Paying for Therapy
Tips for Paying Out of Pocket
It helps to know what to expect. In Sacramento, if you want to see a skilled, experienced, licensed therapist, you should generally expect to pay at least $125 per session for weekly therapy - and possibly more. Rates for private practice psychotherapy in Sacramento can range between $125 to $150 or more per session depending on a therapist's discipline and experience level. The average rate statewide in 2015 according to a California Association of Marriage and Family Therapist report was $146.86.
When budgeting for therapy, you should generally expect to meet once weekly with your therapist (minimum) and you should plan to incorporate this expense into your monthly budget for three months or longer. You can use a Healthcare Spending Account (HSA) or Flexible Spending Account (FSA) to use pre-tax dollars to pay for therapy. Psychotherapy can also count toward your medical expenses on your income taxes, although usually your total annual healthcare expense typically must exceed a certain percentage of your adjusted gross income to receive a deduction (please consult your tax advisor to clarify).
If you need a reduced fee, always ask. Even experienced therapists sometimes offer sliding scale rates based on income or ability to pay. Some clinicians offer reduced fees for people who come for multiple sessions per week.
For further reduced rates, you might consider seeing a skilled pre-licensed or newly licensed therapist. These clinicians generally offer a lower sliding scale and you can expect fees to range from approximately $40 to $90 per session. I’d be glad to recommend highly skilled Associate MFTs (finished with graduate school and well into working on their 3000 hours under a licensed clinician to themselves become licensed) or MFT Trainees (in their last semesters of graduate school) or newly licensed clinicians.
Using Health Insurance to Pay for Therapy Services
Dealing with health insurance companies can be frustrating for both the client and the therapist. I know first hand on both sides of the therapist and the being a client myself. I totally understand wanting to use a service that many people pay high premiums monthly for said benefits. Unfortunately, many therapists choose not to take some insurances as they find that insurance agencies will reduce the therapist's usual and customary fee, delay reimbursements, provide burdensome paperwork, restrict/limit the amount of treatment, or limit the amount of therapists to be approved on their in-network panel. Here is some information so you can be as informed; this information can be general so please consult your insurance representative for the most accurate information based on your plan(s).
Limitations of Coverage
Many insurance companies will only authorize services that they believe are “medically necessary.” Most health insurance plans require ongoing paperwork and justification for therapy, at times approving only ten or less sessions at a time. It is important to understand that neither you nor your therapist determine the length or frequency of your psychotherapy - that’s up to your insurance carrier. As well, some insurances will not cover relationship (couples or family) therapy because they consider it a relational therapy versus “medically necessary.” Be sure to understand what limitations are found in your insurance.
In order to justify your treatment, your therapist must provide your insurance company with a mental health diagnosis and sensitive personal information about your therapy which will go into health insurance files that can be accessed by numerous gate keepers, utilization reviewers and other employees.
If you and your therapist have in the back of your minds that what you are saying/doing in therapy can be discussed with your insurance company and affect whether your treatment is covered, then everyone is on guard. Such a climate is counterproductive for the success of your therapy because for therapy to work, you need to feel you can be honest and speak freely.
In addition, your mental health diagnosis and treatment records may count against purchasing things like self-employed private insurance or life insurance coverage as it become part of your general medical record.
Restricted Choice of Providers
The provider restrictions differ for PPO/POS plans and HMO plans, and are described below.
PPO or POS Plans
If you have a PPO or POS plan, you tend to have the most flexibility and are fortunate. You can either choose a therapist from the “Preferred Provider” or in-network list of your health insurance company, or you can choose an out-of-network therapist. The reimbursement rate will be higher if you choose from the in-network panel and could be lower if you choose an out-of-network provider.
One caveat to consider is that PPO plans tend to reimburse based on what they call “usual & customary” fees. But the insurance plan determines what fees are “usual & customary” and generally these fees are not representative of actual psychotherapy fees. From the same survey noted above, in 2015 the average reimbursement was $101.81 in the state. Despite that quoted average, many well known insurance companies have been paying well under that rate in the Sacramento area and what I have seen from colleagues is more like $66 to $86 reimbursements.
For example, an insurance company may determine your benefit for therapy with an LMFT at a "usual & customary" fee of $80 per session and pay some percentage of this fee. The problem is that in Sacramento, a fee of $80 is neither usual nor customary. As noted above, an actual LMFT’s fee might be $125-150 per session, with the average statewide fee being $146. If your PPO plan pays 50% of each session, they’ll do this based on the “usual & customary” fee that they determine. So in this example, instead of paying 50% of the rate you are charged (i.e., let's go with my normal fee of $120), the insurance plan will reimburse $40 per session (50% of $80, their “usual & customary” fee) and you will be responsible for paying the remaining $80 per session. If their usual and customary fee is even lower, you pay more.
