Hellooooo amazing people! I know it’s unusual to start a “professional” blog post this way, but that’s just how I talk-and I’m all about keeping it real. Today I want to dive into a topic that’s been on my mind as both a therapist and a client advocate: private pay therapy vs. insurance-based therapy (also known as self-pay, cash pay, or out-of-pocket therapy). Spoiler alert: I’ve changed my mind about private pay, and here’s why you might want to rethink it, too.

What Is Private Pay Therapy?
Private pay therapy means paying for your mental health sessions directly, without involving insurance companies. For years, I was pretty anti-private pay because, let’s be honest, some therapy rates are ASTRONOMICAL. I’ve seen rates as high as $350 for a 50-minute session! I used to say, “I don’t care if you’re a brain surgeon-no one deserves that much per hour,” and I’d go on rants about therapists claiming they “deserve to be paid what they’re worth” and how insurance is “so limiting.” Honestly, that language gives me what Gen-Z people call ‘the ick’.

Is Insurance Really That Limiting for Therapy?
A common myth is that insurance companies severely limit your therapy options. Yes, insurance companies can set some boundaries, but if your plan covers mental health therapy, consumer protection laws prevent them from capping your sessions arbitrarily. For example, if your insurance allows unlimited physical therapy, they can’t restrict you to just 12 therapy sessions a year. See the footnotes/link for some info on what is deemed as ‘improvement’¹ . Of course, enforcement isn’t perfect, but the law is on your side more than you might think. And random fact- a previous colleague of mine now runs that office in MN! Outside of that protection, insurance companies, for the most part, don’t actually mandate the methodology or treatment style that therapists provide for psychotherapy, codes are based on time limits.

Why Do Therapists Push Private Pay?
There are a few reasons:
• Agency Policies vs. Actual Law: Many therapists confuse agency rules with legal requirements. Agencies often create extra documentation or billing rules for their own convenience, not because the law demands it.
• Audit Anxiety: Providers worry about insurance audits and “clawbacks,” so they over-document. But progress notes for insurance and private pay are different, and knowing the actual requirements can save a lot of stress. THIS is when it is vitally important to understand what insurance is actually looking at² during audits.
• Payment Delays: Insurance payments can be slow and unpredictable. Private pay means therapists get paid the same amount, on time, every time.
• Privacy Concerns: While insurance requires a diagnosis and some documentation, well-written notes protect client privacy. However, diagnosis codes can impact things like life insurance down the road.

Why I’m Now Pro Private Pay (Sometimes)
Here’s the twist: I’ve realized that for many clients-especially those with high deductibles and few medical needs-private pay therapy can actually be cheaper than using insurance. Insurance rates can be higher than cash pay, and sometimes insurance pays so little that clients end up covering almost the entire cost anyway. I’m passionate about making therapy cost-effective and transparent, so I now educate my clients about their options. Many have chosen private pay to save money and reduce hassle.

The Bottom Line: Therapy Should Be Accessible and Honest
I’m critical of the myths and systemic issues that make people think they have no privacy or that insurance-based therapists can’t provide quality care. That’s simply not true. But I also recognize the real-world benefits of private pay for some clients. My goal is to help you understand your options so you can make the best choice for your mental health and your wallet.

1. “It is not necessary that a course of therapy have as its goal restoration of the patient to the level of functioning exhibited prior to the onset of the illness, although this may be appropriate for some patients. For many other psychiatric patients, particularly those with long-term, chronic conditions, control of symptoms and maintenance of a functional level to avoid further deterioration or hospitalization is an acceptable expectation of improvement. “Improvement” in this context is measured by comparing the effect of continuing treatment versus discontinuing it. Where there is a reasonable expectation that if treatment services were withdrawn the patient’s condition would deteriorate, relapse further, or require hospitalization, this criterion would be met” ↩︎
2. Not much is actually required- see ‘progress notes’ section stating “Document all psychotherapy rendered in a progress note for each episode of care on each date of service. A progress note must be legible. Documentation of treatment information can be kept to a minimum”. ↩︎