Insurance vs. Private Pay

I am very aware that most Americans pay a lot of money for their health insurance and it is fair to assume that they want to use it! Upon close consideration, some will decide that, in fact, they will use it, while others may feel the best option is to pay privately for mental health concerns. Let’s examine a few points to consider.

Number One Consideration – Level of Distress

For many, the number one consideration has to do with their level of distress. You may choose to private pay for a few sessions if you are in acute distress but otherwise well. For example, if you experience a loss, such as of a job, a relationship or a death, your life is generally well, but you are knocked down by a specific experience, you may choose to pay privately to avoid having to be diagnosed and documented in the healthcare system.

Alternatively, someone experiencing one of these types of episodes may be in acute distress, complicated by past experiences or a past diagnosis and may feel it will take more than a few sessions to process and recover. They may want to use their insurance.

Clinician Specialty

Maybe you have identified a clinician who is an expert in the area of what you are seeking therapy for and they do not accept your insurance. You cannot identify a similarly expert level clinician in your area who takes your insurance. Your choices are to choose someone in your insurance network with less expertise or to privately pay the identified expert.


All medical, dental, clinical, etc. providers, billing and administrative providers and insurance companies are bound by the HIPPA regulations, which are intended to secure your privacy. Click here to learn more. That said, your information is being entered and transmitted via the World Wide Web, which as we have learned over at least the last decade is only as secure as; 1. the keeper of the information and the keeper of where you are transmitting the information, 2. the operating system of these keepers, and 3. the difficulty level for the hackers. Undoubtedly, by and large, your information is generally accepted as secure and that is good enough for most.

For those who are paying privately, again, your provider is obligated to follow HIPPA regulations. This makes your information as safe as your providers digital system, which may or may not be secure. However, if your information is not being transmitted, you are that layer safer.

If insurance is being used, your provider is a candidate for random audits by your insurance company. This isn’t a significant factor, other than that the auditor will potentially have access to your entire case record, rather than just billing claim forms.

By and large, MOST people will not be concerned about this type of privacy, but for those who are, they should be aware of these factors.


A lot of people, understandably so, believe that anything they are struggling with in terms of their mental health and well-being will be covered by their insurance when they see a therapist in their network. This is not so. You must have a “billable diagnosis” for the service to be covered.

To have a “billable diagnosis” you must actually meet the criteria of the diagnosis. Truthfully, it isn’t usually difficult for a therapist to make a diagnosis because every revision of the Diagnostic and Statistical Manual adds more symptoms to each diagnosis. Any breathing human can usually be squeezed into one or more diagnosis.

About V-Codes

V-Codes are common life circumstances and they do factor into a diagnosis and prognosis – what someone is going through and how easily it may be resolved. V-Codes in the mental health field are not diagnosis’, therefore are not billable codes.

One example – V61.8 – Mom calls and reports that the children are fighting all of the time and they won’t do any chores or their homework. “HELP!!!!”

Another example – V61.10 – Husband calls and reports that he and his wife are in real trouble. They can’t communicate well and everyone in the home is miserable because of it.

See some more examples below. What mosts therapists will try to do is to bring the person, family or couple in and try to assess (or fit) one of the family members into a diagnosis. That said, the record needs to show that the treatment focus is on that person’s diagnosis. The V-code issues can certainly be part of the treatment plan, but we cannot lose sight of the fact that the diagnosis has to be addressed.

V Code Examples

Co-Parenting Services

Another scenario is in separation and divorce. Having worked on many of these cases, including “high conflict divorce” and “parental alienation,” this can be very difficult. Example – the court orders the family to participate in “co-parenting” or “parent-child relationship” therapy. Husband says, “I’m not going to be the identified patient and be diagnosed.” Wife says the same. That leaves the child to have to carry the diagnosis on their own back, for their divorcing parents. The child may in fact have a diagnosis because of what they are going through, but still, it’s a sensitive issue and children need to be protected from carrying a burden that they did not create. I don’t tend to think it’s fair for a child to have to carry a diagnosis, and naturally identify with that diagnosis, when they are often having a natural reaction to a difficult situation that they didn’t create. Many children will carry that diagnosis with them for years, always thinking it is their problem, not a problem that they developed in a difficult situation.

