Beginner's Guide to Using
Health Insurance for Therapy


When you begin looking for a therapist, one of the first decisions you need to make is how you'll pay for sessions. Using your health insurance plan to pay for therapy can be confusing, but it's a good option for many folks, as it can save you a lot of money.

This guide outlines all the ways insurance can be used to pay for therapy so you can learn how to maximize your plan and find a therapist who fits within your budget!



Choosing between in- vs. out-of-network therapists

  • You're new to therapy and want to understand basic health insurance terminology

Option 1.
Finding and paying for an in-network therapist

  • You want to keep therapy costs under $50/session
  • You have a low deductible plan
  • You've incurred a lot of medical costs this year

Option 2.
Finding and paying for an out-of-network therapist

  • You're able to pay more than $50/session and want to maximize your therapist options
  • You have great out-of-network health insurance benefits
  • You have a high deductible health insurance plan
  • You're looking for a specialist

Option 3.
Alternatives to health insurance

  • You have a high deductible plan and want to find alternative ways to keep therapy costs down
  • You want to learn about income-based flexible fees
  • You're looking to use tax-free accounts through your employer

Choosing in- vs. out-of-network therapists


What does it mean to be in- vs. out-of-network?

A therapist is in-network if they have a contract with your health insurance company to accept a predetermined payment amount per session.

  • Synonyms: Take or accept your insurance.

A therapist is out-of-network if they don’t have a contract with your health insurance company and set their own fees.

  • Synonyms: Don't take or don't accept your insurance; accept PPO plans or out-of-network benefits only.

Therapists decide which insurance networks they want to join; they can choose to accept some insurances but not others, only a few insurances, or none at all.

What are the pros and cons of seeing an in- vs. out-of-network therapist?

Working with an in-network therapist is typically more affordable but can severely limit the number of possible providers in your therapist search.

Including out-of-network therapists in your search will allow you to prioritize fit, expertise, and convenience, but often requires you to pay more for sessions and provide payment upfront.


Pros ☺
  • Payment is typically straightforward and doesn't require special insurance approval.
  • It is often less expensive to see an in-network therapist
Cons ☹
  • Therapist selection can be highly limited
  • There may be long waitlists to see an in-network therapist, especially in large cities


Pros ☺
  • Therapist choice is unrestricted, allowing you to prioritize personal fit, expertise, and convenience over insurance
  • More flexible scheduling means appointments may be available within a week
  • You may be able to receive money back from your insurance company as session fees are partially reimbursed
Cons ☹
  • It is typically more costly to see an out-of-network therapist and usually requires you pay the session fee upfront
  • It can be complicated to access out-of-network insurance benefits and reimbursement requests may be delayed or rejected

In-network Out-of-network
Pros ☺
  • Payment is typically straightforward and doesn't require special insurance approval.
  • It is often less expensive to see an in-network therapist
  • Therapist choice is unrestricted, allowing you to prioritize personal fit, expertise, and convenience over insurance
  • More flexible scheduling means appointments may be available within a week
  • You may be able to receive money back from your insurance company as session fees are partially reimbursed
Cons ☹
  • Therapist selection can be highly limited
  • There may be long waitlists to see an in-network therapist, especially in large cities
  • It is typically more costly to see an out-of-network therapist and usually requires you pay the session fee upfront
  • It can be complicated to access out-of-network insurance benefits and reimbursement requests may be delayed or rejected

Why do therapists choose to be in- vs. out-of-network?

Therapists choose not to take insurance because they are paid less, have less time with clients, and lose autonomy over patient care and privacy.

Despite these issues, in-network therapists work with insurances to serve a diverse clientele, especially those who could not otherwise pay for a session.


Why therapists choose to be in-network

Diversity of patient populations: Some therapists accept insurances in order to serve clients who are unable to pay for a session upfront and who would otherwise have difficulty accessing care. While for some insurance plans, there is only a slight cost difference to see a therapist in- or out-of-network, for others, particularly public plans, it can be costly and difficult to seek reimbursement for out-of-network sessions.

Ease of building a practice: Insurance companies typically display a list of all therapists who have agreed to contract with them on their website, which enables therapists to have more visibility online and connect with clients who are searching for a therapist primarily based on insurance.

Why therapists choose to be out-of-network

Payment amount: Therapists often charge $100-$200/session when they set their own rates, while insurance companies might only pay them $40-$130/session. Taking insurances might mean a therapist makes less than half the income they would otherwise earn.

Delays in payment: Insurance companies often delay payments by months or years, while payment for out-of-network sessions is typically required at the time of service.

