Does Health Insurance cover therapy? Therapy, insurance, and informed choice
- 2 days ago
- 8 min read
Therapy is often discussed in simple, comforting terms.
"Everyone should have a therapist."
"It helps to have someone to talk to."
"Therapy could be healing and helpful for you."
All of this can be true.
At the same time, many people quietly wonder: Does health insurance cover therapy, and what does that actually mean in real life?
Therapy can be a place to talk about what is happening in your life, especially during times of personal crisis, community harm, collective trauma, or ongoing stress. It can help with shame, build self-worth, and remind you that you are not meant to carry everything alone.
Therapy is also meant to be tailored to you. Your goals. Your questions. Your healing.
Yes, therapy can do all of these things.
How therapy works, however, depends in part on how it is paid for. Using health insurance for therapy is different from paying for therapy without using insurance (i.e. out-of-pocket), and many people are never taught what the difference actually means.
At MindBalance Mental Health Care, part of our commitment to being an anti-oppressive, holistic practice is to share clear, honest information about the systems that affect access to therapy. Insurance systems are often confusing and rarely explained in understandable language. Understanding how they work can help reduce surprise, frustration, and stress when starting therapy.
Why therapy looks simple in movies and tv
In movies and on TV, therapy usually looks the same. A person sits down on a sofa. The therapist listens. They talk.
What is almost never shown is how therapy is paid for.
We do not see conversations about insurance plans, diagnoses, deductibles, or bills. As a result, many people think that if they have health insurance, therapy is automatically covered.
Many people are surprised to learn that this is often not true. Insurance may cover only part of the cost, very little, or nothing at all. This surprise can be confusing and discouraging, especially when no one explains how the system works in advance.
Why paying for therapy is more complicated than people expect
One reason therapy costs are confusing is that they are treated as medical services when using insurance.
Because of this, therapy falls under the mental health care system, which is part of the larger medical and insurance system. This system determines what is covered, how much, and under what conditions.
Insurance companies do not pay for therapy services simply because it's helpful. They pay only when certain rules are met.
One of the main rules insurers use is medical necessity.
What is medical necessity, and why does it matter for therapy
Medical necessity is a term used by insurance companies. When people ask what medical necessity means, they are really asking why insurance will or will not cover therapy.
Insurance generally only covers therapy when your current mental health concerns meet its definition of medical necessity. This means insurance requires a mental health diagnosis, which is considered a medical diagnosis, before therapy sessions can be treated as a covered benefit under your plan. When therapy is covered, your plan’s deductible, copay, or coinsurance applies to those sessions.
Insurance companies look for a diagnosis, how symptoms affect daily life (e.g., work, school, daily tasks, relationships), and whether therapy is expected to reduce those symptoms.
Medical necessity is not a judgment about your worth, your pain, or whether therapy matters to you. It is simply the rule insurance companies use to decide whether therapy is covered under your insurance plan.
Because of this, therapy that feels helpful, supportive, or meaningful may still not be covered by insurance.
Insurance rules vary by plan, and coverage decisions are made by the insurance company, not the therapist. This information is intended to explain how insurance typically works and may not reflect the details of your specific plan.
What does insurance mean by "symptoms," and why does that language matter
When insurance companies discuss symptoms, they refer to specific thoughts, feelings, or behaviors listed in the Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, Text Revision (DSM-5-TR), the diagnostic manual used in mental health care. The DSM-5TR outlines diagnostic criteria that therapists use to determine whether someone's presenting issues and reason for seeking therapy meet the requirements for a mental health diagnosis.
Insurance uses these DSM-5TR-defined symptoms as part of a checklist to decide whether a mental health diagnosis applies and whether therapy meets their definition of medical necessity for services that insurance will consider covered under your insurance plan. In this system, symptoms are used to justify coverage, not to describe a person's full experience.
It is important to say this clearly. Symptoms and mental health diagnoses do not define who someone is. At the same time, diagnoses can carry stigma and have real consequences in people’s lives. For some, a diagnosis can also bring relief, validation, and access to care and healing.
This is the ongoing tension many therapists hold. We are asked to assess and diagnose someone’s current concerns in ways that may open doors to support, while also knowing that the same labels can feel limiting or harmful. Holding both of these truths with care, humility, and openness is essential to ethical and holistic, anti-oppressive practice at MindBalance Mental Health Care.
Many therapists and healing practitioners also note that the word “symptom” can feel limiting or pathologizing. As Jennifer Mullan, author of Decolonizing Therapy, explains, what are often labeled as symptoms can be understood instead as “expressions" of our experiences and as “perfectly normal and understandable expressions of suffering, pain, or unwellness” (p. 128).
This reframing reminds us that many of the experiences insurance calls symptoms are meaningful and understandable responses to stress, trauma, oppression, loss, or unmet needs. They are signals, not flaws.
In therapy, our work is not to reduce a person to a list of symptoms, even when insurance requires that language. Our work is to understand the context of those experiences and to support healing in ways that honor the whole person, not just what the system asks us to name.
