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Have you ever wondered, “Why the heck is therapy so expensive? Like, do I really have to pay $150, $180, or $225+ per session? That rate is simply unsustainable… Is therapy even worth it?”
You’re not alone if you’re wondering what makes the cost of therapy so intimidating. A lot of therapy-seekers ask themselves this every day. So, I asked 6 experts what makes the cost of therapy in the US so high.
You’ll be surprised to hear 6 different but equally insightful answers.
While we can’t just lower the cost of therapy across the board, we can share some knowledge and hope it empowers you. Therapy is worth it, even if it doesn’t always feel that way.
Therapy is more than a service; it's a profession that demands significant investment from practitioners.
Sonia Diaz-Ebadi, a therapist in Nevada and California, puts it into perspective, saying "Therapists in private practice are self-supporting business owners."
She adds, "They pay their own medical insurance, disability insurance, vacation and sick pay, and contribute solely to their retirement savings. The costs add up, including office rent, overhead, high premiums for liability insurance, and astronomical licensing renewal fees."
As a therapy goer, you can already see these costs adding up for therapists.
"Additionally, we're required by law to take continuing education units, which can be quite costly," Diaz-Ebadi added.
I also asked Diaz-Ebadi if she’d noticed a price increase in recent years. She said “I’ve been in practice for 13 years and yes, every year it rises bit by bit.”
So, that’s not great for you if you want therapy. Even for therapists who don’t have a physical location, it costs a lot to run a therapy practice.
Insurance for mental health treatment is another layer of the puzzle. Bonnie Lane from The Family Support Services highlighted this in her comments.
"Not that long ago, we didn’t have mental health parity on most insurance plans... Even now, when most insurance companies do cover mental health treatment, it’s rarely at a fair rate" for the therapist, she said.
Her statement underscores a crucial point. Though U.S. law requires it, mental healthcare isn't covered like physical healthcare.
Many insurance plans don't equate mental health treatments with other medical services. This often leads to inadequate coverage and lower reimbursement rates for therapists.
This imbalance forces many therapists to opt for a cash-only model. While good for them, this further limits access for those reliant on insurance.
And what about those with government-provided insurance?
"If someone is on Medicaid or Medicare, it’s nearly impossible to find a provider willing to accept what the payment rate will be," Lane said.
The rates offered by these plans are often too low to be sustainable for therapists. And who can blame them? This leads to a scarcity of providers who can afford to accept these insurances.
This situation brings to light the necessity for ongoing advocacy for better mental health coverage. It's time for lawmakers to ensure access to quality care for all.
Because a lack of parity affects the price of mental healthcare.
Your therapist, believe it or not, is under a lot of different pressures.
Each of these adds to the high cost of therapy in its own way. At least that's why Dr. Kate Lieberman, a Licensed Clinical Psychologist from DC, told me.
Provider Shortages and High Demand:
"The U.S. faces a large shortage of mental health professionals," she said. "This is true, particularly in rural and underserved areas."
It's been widely observed that "middle America" and rural areas don't have equitable access to therapy.
"Plus, it's more pronounced for specialists in areas like child psychiatry or addiction. High demand and low supply mean that therapists can charge more, driving up costs," Lieberman contributed.
Financial Pressures on Providers:
"Mental health professionals often contend with low reimbursement rates from insurance companies," Lieberman continued.
"These rates don't align with the high costs of their knowledge and training. Also, many enter the field with student debt and start earning later in their careers."
So much like other college grads, your therapists is fighting an uphill battle.
Lieberman continued, "This creates a situation where they must see a large number of clients to stay afloat. Either that or opting out of insurance networks altogether. This drives up costs in two ways. First, therapists leave the field due to burnout which causes low supply. Second, less accessible therapy for those who must rely on insurance."
Simple supply and demand affect therapy services, and the cost you can expect to pay for them.
Opting Out of Insurance Networks:
Faced with these economic pressures, many providers choose not to accept insurance.
This private pay model allows therapists more control over their income and practice. Who wouldn't want that?
"Yet it also places a financial strain on patients who must pay out of pocket," added Lieberman. "This further exacerbates issues of access and affordability."
Due to systemic insurance network issues, fewer therapists are accepting insurance. That means costs rise on average as more therapists seek a sustainable living.
Therapy pricing is affected by economics, yet we shouldn’t forget about the human factors.
Dr. Michelle Di Paolo, a Licensed Professional Counselor in Plano, TX, provides a nice human touch in answering our question, “What makes therapy so expensive?”
