What’s the Difference Between Insurance and Private Pay Therapy?

If you are looking for a therapist, you are probably wondering how much therapy costs and how payment actually works. Some therapists take insurance directly, which means you pay your copay and insurance covers the rest. Other therapists are private pay only, which means you pay the full session fee yourself.

We’re a private pay practice, and there’s a reason for that. While insurance can make therapy more affordable upfront, it comes with trade-offs that most people don’t realize until they’re already in the system. Here’s what you need to know to make a decision that works for you.

When a therapist is “in network” with your insurance, they’ve agreed to accept the insurance company’s rates and follow their rules. You pay your copay at each session, usually somewhere between $20 and $60, and insurance covers the rest.

The lower cost is appealing. But there’s a lot happening behind the scenes that affects your care.

Insurance companies require a mental health diagnosis to cover your sessions. That diagnosis goes on your permanent medical record and stays there. For most people this doesn’t cause problems, but if you’re in certain careers like law enforcement, healthcare, military, finance, or anything requiring security clearance, having a mental health diagnosis on file could complicate things down the road.

Insurance also gets a say in your treatment. They decide how many sessions you are approved for, and your therapist has to justify continuing if you need more. Some plans limit you to specific types of therapy or require pre authorization before you can start. Even when a therapist recommends a certain pace of care based on your needs, insurance may limit how often sessions can happen or how long your therapy lasts.

The other thing most people don’t realize is that insurance companies can request your therapy records. They usually don’t, but they have the right to. Your therapist might also be required to submit progress notes or treatment plans for review. That means what you talk about in session isn’t completely private between you and your therapist.

And then there’s the therapist shortage problem. Because insurance reimbursement rates are low, many experienced therapists don’t take insurance at all. The ones who do often have waitlists months long or are stretched thin seeing too many clients to make ends meet. Finding a great in-network therapist in Philadelphia can feel like winning the lottery.

We’re a private pay practice because we believe it leads to better therapy. That’s not a sales pitch. It’s why we built our therapy practice in Philadelphia this way.

When insurance isn’t involved, you and your therapist decide everything about your treatment. How often you meet, how long you work together, what approach makes sense for your situation. If you need to meet twice a week during a hard season, you can do that. If you’re doing well and want to space sessions out, that’s your call too. Nobody is looking over your shoulder deciding whether your care is “medically necessary.”

Privacy is also better with private pay. There’s no diagnosis required unless you want to pursue out-of-network reimbursement. Your records stay between you and your therapist. No insurance company can request your notes or review your treatment plan. What you talk about in session stays in session.

Private pay also means you get access to therapists who aren’t burned out from fighting with insurance companies all day. A lot of highly trained, experienced therapists choose not to work with insurance because the reimbursement rates are low and the administrative burden is exhausting. When therapists don’t have to spend hours on hold with insurance or filling out authorization forms, they can focus that energy on actually helping you.

There’s also something to be said for the investment itself. When you’re paying directly for therapy, you tend to take it more seriously. You show up prepared, you do the work between sessions, you’re motivated to make progress. That’s not true for everyone, but a lot of our clients have told us that paying out of pocket made them more committed to the process.

Here’s an option a lot of people don’t know about. Even if your therapist doesn’t take your insurance directly, you might still get money back from your insurance company.

This is called out-of-network reimbursement, and it works like this. You pay the full session fee at each appointment. We give you something called a superbill, which is a detailed receipt with all the information your insurance needs. You submit that superbill to your insurance company, and they reimburse you for part of the cost.

How much you get back depends on your specific plan. Some plans reimburse 40% to 80% of the session fee after you meet your deductible. A $150 session might only cost you $60 or $70 out of pocket once you factor in reimbursement. Other plans have minimal out-of-network benefits or none at all, so you’ll want to check before assuming anything.

One thing to know is that the superbill does require a diagnosis. So if you go this route, you’ll have that diagnosis on your record. But you still get all the other benefits of private pay like choosing your own therapist, controlling your treatment, and working with someone who isn’t constrained by insurance rules.

We’re happy to help you figure out what questions to ask when you call your insurance company. Many of our clients in Philadelphia have been surprised by how much they can get back once they understand their out-of-network benefits.

Our individual sessions range from $140 to $175 and couples sessions are $165 to $200, depending on which therapist you work with.

We provide superbills monthly for clients who want to submit to their insurance for out-of-network reimbursement. We’ve found that many of our clients from Rittenhouse, Graduate Hospital, Northern Liberties, and the Main Line get back a significant portion of their session fees, especially those with PPO plans.

If you’re not sure what your plan covers, we can walk you through it during a free consultation. We’ll help you figure out the right questions to ask your insurance company. We want therapy to be accessible, and sometimes that just means helping you understand your options.

We offer in-person therapy in Philadelphia and Haddonfield, with online sessions available throughout Pennsylvania and New Jersey.

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