Time with clients: In order to receive compensation from insurance companies, therapists must spend hours every week submitting claims or on hold with an insurance company representative. This time takes away from reviewing session notes, advocating on behalf of clients, and improving their practice.

Autonomy over patient care, privacy, and flexibility: Before they receive payment from an insurance company, therapists are required to submit detailed information regarding the services provided, including a valid reason for the sessions to have occurred and the session lengths. Only certain types of services are covered by insurances, and only when they are deemed medically necessary. Therapists may decide not to contract with insurances in order to preserve autonomy over client care, protect privacy, and offer services above and beyond that which would be covered by insurances.


Option 1.
Finding and paying for an in-network therapist

How do I find an in-network therapist?

If you are in RI, MA, NY, or CT, check out Zencare. Select your insurance company under "Payment Options" to view therapists who are in-network with your insurance.

Why aren't all insurances listed?

We are expanding our network of insurance-accepting providers, however, particularly in major cities, it can be difficult to find therapists who take insurances and are accepting new clients. Some insurance networks are also region-specific; for example, The Empire Plan network is only available in New York State.

How do I find an in-network therapist outside of MA, RI, NY, and CT?

If you are outside these regions, check the list of therapists who have been recommended to us, or ask your primary care physician for a recommendation. You can also go to your insurance company's website and browse their list of in-network therapists, or search other therapist directories; however, be sure to verify with each therapist that they do in fact take your insurance, as these lists are often out of date. Also note that it can be very difficult to find therapists who take insurances and are accepting new clients, particularly in large cities.

How does payment for in-network therapy work?

You can find complete information regarding your insurance coverage in your "Summary of Benefits." This chart is typically on your insurance company website or in a new member's packet:

in network 2.png

There are two key two terms that determine your payment amount:

  • Deductible — The sum total of medical costs you need to pay each year before your insurance coverage begins.
  • Copay — The set fee you pay at every therapy session.

When you see a therapist who is in-network with your insurance plan, you pay them a copay at each therapy session. Then, your therapist sends a claim to the insurance company to receive the remainder of the fee they're owed.

In this example, the therapist's session fee is $100. You pay your therapist a $25 copay at each session, and your therapist gets paid the remainder of the session fee, $75, by the insurance company:

How copays work

Beware of the deductible!

While in-network payment may seem straightforward, you also need to consider your deductible to determine the total cost of a therapy session.

Any medical expense, such as a doctor's visit or medication prescription, contributes to reaching your deductible. When you have paid enough in medical costs that the sum of costs equals your deductible, it often referred to as "meeting your deductible."

You pay the therapist’s full fee at every session until you've met your deductible amount. Let's say you haven't had any medical costs so far this year:


How in-network payment works.png

The therapist's session fee is $100, so you pay the full $100 fee for three sessions, at which point you've met your $300 deductible. At subsequent sessions, you pay only the $25 copay per session, and your insurance company pays the remaining $75 per session.


Option 2.
Finding and paying for an out-of-network therapist

What are the benefits of expanding my search to out-of-network therapists?

Whenever possible, try not to limit your therapist search by insurance. By using out-of-network benefits, you can typically have a portion of each session fee reimbursed by your insurance company, making it more affordable to prioritize therapist fit and start therapy sooner.

Expanding your therapist search beyond insurance allows you to:

  • Broaden your therapist pool: Especially for less common insurances or in major cities, it can be very, very difficult to find an in-network therapist. If the primary criteria of your search is insurance, you may immediately eliminate 99% of available therapists, leaving you with few options and little choice.
  • Focus your therapist search on personality fit and expertise: Broadening your search beyond insurance gives you the opportunity to focus on other criteria, such as finding a therapist who is a true expert in a specific approach or mental health challenge, or seeking out a therapist you feel an immediate connection with. The most important aspect of successful therapy is the therapist-client relationship, and when you have more choice, you are more likely to find someone you click with.
  • Decrease wait time to begin therapySince there is often great demand for therapists who are in-network with specific insurances, they frequently have long waitlists to accept new clients. Out-of-network therapists are typically able to accommodate new clients sooner, and may be more flexible with your scheduling and clinical needs.


How does payment for out-of-network therapy work?

Let's return to the Summary of Benefits we saw before, and focus on out-of-network costs:

benefits summary 2.png

Now, we have a new term to introduce:

  • Coinsurance — The percentage of a therapist's session fee you are responsible for paying.

To use insurance benefits for sessions with an out-of-network therapist, you first pay the full session fee* at your therapy session. Afterwards, mail, fax, or submit a claim online to the insurance company, and receive reimbursement in the form of a check. The claim may be submitted after every session, or in aggregate every month.