Often, one or both parent will agree to be the identified client. In this case, loop back up to the “Diagnosis” section above. Insurance does not pay for court services. They do not pay for mediation. Any parent who agrees to be the identified client will need to actually have to have a mental health diagnosis and a treatment plan with goals and objective will have to be written for that client. Sessions will need to be focused on this parent’s diagnosis, goals and objectives, NOT on parenting, “best interest of the child” issues, mediation, conflict resolution, and other dynamics that have resulted in a judge ordering the “co-parenting counseling.”

Additional Services Required

For children, teens and adults who are really struggling with mental illness, they may need a team approach. They may need testing or other expensive services to make a proper diagnosis and treatment plan. They may need medication, or they may need to be evaluated for special needs services at school. I would respect any parent’s decision to private pay if that was what they wanted, however, I typically recommend that they use their insurance, as these more extensive and specialized services can be costly, especially over the long term.


Some parents are not looking for their child to be diagnosed. In some cases, it’s important, for full treatment provision to have the child begin or continue with formal Mental Health Counseling, as stated above and be diagnosed. It is a responsibility not to be taken lightly or decided quickly. I have worked with many families whose child has been in therapy. When I ask what their diagnosis is, the parent doesn’t know. In fact, many adults I see who have been in therapy prior to our work, when I ask them what their diagnosis was/is, they don’t know. This doesn’t make a bit of sense to me from the parent angle or the adult in charge of their health and well-being. Your child is receiving mental health counseling, is diagnosed with a mental health disorder and you don’t know what it is? If you don’t know what it is, how can you partner with the therapist to best help your child? Regarding the future, HIPPA may be in place to assure your confidentiality, but if your child has been given a mental health diagnosis, they will one day have to decide what to say on a form or application, for example, when applying to the military or another occupation. Other possible examples, now or in the future, include things like a driver’s license or a firearms license.

Symptom Relief

Let’s say that someone comes in with a pretty heavy level of anxiety or depression. 12 sessions later, after doing some really great work, the symptoms have been resolved. The client, however, has gained so many skills in therapy, really benefits from working with the therapist and wants to keep it doing therapy. The therapist has some flexibility to be able to continue to provide services, maybe less frequently or for a few more sessions but cannot continue to submit claims to be paid by the insurance company far after there are no longer symptoms to document.


In 25 years, I have seen many people work hard at therapy. Stay tuned for upcoming posts about “How to succeed in therapy.” What stands out though, are the cases where I have been working with someone for 6 months to maybe a couple of years and they either lose their insurance or it changes to a plan that I do not take. In many of these cases, I see the person commit to their work with a renewed sense of commitment. Maybe it’s because they want to get a lot for their money, or maybe it’s because the level of privacy increases. In either case, I have seen people start to work on things that previously they wouldn’t touch, or maybe hadn’t even shared with me. I probably get this look on my face like, “Wow! Now we’re getting somewhere! Two years and you never shared this major piece of information with me?!”

Use of Time

When insurance is used, some of the time belongs to their forms and requirements. Assessment, Treatment Planning, Reviews, etc. While a qualified therapists uses a model that works best and flows most naturally, this isn’t always the same as having to fit into the insurance institution. Some therapists, like myself, have a secure online portal where clients can complete the basics; demographics, questionnaires, insurance information entry, HIPPA signatures, Consent to Treatment, etc. prior to their session. Otherwise, at least one quarter of the first session is spent on this. Sometimes more like 1/3 of the first session is spent on this. You may be wanting to come in and start where you are. Unfortunately, therapists will have to hold you back in order for us to complete our insurance requirements.


There are pros and cons to using insurance and privately paying for psychotherapy. Both ways, with a competent therapist who is well matched to the issues you are struggling with can be equally effective. Each person, and parent, will benefit from considering their own best course when it comes to therapy.

If you, your child or someone else you care about is really struggling, please don’t delay in reaching out for help. Do not allow yourself to delay seeking help while you think about insurance vs. private pay. Make the call. Whether you are using insurance or paying privately, be an active participant. Know and seek to understand what your treatment plan involves.

If you have questions, please ask in the comments or contact me through my website.