How Expensive Is Therapy and The Cost Breakdown

 


By Kym Everett, CPC, CPMA

Octave VP of Revenue Operations

The decision to start therapy may bring up a range of feelings. Nervousness, excitement, anxiety, and hopefulness are common among many taking the leap. In an ideal world, your sole focus would now be on getting your therapy journey underway.

Unfortunately, there are practical matters to consider. In addition to finding the right therapist for you, it is necessary to determine the financial commitment your therapy will entail. Just how expensive is therapy and are there ways to minimize the cost?

In this article, we will discuss the average cost of therapy, the factors that raise or lower the cost, and why therapy costs as much as it does. We will also go into the ins-and-outs of insurance and pricing and how you can navigate your health insurance plan to lower your financial commitment.

What Factors Play Into the Cost of Therapy?

The average cost of therapy in the United States ranges from $100 to $250. It’s understandable that you might be confused as to why the cost can vary quite this much. Therapy is therapy… right?

The reality is that there are a number of factors that play into the cost of therapy and some are not as intuitive as others.

Therapist Credentials

Every licensed therapist has spent years in college followed by years of internships under supervision. No matter their particular credentials, they have gained expertise in providing therapy. However, there are different therapist credentials that can play into the cost of therapy.

  • A licensed professional counselor (LPC), also known as a clinical counselor, holds a master’s degree in a relevant field, such as counseling or clinical psychology. This gives them the credentials to provide therapy to individuals presenting with all kinds of issues. Although they have not specialized in one type of therapy, they may be excellent at treating the gamut of mental health problems.

  • A licensed clinical social worker (LCSW) is a type of therapist whose education focuses on society’s impact on the individual. They have a broad perspective of community issues and social justice, and use this lens as a guide in treating individuals. Their fees are similar to those of an LPC.

  • A licensed marriage and family therapist (LMFT), on the other hand, has specialized in relational therapy. Their graduate-level education focuses on understanding and treating couples and families. Specialists usually charge more than generalists, and seeing an LMFT is likely to cost more than seeing an LPC. This is also due to the nature of couples or family counseling, as the therapist is treating more than one person.

  • A clinical psychologist has gone further with their education after completing their master’s degree, qualifying as a doctor of psychology (PsyD) or doctor of philosophy in psychology (PhD). Since they have gained a higher level of expertise through their education, clinical psychologists tend to cost more than LPCs.

As mentioned, every qualified therapist has a high level of expertise and thousands of hours of experience. Your choice of therapist will mostly depend on context and personal preference.

Type of Therapy

It’s not just the credentials of the therapist that affect the cost of therapy. Some types of therapy cost more than others. For instance, couples therapy and family therapy tend to be more expensive since multiple people are being treated at once.

Certain therapy modalities require specialized training. For example, eye-movement desensitization and reprocessing (EMDR) is a relatively new therapy often used to process trauma and post-traumatic stress disorder (PTSD). EMDR may cost more due to the additional training taken by the therapist, as well as a potentially higher demand for their services.

Geographic Location

Cost-of-living differs from one state to another, affecting everything from average income to the price of services. Accordingly, a state with a low cost-of-living will generally have a lower average cost of therapy than one with a high cost-of-living.

Therapy is also perceived in differing ways depending on location. In a state where therapy is valued, there is a higher demand which leads to higher prices. In a state where therapy is still taboo, low demand decreases the prices.

Insurance

Insurance impacts how much you will pay out of pocket for therapy. The specifics of your provider and plan will determine what therapy costs you. On average, once your deductible is met, you are likely to pay $30 to $120 per session with insurance.

Insurance can be difficult to navigate. Octave will help you understand your insurance plan and what it covers, along with the paperwork you need to complete. For more information, see our comprehensive insurance and cost guide.

How Much Does Therapy Cost Without Insurance?

While the average cost of therapy in the U.S. ranges from $100 to $250, these figures represent the totals when insurance is paying in part. For people without insurance, therapy rates can differ.

Therapists may be willing to negotiate lower fees for clients without insurance, pricing their services according to a sliding scale fee structure which takes whether the person is insured, as well as their income, into account.

On the other hand, some therapists may charge uninsured clients more. Alternatively, they may not accept insurance so as to charge higher rates. Insurance companies generally negotiate or require therapists to charge reduced rates. When not processing their fees through insurance, therapists are free to charge differently.

What Overhead Costs are Associated with Therapy Expenses?

Many people wonder why therapy costs what it does. Often, this is due to the misconception that therapy overhead costs are low. From the outside, it may seem like all a therapist needs to operate their practice is a small office with a couch.

However, as is the case when running any kind of business, there are a number of associated expenses not seen by potential clients. There are also additional costs that are specific to people providing therapy.

The following overhead costs are all associated with therapy, contributing to higher fees:

Licensure Fees

Licenses issued to therapists do not remain valid indefinitely. In order to maintain their license, a therapist must pay licensure fees every one to two years. These fees differ based on the credentials of the therapist and their location.

Cost of Continuing Education

Retaining one’s professional license is not just a matter of paying fees every year or so. Therapists are also required to continue their education, with a certain number of hours committed to doing so. This ensures that they do not miss out on new innovations or lose their edge in addressing diverse clients’ needs.

Continuing education entails attending conferences, completing courses, and training in additional techniques or therapy approaches. These can all be expensive, necessitating an increase in therapy fees to cover this mandatory commitment.

The debt incurred during their college education is also pertinent. Many therapists are still paying back tens or hundreds of thousands of dollars for five or more years of study. Monthly payments eat into their earnings, making it necessary to charge higher fees.