Does health insurance cover therapy for mental health care
When you use health insurance for therapy, insurance companies treat therapy like other medical care.
This usually means:
A mental health diagnosis is required
Your therapist must show that therapy meets insurance rules for medical necessity
Insurance may limit how often you can attend therapy or how long it can continue
Insurance companies may review records and decide whether to pay
Using insurance can make therapy more accessible for some people. At the same time, many people are surprised to learn that insurance sometimes covers less than expected or ends coverage sooner than they hoped.
How therapy works when you pay for therapy without using insurance
Paying for therapy without using insurance means you pay the therapist directly for each session.
In this case:
A diagnosis is not required unless you and your therapist think it would be helpful
Therapy can focus on life experiences, relationships, identity, trauma, shame, or personal growth without having to label these experiences with a medical diagnosis
You and your therapist decide how long therapy lasts and what it focuses on
Information is not shared with insurance companies
Some people find diagnoses helpful and validating. Others find them limiting or uncomfortable. Paying for therapy out of pocket, which means paying for therapy without using insurance, allows more choice in how therapy is structured.
Why using insurance does not always mean lower cost
Many people assume that using insurance automatically makes therapy affordable. In reality, this depends on your specific insurance plan.
Most insurance plans include a deductible. A deductible is the amount you must pay before your insurance starts helping with the cost of care.
For example:
Some plans require you to pay $500 to $1,000 before insurance helps
Other plans require you to pay $3,000 to $6,000 or more before coverage begins
Until that amount is met, you are still paying the full session cost yourself. When you use insurance, this cost is usually not the therapist’s private-pay rate. Instead, it is the session price your insurance company has set.
Even when your therapist is in-network with your insurance plan, the insurance-set rate can still exceed $100 per session. You pay this amount until your deductible is met, even though insurance has not yet started contributing to the cost.
It is also important to know that therapists often do not know the exact amount you will owe for a session in advance. While therapists can access some information in insurance provider portals, those systems often do not provide real-time updates, offer limited details, or are difficult to interpret. Different insurance portals operate differently and share varying amounts of information.
In addition, therapists cannot look up or verify any insurance information until you have signed the paperwork to start therapy and given consent for services. This includes providing your insurance information and authorizing the practice to bill your insurance or contact your insurer to verify benefits and coverage.
Before you sign up to start therapy, the most a practice can usually tell you is whether they think they are part of your insurance plan based on the plan name you share. However, many insurance companies have multiple plans with similar names, including different employer or group plans. Because of this, this information is not always a guarantee.
For the most accurate information, call the number on the back of your insurance card and ask your insurance company directly whether the therapist or practice is in-network or out-of-network for your specific plan. You can do this by providing them with the therapist’s or practice’s NPI 162978982, the identification number insurance companies use to verify provider status.
Because of all of this, therapists may have general rate information and can often estimate costs, but they usually cannot guarantee the exact amount you will owe until the insurance company processes the claim after the session has happened. This complexity is part of why insurance can feel confusing and overwhelming for everyone involved when trying to understand how to use insurance for therapy.
Because of this uncertainty, you are encouraged to contact your insurance company directly before starting therapy and ask a few specific questions. This can help you better understand what to expect and reduce the risk of unexpected costs.
You can ask your insurance company:
What is my deductible
How much of my deductible have I already met
About how much will I pay for an intake or diagnostic assessment while I am meeting my deductible
About how much will I pay for a standard 50-minute therapy session while I am meeting my deductible
Are there limits on how many therapy sessions I can have in a year
Are there different costs or rules for in-person therapy compared to telehealth
Insurance representatives can usually give estimates, even if they cannot give an exact dollar amount. Make sure you also ask for a reference number for the call. If you need to call back to follow up on something from the call, they can look it up for you.
There is no right choice, only an informed one
Using insurance for therapy is not wrong. Paying for therapy without using insurance is not wrong.
What matters is understanding:
What your insurance does and does not cover
What decisions can insurance companies make about your care?
What the real costs may be
What feels most supportive for you
At MindBalance Mental Health Care, we believe people deserve clear information about their care. Our role is not to push anyone toward or away from insurance, but to support informed choice.
Therapy should help you feel supported, not confused or caught off guard.
If you have questions about insurance, paying for therapy without coverage, or which options might work best for you, we are always happy to discuss them with you during your initial consultation.
You deserve clarity, choice, and care that respects your full humanity.
Understanding your insurance benefits is part of informed choice.
Download our free checklist to guide your call with insurance and clarify your expected therapy costs.
Download the free checklist:
If you would like support thinking through your options, we invite you to schedule a consultation. We can help you understand your coverage and explore what care might look like for you.
Schedule a consultation:
Educational Disclaimer
The information shared in this blog is for educational and informational purposes only and reflects our perspectives and understanding at the time of writing. It is not intended as medical, mental health, legal, or insurance advice, and should not be relied on as such. Reading this content does not create a therapeutic or professional relationship. For guidance specific to your situation, we encourage you to consult with a qualified professional.