseling. Some therapists in private practice participate in programs that allow them to see people for little to no cost, such as Give an Hour or Maryland's Pro Bono Counseling Project. Others have sliding fee scales based on income.


Which Option Should I Choose?


There are times it's worth paying more for therapy, and there are times you simply can't. In either case, it can be more challenging to know what to do when you have multiple options than when your options are limited. If you're deciding between a few competing choices, here are some things to consider to help you make your decision:


  • Are you in an emotional or mental health crisis?
  • Do you have other reasons you need to start therapy right away, such as an important event, decision, or transition that's coming up soon?
  • Do you have a diagnosed mental health condition that requires a special style of therapy to effectively treat?
  • Do you otherwise have a strong preference about the type or style of therapy you want to get?
  • Would you have to give up important daily necessities to pay for therapy, or could you budget for it by sacrificing something nonessential?
  • Do you have time in your schedule for therapy right now or will you need to get through a certain time of year or complete an ongoing obligation before you'll have enough time?
  • Do you have the time and resources to commute to therapy, or do you need to choose a therapist whose office is located within a certain radius of where you live?


Questions of timing can help you decide whether it's worth it to get on a waiting list for a therapist who accepts your insurance or who seems like a better match. If you're in an immediate crisis that makes you feel unsafe, unable to care for your basic needs, or at risk of harming yourself or others, definitely use your local crisis line! However, not all personal crises are acute, and if you've been struggling to adjust for a while and need a specific kind of care to address the issues you're facing, you might be better served to wait a little while for the right therapist than to go to the person with the first available appointment.


If you're already struggling to cover your bills, you may not be able to afford any options that require out-of-pocket expenses, or you may be able to set aside just enough to cover a discounted fee. Sometimes, you might be able to sacrifice a nonessential expense for a while. Just keep in mind that therapy isn't just what happens in your therapist's office, and it may be counterproductive to stop going to other activities that are good for your mental and physical health in order to go to therapy. Don't be shy about advocating for yourself to potential providers or being creative in who and how you ask for help. You matter!


If you're struggling to find an option that works for you, think outside of the box. Online therapy is an affordable option that offers many perks that traditional therapy does not. When you get online therapy, you don't have to spend time or money commuting to a therapist's office. It's easier to fit online therapy into a busy schedule. And it's not just convenient—it's clinically effective. If you think online therapy might be the best choice for your budget and schedule, you can start online counseling right away at BetterHelp (a sponsor). Whatever you choose, the next step in your journey to better mental health may only be a call or click away.

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Stephanie Hairston, MSW
Posted on 11/05/2019 by Stephanie Hairston, MSW

Stephanie Hairston is a freelance mental health writer who spent several years in the field of adult mental health before transitioning to professional writing and editing. As a masters-level clinical social worker, she provided group and individual therapy, crisis intervention services, and psychological assessments. She has also worked as a technical writer for a medical software company and as an editor for a company that appeals denials of insurance coverage for behavioral health treatment. As a writer, she is motivated by the same desire to help others that brought her into the field of social work and believes that knowledge is one of the most essential recovery tools. She strongly believes in the mission of OpenCounseling and in making therapy accessible for everyone.