Does Insurance Cover Therapy?

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The affordability of mental healthcare is a significant consideration for individuals contemplating seeking professional help. How much of the expense will insurance cover? Will it be difficult to find a provider who takes insurance? How do I even decipher what my insurance plan says?

How Much Is Therapy With Insurance?

The cost of therapy, when insurance helps pay, depends on what kind of health insurance plan you have. “Behavioral Health,” the service under which therapy falls in health insurance coverage, ranges from no coverage to full coverage, depending on your plan.

You might think that the more you pay in premiums each month, the less you’ll have to pay out of pocket, but this is not true in many cases. If you plan to utilize insurance to cover mental health costs, it’s worth delving into the specifics of the plans available to you.

A 2020 study published in Health Affairs analyzed more than 90 million health insurance claims for therapy between 2007 and 2017 and found that the average cost for those with insurance was about $21 for in-network care and about $60 for out-of-network care.¹

How Much Is Therapy Without Insurance?

Many therapists don’t take insurance at all, requiring patients to pay out of pocket for their care. This means there’s a higher demand for most therapists who do accept insurance, which could equate to longer wait times, depending on where you live. One study estimated that only about 55 percent of psychiatrists accept insurance.² It’s not known what percentage of therapists accept insurance and what the average rate would be for those who don’t. The approximate price is thought to be between $100 to $200 per session, but it can run much higher and occasionally lower, depending on where you live.

To try to come up with an approximation, we went through the Psychology Today Therapy Directory and reviewed the cost of therapy and whether therapists took insurance in five cities or towns across the world, comprising 151 therapy practices in total.

• In New Canaan, CT, a suburb of New York City, we found the average cost of a session to be $194, with 33 percent of therapists accepting insurance.
• In the eastern neighborhoods of Los Angeles, the average cost for a session was $172, with only 22 percent of therapists accepting insurance.
• In Louisville, KY, the average session came to $119, and 63 percent of practitioners accepted insurance.
• In Toronto, the average cost of a session was $157 (Canadian), and 28 percent of clinicians accepted insurance.
• A sample of clinicians in London showed an average session costs about £77 and only 22 percent of therapists accepted private insurance.

This is, of course, a rough estimate, but it offers some insight into the variations in the cost of therapy and how frequently insurance is accepted in different locales.

Can You Get Reimbursed Through Insurance?

If you choose to go to a therapist outside of your network, that is, a therapist who doesn’t accept your insurance, you can still get some of the cost reimbursed by your insurance company through some plans. When it comes to therapy, patients are three to six times more likely to see a provider outside their network, likely because only some clinicians offer insurance, and those who do are in high demand.

To receive reimbursement for out-of-network services, your insurance will likely require a "superbill." A superbill is a document that serves as a detailed invoice for the services provided during a therapy session, in essence, a receipt. It contains all the necessary information required by insurance companies to process reimbursement claims, including the diagnostic codes the clinician supplies for your care. Your insurance company wants to know why you needed the health services, and these codes validate what treatment is necessary.

Make sure to request this from your provider to submit to your insurance company and then follow up with your claim as necessary.

Insurance Outside the U.S.

Canada has a publicly-funded healthcare system that covers all citizens of the country. Called “Medicare,” most inpatient and outpatient services are free or subsidized, however mental healthcare is often only partially covered, and in some cases, not covered, depending on the province. As many as 67 percent of Canadians purchase private insurance in order to cover expenses like behavioral health, prescription drugs, and services.

In Great Britain, the publicly-funded National Health Service (NHS) offers free healthcare for all residents, including mental healthcare. Wait times can vary, however, and about 10 percent of residents buy supplemental insurance for faster access to care, including mental health care.

In Australia, citizens are covered by a publicly funded system, also called “Medicare,” which covers all hospital visits and offers some coverage for other services, including mental health care. Approximately half of Australians have private health insurance, which offers additional coverage for mental health care and private hospitals.³

What You Should Know

The world of health insurance can be byzantine, but some basic knowledge will help.

• Know the terms. Your health insurance company likely has a glossary of definitions on its site to define any term you don’t understand.
  • A deductible is the amount you pay for covered healthcare services before your insurance plan starts to pay. A deductible is the limit of your plan. Once you hit your deductible, your insurance plan will cover further health expenditures for the year unless a specific service includes a copay or coinsurance.
  • A copay is a fixed amount you pay for a covered service after you've paid your deductible.
  • Coinsurance is the percentage you’ll pay for treatment if you have reached your deductible. Plans often have different coinsurance percentages depending on if your provider is in-network or out-of-network (these are higher out-of-network). If your coinsurance is 10% for an in-network therapist and the cost of therapy is $100, this means you’ll pay $10 a session after you’ve met your deductible.
  • In-network vs. out-of-network. Insurance companies make deals with providers to include them in their insurance plans. Those who are in a plan’s network will accept your insurance. You will still be responsible for payment, but it will likely be lower depending on your plan’s specifications. Practitioners who are out-of-network will have to be paid out of pocket by you. The difference is that your insurance plan will likely only offer a reimbursement, or, if you’ve met your deductible and your plan allows for it, will contribute coinsurance or a copay.
• Know what your benefits are before you look for a therapist. Having an idea of what your plan covers or doesn’t cover will help you budget for the cost of treatment.
• Check to see if your therapist is in-network. Sites like the Psychology Today Therapy Directory allow you to sort therapists according to which insurance they accept. Your health insurance company, too, will have a searchable list of providers in its network. When you reach out to a therapist, double-check whether they still accept your insurance.
• Find out if you’ll need prior authorization from your insurance provider for out-of-network reimbursements. Also called “preauthorization” or “precertification,” some insurers require you to check with them for approval of whether or not behavioral healthcare or medications will be reimbursed for out-of-network providers.

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Therapy can be a powerful tool in helping you work through and cope with challenges in your life and help you be the best version of yourself. But it’s not without a cost. Understand what your insurance covers and be prepared to budget accordingly. If you find the cost is prohibitive, don’t give up. Consider asking for sliding scale payments or exploring other strategies for finding lower-cost care.

To find a therapist near you, visit the Psychology Today Therapy Directory.