As a result of the reimbursement from your insurance company, you ultimately pay only a set percentage of the therapist's fee; in this example, 20% of the session fee.

*Therapy session fees typically range between $80 - $150 in smaller cities and $100 - $250 in big cities like Boston, New York City, and San Francisco; session fees are typically higher for psychiatrists.

How out-of-network payments work.png

Note that in this example there is still a $300 deductible, so you would not receive insurance reimbursements until you've paid $300 in total medical costs.


Beware of the allowable amount!

The actual amount you are reimbursed by your insurance company is not based on what the therapist charges per session; rather, reimbursement is based on a predetermined amount that the insurance company sets.

  • Allowable amount (or "usual, customary, and reasonable rate") — The fee an insurance company determines is reasonable for a therapist to charge per session.

The allowable amount varies by geography and therapist degree type; unfortunately, insurance companies do not disclose this amount so you won't know exactly how much of your session will be covered until you submit your first claim and receive reimbursement.

In this example, the therapist's fee is $100, so you pay $100 per session upfront. However, let's say the insurance company sets the allowable amount at $80 per session.

This means that the insurance company will reimburse you at a rate of 80% of $80. You will ultimately be responsible for 20% of $80, plus 100% of the remainder of the actual cost of therapy ($20).

The math behind the "allowable amount"

Let's break down the math behind the allowable amount to determine your total cost for ongoing therapy sessions, after meeting your deductible:

  • Therapist's session fee = $100

  • Allowable amount = $80

  • Coinsurance = 20% (Insurance pays 80%)

This means:

  1. You pay $100 upfront and submit a bill for the session to your insurance company. 
  2. The insurance company reimburses you for 80% of the allowable amount:

    80% x 80 = $64
    You are reimbursed $64.
  3. You have paid:

Coinsurance (20%) x Allowable amount (80) = $16
Plus the difference between Session Fee ($100) - Allowable amount ($80) = $20

$16 + $20 = $36
= Your total payment is $36.

How do I figure out what my out-of-network benefits are?

The best way to fully understand your out-of-network coverage is to call your insurance company. The number for member services is typically on the back of your insurance card.

When you call your insurance company, be sure to ask:

  • What is my annual deductible?

  • Do I have an additional out-of-network deductible?

  • What is my coinsurance for outpatient mental health?

  • Do I need a referral from a primary care physician or an in-network therapist to see an out-of-network therapist?

  • How do I submit out-of-network claims for reimbursement?


Option 3.
Alternatives to insurance


The effect of a high deductible

Recall: a deductible is the total cost you need to pay before your insurance coverage begins.

So far, we've looked at how payment works to see an in- and out-of-network therapist when the deductible is set at $300. 

Unfortunately, a deductible can be much higher. A high deductible heavily influences how much you pay for therapy.

For example, let's say the three people below are all seeing the same therapist in-network with the same insurance company, but different deductible plans:


Ally pays only $15/session.

Ben pays the full session fee of $100/session for 4 sessions to meet his $400 deductible, and then pays $15/session.

Chris pays the full session fee of $100/session for 40 sessions to meet his $4,000 deductible, and then pays $15/session.

Let's look at some options to make therapy more affordable when you have a high deductible.

Sliding scales

What is a sliding scale?

A sliding scale represents the range of fees a therapist typically charges per session.
For example, while a therapist's standard fee may be $150/session, they might list a sliding scale of $80 - $150. This means that they are willing to work flexibly within your budget and offer lower fees based on financial need.

Therapists typically list a lower limit in order to ensure they earn a livable annual salary. Likewise, while they may reserve a few sliding scale slots for clients who would not otherwise be able to seek therapy, these slots are typically limited; not all clients can pay the lowest limit fee at any given time.

When can I ask for it?

You can ask for a sliding scale at any time, but be aware that your request may be declined, depending on how many clients a therapist already has paying low fees.

You might ask about sliding scales on your initial call with a therapist if you know you have a high deductible. It's a good idea to think about your therapy budget and do some research ahead of time. You may want to look at what their standard fee is, as well as what other therapists in the area typically charge to get a sense of what you can reasonably ask.

You can also ask about a sliding scale if you've been seeing a therapist for a period of time and your insurance changes; they might be more likely to work within your budget if they already have an established relationship with you.

What are the pros and cons of sliding scales?


  • Bypassing insurance entirely ensures greater privacy; information about your sessions won't be reported to the insurance company, which means if you are on your parents' insurance, they won't find out, and future insurers won't have access to your therapy history.

