Nicole Pajer

After a bout of breakup-induced anxiety and depression, 31-year-old New York City resident Emily Taylor decided to look for a therapist. But finding a mental health professional to accept her Anthem Blue Cross and Blue Shield insurance plan proved to be nearly impossible.

“I spent days looking for therapists near me that were covered by my insurance,” Taylor said. “For the very few I did find, I spent over five hours on the phone trying to get appointments, [only] to find that they were either not accepting new patients or the wait time was two months.”

Taylor was able to locate plenty of highly reviewed therapists available for private pay, however. But since the average cost of therapy in New York is $200 to $300 per session, according to one report, that wasn’t a practical solution.

Many people struggle to find talk-based therapy that’s covered by their insurance plans. Of all practicing medical professionals, therapists are the least likely to take insurance. Only 55 percent of psychiatrists accept insurance plans, compared to 89 percent of other health care providers, like cardiologists, dermatologists and podiatrists, according to a 2014 study published in JAMA Psychiatry.

*Note:  While you may find it hard to find a therapist who will take your insurance, there is a good chance that therapists asking to be on your panel are being told, by your company, that there are no openings as they have enough coverage.  This has been my experience in Encino.  With this in mind, I have tried to keep my fees reasonable.---Alan Rudolph

That’s a big problem, since approximately 1 in 5 Americans will experience some sort of mental health disorder in a given year, according to the National Alliance on Mental Illness. Many will also seek counseling for divorce or grief.

Treatment is highly individualized, but experts agree that talk therapy is the gold standard for treating psychiatric problems. A 2015 study revealed that cognitive behavioral therapies were just as effective as antidepressants for treating depression.

So why is therapy so unaffordable for so many people? And why don’t more mental health professionals work with third party payers? It turns out several factors contribute to making therapy unaffordable ― many outside individual clinicians’ control.

Poor insurance coverage for therapy is largely a reflection of how society views mental health, says licensed psychologist Candice Ackerman.

“Insurance companies tend to see things more from a medical perspective ― where if you get sick, for example, then you take a blood test, they figure out what is wrong with you, they give you a medication and then you are all better,” Ackerman explained.

“But with mental health,” she continued, “a lot of times what we are trying to do is preventative maintenance-type work, and it makes it a lot more difficult to justify medical necessity with insurance companies.”

On the website for Ackerman’s practice in Lakeway, Texas, she explicitly states that some of the professionals there do not accept insurance because she wants to avoid surprising patients.

Even when insurance companies consider a mental health diagnosis a valid billable condition, the coverage may only be temporary. Jennifer Chen, 38, a freelance writer in Los Angeles, is waiting to hear whether her insurance company will continue to cover her therapy, since she’s no longer clinically diagnosed as “depressed.”

“After seeking talk therapy treatment for depression for four years, my mental health insurance provider is reviewing my case to determine if I still need coverage,” she said. 

In other words, Chen’s insurance company may determine that she is well enough to forgo therapy, even if it’s the reason she is well.

“My therapist will be attending a review board where the insurance company will discuss my case and make a final decision if my coverage will end or not,” Chen said. “Currently, my insurance covers about 50 percent of my therapist’s fee. If my coverage ends, then I’ll have to consider discussing a sliding scale fee or reduced therapy sessions.”

Insurers are starting to feel the frustration as well. “There is a well-documented national shortage of behavioral health providers generally ― and in health plan networks specifically ― resulting in patients having to pay out-of-pocket for treatment or forgo it altogether,” said Cathryn Donaldson, a spokeswoman for America’s Health Insurance Plans, an insurance company trade organization.

The gap between a therapist’s hourly fee and the reimbursement rates they receive from insurance companies can be massive.

“I’ve seen it lower than $50 a session,” Ackerman explains. “I charge $140 a session, so that would be a major blow in terms of income for us.”

“We can’t sustain our practices when that kind of value is put on mental health,” she added.

While $140 per session sounds steep, Ackerman says it helps cover $2,500 a month in rent, the cost of business and malpractice insurance, advertising, office equipment and credit card processing fees. And like many of her colleagues, Ackerman has accrued massive student debt. “I was in school for 10 years, and at this point, my debt is six figures!” she said.