PPO plans will also sometimes reimburse up to a covered rate by accepting a Super Bill from an out of network licensed therapist (very rarely are pre-licensed therapist fees reimbursed). In this scenario, you would pay the therapist their typical fee and they would give you a Super Bill that gives the insurance company information they need to determine if they will reimburse you per the plan’s agreement for out of network therapists. Again, you’d want to talk with an insurance representative to see about that possibility.
If you have an HMO plan, you are required to choose a provider who is on your insurance panel. Keep in mind qualified therapists may be choosing NOT to participate on managed care health insurance panels or are severely limiting their participation because the reimbursement rates can be low, the paperwork time consuming, and the coverage limited and tightly managed, and the involvement of the insurance company can make it difficult for both you and your therapist.
Finding an effective therapist who is the right fit for you is hard enough. Finding one on your insurance panel may be even harder and will likely require some effort on your part, which can be frustrating and disappointing. It’s worth the effort though, because seeing an ineffective therapist can make problems worse and leave you feeling more hopeless and disheartened.
Tips for Choosing a Therapist Covered by Your HMO
If you prefer to or simply must use your HMO insurance, you can request a list of providers through your insurance company. An online list of providers is often available. Once you obtain this list, it is suggested that you ask friends, your physician or a therapist whom you respect to recommend providers on the list. Some of the providers on the list may also have websites where you can learn more about them and see who appeals to you. When you meet with a therapist on your insurance panel, or any therapist for that matter, ask questions and only go back if it feels like a good fit.
More and more insurances have deductibles you must meet prior to any benefit kicking in and these deductibles are usually yearly reset. It is always important to know how much you must pay into a deductible before the insurance company will start to provide the benefit they state they offer. For example, if one’s insurance state they will pay 50% of the usual and customary rate after their $1000 deductible is met, that means you must first pay the full fee of your therapist until you hit that $1000 cap before they start to pay anything toward the fees. If you don’t secure what your deductible is and your therapist is not paid by the insurance agency because of this deductible, you are responsible for previous fees.
Insurance Bottom Line
Before opting to use your insurance, you might check to see if must see an in-network therapist, can you be reimbursed for an out-of-network therapist, how many sessions would be covered by your insurance plan, what deductibles you must meet, what the coverage percentage of reimbursement is, and what co-pay or co-insurance rate you must pay to make sure that using your insurance feels worth your while. You want to evaluate whether the actual financial benefit outweighs the downsides of compromising your privacy, choosing a limited coverage that may not meet your treatment needs, and perhaps most importantly, restricting your choice of providers.
What Mike Can Do To Try To Help with Fees and Insurance
I am happy to talk to you more about what may be possible. Currently I am paneled with the CA Victim of Crime program, ComPsych Behavioral Health & Employee Assistance Program (EAP/Behavioral Health), Charles Nechtem Associates EAP, Claremont EAP, HMC HealthWorks (Behavioral Health, EMAP, and EAP), Centerstone Military Services, Veteran's Choice Program - Triwest, and can provide Super Bills for you to ask reimbursement from other insurers who may or may not reimburse you (again, please connect with your insurance to find out). I also have a small sliding scale based off of your household income that at times may help reduce my regular fee.
Some people elect to forgo using their insurance because they find that the limitations outweigh the benefits. They choose to incur the out-of-pocket expense for therapy to ensure their privacy as well as to ensure that they are with a skilled therapist of their choosing for as long as their treatment requires.
CAMFT Study noted: https://www.camft.org/images/PDFs/articles/mariam/2015_demographic_survey.pdf
PS - Answering the question: Why do therapists charge "so much?"
One last thing I can offer is an attempt to answer a question that sometimes people ask of "why do therapists charge so much?" People might even think things like, "man, if I made $120 per hour I'd be rich." Yet there are many costs that play into the therapist's fee that can help one understand that the fee charged is not close to what the therapist actually makes. As well, many therapists take a range of fees, sometimes offering some sessions at a reduced sliding scale, other sessions through a temporary reduced EAP contract fee, or keeping some spaces open to lower or pro-bono fees. A blog from PsychCentral clarifies more of what goes on behind a private practitioner's development of their typical fee. To learn more, please go to https://psychcentral.com/blog/why-do-therapists-charge-so-much/ Please note, I ultimately did not get into this field to "make it rich" but rather to help people. Despite the need to provide for my family as their sole provider, I make efforts to reduce my fees when I can based on income, offer options to see me through some insurances/EAPs, offer some spaces to very low paying to probono when I have space, and provide contacts and referrals to other therapists that can provide even lower fees than I charge. Being a client on the couch myself both with my own therapy or with medical doctors I understand the challenges and frustrations of finding care in our health system. Please feel free to talk with me so I can be of help to find resources on how to help you irregardless of cost factors. Thanks!