For one, therapy requires the therapist’s full attention.
“Mental health therapists typically see only one client an hour, and that client gets the therapists’ undivided attention," she started.
As such, the therapist collects less relative to, say, physicians. Physicians "collect more per hour because they see more patients per hour, vs a mental health provider who only usually sees 1 person per hour."
So, why does this matter for the cost of therapy? Therapists must set a relatively high rate to earn a sustainable living.
Another factor that adds to the cost? Length of treatment.
“You are treating the whole human and everything they bring to the table. It can take months simply to build enough trust and rapport with a client to benefit from therapy; it’s an extremely cooperative process. This just isn’t the case with other forms of health care. The process should, and does take longer to be efficacious.”
Lastly, Dr. Di Paolo took a big picture perspective.
“Mental health care is a mere infant in the grander scheme of medicine and health. The modern era of treatment for mental health has only been around since the turn of the 20th century, about 120 years ago. That’s nothing compared to the outstanding history of medicine.
“Although a great amount of progress has been made in a very short amount of time about the importance of mental health, it’s still largely an afterthought or considered a luxury form of care," Di Paolo concluded.
There are a lot of “human factors” that cause the price of therapy to rise. It’s not all economics!
We’ve dealt with “human factors” that influence the price of therapy.
Now, let’s look at some more tangible items that can increase the cost of therapy.
For example:
So, understand that the cost of therapy is set for good reasons. It's reflective of many factors. This understanding will demystify the pricing aspect of therapy. Does the cost of therapy in the U.S. feel more transparent now? I hope so.
For a unique perspective, I asked insurance biller Susan Frager for her thoughts. Could insurance add to the high cost of therapy?
“One thing I see daily is that everyone has their hand in the cookie jar," she told me. "That drives costs up."
Costs going up, means premiums go up, and claims payment gets harder to achieve as payers look for new methods to legally deny claims," Frager added.
"And every time they hire new vendors to help with things, that's another layer of people profiting off the system."
The more middlemen in between you, your insurance company, and your therapist, the higher the cost of therapy.
“And let's not forget the obvious - the C-Suite salaries. Does a CEO really need to make 20 million per year? Mergers and acquisitions, lawsuits, fines, etc etc. It all adds up and takes money out of direct care. I could go on...but I think you get the idea," Frager posited.
Insurance companies are a profit-driven business. As such, their customers have to pick up the slack by paying more for therapy.
Believe it or not, supply and demand affect the cost of therapy. In areas with high demand but low number of therapists, prices tend to be higher. This supply-and-demand dynamic is a fundamental economic principle that significantly influences therapy costs.
Take New York City as an example. It's a densely populated urban area where the cost of living is high. So, therapists charge more to cover their operational costs - in some cases $250 per session (or higher).
Conversely, therapy is more affordable in rural areas. Therapists in Wyoming (a mostly rural state) charge $145 for a one-hour session.
It's also important to consider the specialization of therapists. Certain mental health issues or treatment modalities may have fewer qualified professionals available. This leads to higher prices due to the specialized nature of the services. This scarcity of specialized therapists can create a premium on their services (especially in areas with high demand).
Understanding these dynamics can help you navigate your options and budget well.
In this exploration of why therapy is so expensive in the U.S., we've uncovered a complex web of factors.
The truth is clear: Therapy pricing is not arbitrary, and it is expensive.
You now know the most impactful factors:
I hope this blog has been insightful for you. If you need ideas for covering the cost of therapy, check out these helpful blogs:
Financing 6 Months of Weekly Therapy: Practical Steps and Creative Ideas
5 Benefits of Paying Out of Pocket for Therapy
What Are Out-of-Network Benefits?
Lastly, if you are lucky enough to have out-of-network benefits, breathe a sigh of relief. Thrizer automates the reimbursement process when you use these benefits. Thrizer also partners with therapists to reimburse all their clients automatically. Be sure to send your therapist our way, and reach out for a free demo.
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This blog post is provided for informational purposes only and is not intended as legal, business, medical, or insurance advice. Laws relating to health insurance and coverage are complex, and their application can vary widely depending on individual circumstances and state laws. Similarly, decisions regarding mental health care should be made with the guidance of qualified health care providers. We strongly recommend consulting with a qualified attorney or legal advisor, insurance representative, and/or medical professional to discuss your specific situation and how the laws apply to you or your situation.
