Should I Use My Insurance for Therapy?

When starting to search for your therapist, there are a lot of factors to consider. One of the more common questions I’ve encountered, and one you’re likely wondering yourself – “should I use my insurance for therapy?”

Although Ally Psychological Services doesn’t accept insurance, we can help you figure out your benefits and ensure you get any reimbursement you’re entitled to. Now, my practice does not accept insurance for a variety of reasons, but that doesn’t mean choosing a private pay therapist is the right move for you.

Before we dive in though, let’s go over a few terms that might be helpful:

Provider – in this case, a provider is a therapist.

In-Network – a provider (therapist) that has signed a contract with your insurance company and you can use your benefits.

Out-of-Network (OON) – A provider (therapist) that is not contracted with your insurance company and you cannot use your benefits.

Private Pay – Another term for a therapist that is Out-of-Network (OON). This is because you pay them privately (opposed to going through your insurance).

Copay – the amount you have to pay per session when you use your health insurance benefits (just like at a physician’s office).

Out-of-Network Benefits  Certain Healthcare plans have benefits that entitle you to reimbursement directly from the insurance company when you work with an OON provider.

Now Let’s Get Into it:

In my opinion, there are three primary factors to consider when making this decision. In the following sections, I’ll break each factor down and provide some information for both in- and out-of-network to help you with your decision.


In-Network: Without a doubt, going to an in-network provider will usually be significantly cheaper than using an OON provider because you are only responsible for your co-pay. However, keep in mind your copay for a Mental Health visit is usually different (and more expensive) than when you visit your primary care physician. Some plans are relatively inexpensive ($25 per session), while others can be much greater ($80 per session). As you edge towards the more expensive side, it may become less important of a factor because there may be OON therapists you can find that charge similar rates to your co-pay.

Out-of-Network: Typically, the more expensive option. There really aren’t many financial benefits to choosing a private-pay therapist other than if you have a Health Savings Account, you can typically use that to cover the costs. You may also be able to use your Out-of-Network Benefits for possible reimbursement to ease the cost. Using these benefits doesn’t have the same privacy implications as using an In-Network provider.


In-Network: When you use an in-network provider, your insurance company has a legal right to request (demand) your records from the therapist. Whenever they want. This includes sensitive information you may have said, as well as any diagnoses the therapist gave you. And if you don’t think you need/have a diagnosis? All insurance companies require a formal diagnosis be given in order for the claim to be processed and the therapist to be paid. So, that means, you have a diagnosis. That diagnosis, unfortunately, may also impact other areas of your life, such as applying for future health or life insurance policies.

Out-of-Network: OON providers aren’t contractually obligated to send any information to insurance companies that you don’t want sent. What does this mean? You don’t need to have a diagnosis (except if you submit for reimbursement through your Out-of-Network Benefits, then you’ll need to have one listed). Ultimately, it is the most private method of therapy; no company that you pay has access to your sensitive information.

Length and Type of Treatment

In-Network: Insurance companies may sometimes only allow a certain number of sessions per year. What does that mean for you? If you run out of sessions and the insurance company doesn’t grant you more (the provider typically needs to request authorization for more), you’ll have to stop therapy or pay out of pocket to continue. The therapist may also be limited in what modality they use in therapy because insurance companies typically require Evidence Based Practices, which may or may not fit with how you want therapy to be conducted or find useful.

Out-of-Network: Using an OON provider, there are no limits to how many sessions you can attend weekly or annually. There are also no requirements about the type of treatment they can use. What this means is your therapist only has to worry about what you’ll respond best to, not what the insurance company wants to see. ACT or CBT? Sure. Mindfulness? You’ve got it. Music or Art? Sounds good!

So, Should You Use Your Insurance for Therapy?

There are a few key things to consider when deciding whether or not you should use your insurance for therapy. Honestly, I think there are pros and cons to both and what it should come down to is your personal preference and what you place the most value in. If your primary concern is finances, go use that insurance. If you care more about your privacy and want to keep things out of the hands of your insurance company, private pay is the way to go.