Marketing Costs

Like any other professional, a therapist needs to market their services in order to attract clients. This can be a resource-heavy requirement in terms of both dollars and hours. Since most therapists do not have an education or experience in marketing, this constant requirement can take far longer than it would a professional. Alternatively, they may need to hire someone to do their marketing for them.

Liability Insurance

All health professionals require liability insurance to cover costs in case lawsuits are brought against them. Healthcare is a high-risk field for professionals as not only can small mistakes cause significant damage, but clients may also be more likely to assign blame to the provider when results are negative.

This does not mean that those bringing a lawsuit against a therapist are doing so unfairly. However, the high stakes associated with damage to one’s wellbeing can lead anyone to seek someone to blame. Furthermore, both the legal system and the role of insurance in paying legal fees provide high incentives to take legal action when things go wrong.

Liability insurance is therefore non-negotiable for therapists, who must pay premiums every month for all types of claims.

Membership Fees for Organizations and Directories

Therapists pay a number of fees every month for membership in various organizations. These organizations, such as the American Psychological Association, provide professional support, access to research and training, invitations to events, and much more.

In addition, there are many directories of therapists which are used by clients to find a provider. These directories can be searched by location and specialization, among other filters. It is crucial to be listed in directories as they can be a source of many new clients. They are also seen as a mark of professionalism and legitimacy.

Location Fees (Rent)

Even though a therapist may not require too much space to provide therapy, rent can be quite high. It is extremely beneficial for therapists to be in central locations where there is a larger potential client base. In urban areas, these locations are particularly expensive, as demand is high and supply is very limited.

Offsetting the Expense of Therapy with Insurance

Therapy is not a luxury but rather a healthcare intervention that can be lifesaving. Therefore, no one should face having to choose between going to therapy and making ends meet. Unfortunately, as is the case with all forms of healthcare in the U.S., high fees do end up being prohibitive for too many people.

Health insurance goes a long way towards bridging the gap for people who cannot afford to pay the full price for therapy. Your insurance provider will pay a portion of the cost of each session. Their contributions amount to, on average, between 60% to 90% of the total fee.

This still leaves the client with a copayment to cover. However, rather than having to pay $100 to $250 for each session, you are liable for approximately $35. Although regular sessions over an extended period of time will see these bills add up, they are much more manageable. Even some individuals who live paycheck to paycheck may find a way to budget for therapy (in cases where it is possible to sacrifice other expenses).

Insurance can be confusing at the best of times and you may be struggling to get clarity on what your provider will cover. Concepts like deductibles and service limits can add to the difficulty navigating getting cover for therapy.

Octave helps you understand what your insurance provider covers and how to claim. Use the Insurance Coverage Calculator to get an estimate of what your provider pays in your state.

Options If Therapy is Too Expensive For You

Insurance coverage helps significantly lower therapy fees but an average copay of $35 per session may still be prohibitive, especially if you are seeing your therapist on a weekly basis. Furthermore, some people do not have insurance coverage and will need to pay the full fees. What can you do if you still can’t afford therapy?

There are a number of options available to help you lower the cost of therapy. Consider:

Discussing payment options with a therapist

Some therapists may calculate their rates on a sliding scale that takes a person’s insurance and income into account, charging less to those who are struggling to afford therapy.

Your therapist may also offer payment plans, giving you the option to schedule smaller payments while you are still getting your finances in order. Since insurance reimburses you rather than paying upfront, the therapist might also consider waiting for you to be reimbursed before requesting payment.

Therapists sometimes reserve a certain number of pro-bono slots every month for clients who cannot afford the fees. Availability is limited and is usually provided on a first-come-first-serve basis.

It can be difficult to ask for financial help but many therapists are happy to provide it and already have plans in place. Open the discussion rather than choosing not to go to therapy. They will be sensitive to your needs and emotions, while respecting your privacy as well.

Asking about Employee Assistance Programs (EAPs)

Employers are increasingly recognizing the importance of good mental health in the work place. Many employers now offer Employee Assistance Programs (EAPs) and will help cover the costs of therapy.

While it can feel intimidating to disclose your need for mental healthcare to your employer, they are legally prohibited from discriminating against you based on your mental health struggles.

Joining support groups

If therapy is not an option due to financial concerns, consider joining a free support group. There are many such groups available in person and online, including:

Exploring self help resources

There are now more options available for self-help than ever before. Self-help apps have become extremely popular due to their ability to bring free or affordable self-help directly to your phone. Mindfulness apps – such as Calm and Headspace – in particular have shown evidence for helping people manage anxiety and regulate emotions.

Indulging in self-care

Even with therapy, self-care is crucial for maintaining your mental health. Exercise is a potent means of reducing symptoms of mental illness and maintaining balance. Hobbies are often neglected in our fast-paced world but have a significant impact on one’s sense of meaning and fulfillment.

Spending time in nature, with activities like hiking or simply walking around the neighborhood, are grounding and provide an outlet for people having a tough time. Since isolation can cause or hugely exacerbate mental illness, it is crucial not to neglect quality time with loved ones.

Cost of Therapy: FAQs

Final Thoughts On The Cost of Therapy

Therapy can be expensive but is nonetheless an essential healthcare service. Although the full rate of a therapy session may be prohibitive to many, insurance relieves the burden significantly. Copayments remain, which may make it difficult for some individuals to afford regular sessions. Make sure to ask your therapist about potential payment options if you are concerned about the costs of therapy.

Ready to begin your therapy journey? Get started with Octave now to navigate the process with ease.

 
Getting StartedKevin Xiao