“Therapists are health care professionals that all have master’s degrees or higher. Many have doctorates, medical degrees, and [have] graduated from specialized institutes for the teaching of psychotherapy,” said Dr. Thomas Franklin, medical director at the Retreat at Sheppard Pratt, a residential psychotherapy facility in Baltimore.

“Lawyers, accountants and architects generally make $120-$400 per hour or more,” he added. “One should expect to pay the same for therapy from a competent, highly trained professional.” 

Therapists are in a no-win position, says Arika Pierce at the Coalition for Patients’ Rights, an organization for non-M.D. health care providers. “Therapists are almost forced to charge the patient directly because they are not able to be reimbursed at equitable rates as their counterparts that have M.D. or D.O. behind their name,” she said.

Pierce says her organization is continuously advocating to change this to benefit non-physician licensed health care professionals and their patients.

“More equitable rates across all health care professionals would allow patients to have greater choice and access in terms of their health care decisions,” she said.

Therapists are almost forced to charge the patient directly because they are not able to be reimbursed at equitable rates. Arika Pierce, spokeswoman for the Coalition for Patients’ Rights

It’s a Catch-22: To keep overhead low, many therapists don’t hire staff or assistants. But without them, the job of working with insurance companies is overwhelming.

“Many people who work in mental health don’t have the volume of patients that primary care [physicians] might have,” said Dr. Lynn Bufka, an associate executive director at the American Psychological Association. “They might see seven or eight patients max in a day, where a primary care practice might see many more and also have dedicated staff who handle billing and who are very familiar with what the requirements are with all the different payers out there.”

Submitting a bill to an insurance company can involve jumping through an array of hoops, according to Ackerman, including justifying your services to an insurance representative, providing status report updates and getting on the phone with providers to track down late payments.

This can be particularly complicated because not everyone who sees a therapist has a diagnosable mental illness.

“Common reasons for coming to therapy, like couples counseling and grief counseling, are typically not covered by insurance,” said Ackerman.

In other cases, the diagnosis may be controversial in the field. “I have a client with dissociative identity disorder, which is formally known as multiple personality disorder,” Ackerman added. “I don’t know if that would get reimbursement, just because it’s a controversial diagnosis.”

Not everyone agrees that accepting insurance is impossible.

Dr. Patti Johnson has dealt with her share of insurance issues ― excessive paperwork, late payment and the hassle of continuously submitting her clients for coverage authorization. But the Los Angeles psychologist, who is currently maxed out with her patient load, finds that accepting insurance helps keep her schedule full, and along with patient referrals, allows her to sustain a lucrative private practice.

“Individuals generally check with their insurance companies when looking for referrals to a therapist. This is a positive and easy way for clients to know about you and your services without a large marketing budget,” she said.

Johnson also notes that allowing patients to bill their insurance opens up her client base to people of all income levels. “Most people can’t easily afford to pay $600 to $800 a month for weekly therapy, and without the ability to use insurance, they wouldn’t be able to get the care they need,” she explained.

To make it more feasible for psychiatrists to take insurance, the American Psychological Association would like to see therapy become a standard part of integrative health. So instead of a fee-for-service model, payment would be based on treating a particular condition. (In other words, patients would pay a lump sum rather than a payment every time a service is performed.)

“If it were up to me, our health systems would allow three or four appointments with a mental health provider every year, no questions asked, no need for a specific diagnosis,” the APA’s Bufka said.

This kind of yearly care could help patients address small problems before they grow into bigger ones. For example, a person could learn how to better manage their sleep, work with an anxious child or navigate a complication at work. This would probably lead to better mental and physical well-being, Bufka said, but the current billing system doesn’t support it.

For now, the insurance conundrum for therapists remains. “You struggle with wanting to help people that come to you that seem that they need it, but also keep your lights on in your office and make a profit,” Ackerman said.

Taylor eventually gave in and signed up for sessions with a highly recommended psychologist who charges $250 an hour.

“I’m feeling so much better and am still going, because it’s helpful,” she explained. But even though she thinks her treatment is worth the price, she hopes to cut down her sessions soon.

“I’ve gone about five months and paid about $5,000 out of pocket,” she said. “I just don’t have the money. I used my whole Christmas bonus to help with the costs.”