The Impact of Insurance on Therapists

by Zandra Baker, LPC

Partnering with founder Jeanine to launch Therapist Resource Network was a journey that made immediate sense for me. Her vision was directly relatable to my own experience. Working for an organization that had financial troubles in the months before the Covid-19 pandemic, I was suddenly left me without health insurance at a very critical time. Even with private practice work on the side, it was tricky to figure out what was safe and how to turn those funds into a reserve. That part time work was an effort to reach an income level that I not only needed practically but was earned given my years of experience. Many others had similar challenges and concerns: how to meet with clients, maintain their own health concerns, and still be paid. Unlike other salaried employees, most therapists have their pay directly related to keeping the client’s appointment– which we want!– but it isn’t always up to us. 

Therapists and other workers in the mental health field are often considered “helpers,” stepping up to be there in times of need. We identify with having an innate desire to help our community and others persevere, thrive, and reach their own identified goals. Unfortunately, similar to other “helping” professions, this collectivist mindset is not one that comes with a commensurate financial benefit. Additionally, among fields with similar education and training requirements, therapists earn, on average 35% less. Rates are also often undercut by new and growing list of startups that prioritize profits over care. When these groups undervalue the profession, therapists pay the price. It is paid in higher caseloads, less clinical support, higher competition, and, eventually, for many burnout.

Nobody becomes a therapist because they love doing paperwork, but it's necessary and often unpaid.

While I could go ON and ON about some of those startups, I wanted to utilize this month’s blog to shed light on a specific option for pay that most people have the details of: insurance.

Insurance is a fraught topic, and I wanted to share some additional context as to why it isn't the simple solution it may seem to be initially. Clients and other professionals often reduce the limits to therapist’s pay and balanced workloads to insurance coverage and a therapist’s decision on whether or not to accept it. However this choice is personal and complicated. It can be true that insurance helps potential clients access services more readily and affordably. It is also true that insurance often further complicates equitable pay for clinicians. Insurance companies vary in what they are willing to reimburse therapists, regardless of the fee the therapist has stated. The reimbursement is arbitrary and not based on specific skill sets or training or hours of training and additional certifications a therapist may have. Many of these insurers also require lengthy paperwork justifications and diagnoses that add to the amount of time a therapist is spending per client. This time is also not compensated. Between the lower rate and documentation time, therapists will need to take on additional clients to meet their financial needs. Again, this contributes to burnout. And, with all of these additional processes, should a therapist be out sick themself or have their own emergency need, the time is not compensated. If a client needs to cancel or is sick, that time is not compensated, or, as in my own case above, sometimes people lose their insurance completely disrupting their care.

The themes throughout the field are the same: either work for an organization that might offer benefits, yet the pay is low or private practice with potential for higher pay and without built-in health benefits. Many therapists choose working in two to three settings in order to find their version of the best of both worlds. That, too, is a challenge to sustain and not a requirement we expect of most other professionals at similar levels. When an emergency hits the strain on resources impacts therapists on all levels. Please check out our previous blogs and impact statements from therapists who have received grants to learn more about how TRN is helping bridge the financial gap. Additionally, we continue to seek volunteers in a number of specialties! This helps Therapist Resource Network focus all financial donations on supporting more therapists in need. Reach out today here!