  • You don't have to meet your deductible before paying reduced fees.

  • Depending on personal circumstances, some therapists can be very flexible with sliding scale fees.


  • Therapists typically have a limited number of sliding scale slots, so your request could be declined, or negotiated to more than you want to pay.

  • Sliding scale fees do not contribute to your deductible, so if you have major medical expenses later in the year, you will have higher upfront costs before your insurance coverage begins.

HSAs and FSAs

Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are two ways  employees can pay for health-related expenses, including copayments and coinsurances, through a tax-free account.

HSA and FSAs allow you to set aside funds for medical expenses while reducing your taxable income. In most cases, you receive a debit card for your account and use it to pay for qualifying expenses throughout the year. While you can’t enroll in both types of accounts, employers may offer the choice of both options.

HSAs allow you to contribute up to $3,450 per year, roll over unused balances to the next year, and transfer balances you as you change employment; however, there are eligibility requirements, such as having to be enrolled in a high-deductible health plan.

FSAs don't have eligibility requirements; however, they are capped at $2,650 and you forfeit any unused balances in a given year.

This great chart from Nerdwallet outlines the major differences between HSAs and FSAs:

Screen Shot 2017-11-30 at 12.50.48 PM.png

In closing...
Glossary & Final Thoughts


Phew! That was a lot of ground to cover.

If your brain isn't bursting yet, below are definitions for some other terms you may come across in your insurance journey. 

Insurance plans

  • HMO: An insurance plan that typically has lower monthly premiums but less flexibility in out-of-network coverage. If you have this kind of plan, your options may be limited in-network, but it could be much more expensive to see an out-of-network therapist. You are also typically required to see a primary care physician for a referral to therapy before your insurance company will provide coverage.

  • PPO: An insurance plan that may have higher monthly premiums, but more flexibility in out-of-network coverage. If you have this kind of plan, your costs to see an in- or out-of-network therapist may be comparable.

  • EPO: An insurance plan with a similar benefit structure to an HMO, but you usually don't need to see a primary care physician for a referral before accessing mental health services.

  • POS: An insurance plan where, like an HMO, you need to see a primary care physician for a referral to therapy, but once you receive the referral, you will receive better out-of-network coverage. Similarly to a PPO, your cost to see a therapist in- or out-of-network may be comparable.


  • Claim: A bill you or a therapist supplies to the insurance company in order to seek reimbursement.

  • Out-of-pocket: Your own money; paid by you, rather than an insurance company.

  • Out-of-pocket limit: The maximum amount of your own money you can pay in one year for deductibles, copays, and coinsurances; if you reach this amount, your insurance company subsequently provides 100% coverage.

  • Premium: The amount you need to pay every month for insurance coverage. 


  • Billing code: A 5-digit number that tells an insurance company what kind of services were provided in a given session so they know how much to reimburse you or your therapist. On an initial call, it's a good idea to ask your therapist what billing codes they use if you're seeking out-of-network coverage. Then, you can call and ask your insurance company how much you'll be reimbursed for those specific services.

  • Cancellation fee: The amount you need to pay a therapist if you cancel a session on short notice. Insurance companies don't pay for sessions that don't occur, so you are typically responsible for the therapist's full session fee. Make sure you go over and understand your therapist's cancellation policy at the first session!

  • Diagnostic code: A 4-digit number used to signify a diagnosis. Therapists are required to assign you a diagnostic code if you are using insurance benefits to pay for therapy. This shows the insurance company that there is a medically valid reason for the session to have occurred, and therefore the therapist deserves to be paid. 

  • Outpatient mental health: The term used for a therapy session in an insurance summary & benefits.


Ok, now my brain is bursting. What should I do?

That's completely understandable — navigating health insurance is complicated!

First, know that you're not alone. Even our team members at Zencare have trouble when using our own health insurance plans for therapy.

Second, choose the route that feels most manageable for you right now: 1) find an in-network therapist, 2) find an out-of-network therapist, or 3) find therapists who offer alternatives like a sliding scale. 

Third, speak with your therapist. After seeing hundreds of clients, therapists are well-versed in how insurances work. They may not have all the answers, but can help guide you in the best next step. If you're in college, you might also try asking Counseling Services for guidance.

Finally, even though it's everyone's least favorite option, calling your insurance company often clears up a lot of confusion, once you get a human on the line. To make it less daunting, consider preparing a list of questions ahead of time. You've got this!


Questions, comments, or feedback? Email us at!


Made with ❤ in New York, NY, Providence, RI, and Boston, MA
Many thanks to our former intern Allison Rosenberg for her contribution!