Breaking Down of the Cost of Therapy

Sep 9

Counseling is an important part of many people’s lives, but if you’ve ever considered seeking help from a therapist, you may have been shocked by the price tag that came with it. One session can easily cost over $100; depending on the circumstances, this number can even be higher than $250 or more per session. So what’s the deal with the price tag?? We’re here to tell you about the factors that contribute to these prices and why therapy really is worth it in the end.

Facts

Private practice therapists don’t get paid for each hour they work, they can only bill for each patient they see, so when a patient doesn’t show, the therapist doesn’t get paid.
Not all therapists accept insurance because of low reimbursement rates and other issues (read more below).
The work that a therapist does extends beyond the one hour session a patient sees them. A therapist also needs to write documentations, research resources, plan treatment, maintain licensure requirements, and more. Each case amounts to 1.5 - 2 hours (or more) of work depending on the case. IE: 20 patients can = 40 hours of work.
Therapists with higher caseloads (more than 15-20 weekly sessions) are at risk of reaching burnout and providing lower standards of care as a result.*
Therapists may need to dedicate between 20% and 75% of their revenue streams to covering the costs associated with overhead and operations.
Therapists are also recommended to see their own therapist and many do.

Required Costs

Items that a therapist would not be able to practice without

License fees: $300 every two years ($12.50/m)
Liability Insurance for practice: starting at $120/year ($10/m)
CEU (widely varies depending on training) starting at $75/year and goes as high as $4900 for one training ($6.25/m - $408/m)
Student loans: Average debt is $110,000 for masters degree (mid payment $695/m - $1100/m)
Office supplies(printers, ink, filing, stamps): average $85/m per
Gas and electric: average $175/m
Supervision: $960 - $1800/year ($80 - $150/m) required for minimum two years
Consultations: $80 - $300 per consultation (# of consultations range from 1-12+ a year)
Internet: starting at $64/m
Phone line: starting at $75/m
HIPAA compliant email $6/m

Minimum $1214/m or $14,502 per year

Can exceed $1699+ or $20,388 per year

Not required, but highly sought after or highly recommended

EHR (electronic health records) Patient Portal like Simple Practice: starting at $99/m
Certifications: Ranging from $200 - $4900 per cert
Advertisement (google, psychology today, facebook, direct mail): starting at $30/m
Website: starting at $40/m
Personal health insurance: $312/m
Disability insurance: 1% - 3% of salary
Savings for time off, averaging 10 days off: starting at $200/m
Liability Insurance for business (seperate from liability of practicing): starting at $42/m
Legal and accounting fees: starting at $2000/year ($167/m)
Software cost (bookkeeping, officesuite, and other): starting at $300/m
Office space rental and property taxes: One room (not whole office) starts at $1200/m
Furniture: Starting at $3000 if office space is not furnished.

Starting at $2,396/m or $28,752/year not including disability insurance, certifications, or furniture

For a total of $32,553/year without an office and $43,248/year with an office (all low end figures). This figure does NOT include taxes (can be up to 32% of revenue) and other life expenses outside of running a practice.

If a therapist charges $150 a session for 20 patients and they never have cancellations and never take any time off (which is NOT realistic), they will make about $34,500 - $93,350 a year after taxes and practice expenses. Realistically, this figure will likely be closer to $20,000 - $80,000 a year.

Some therapists live in poverty depending on the area they live.

Do therapists accept insurance?

Many therapists do accept insurance and you can find them by searching “your insurace + therapist” or go to therapyden.com and filter by insurance type.

However, not all therapists accept insurance.

One of the biggest drawbacks to taking insurance is that there is less confidentiality. If you use insurance to pay for therapy, your therapist must share your diagnosis and treatment notes with your insurance company in order to get paid. This can have consequences, such as your health record being used against you when applying for jobs or life insurance. In fact, some consumers actually choose to “opt out” from using their insurance in order to have more confidentiality.

A second drawback to using insurance is that insurance can dictate what type of care you receive, including preventing specific treatments from being covered. Insurance companies are notorious for denying claims and issuing “claw backs” (denial of services after payment has already been rendered).

Lastly, most insurance companies pay between $40-$120 per session (depending on area and specialty) which is a fraction of what therapists charge privately. Being paid less means the therapist will have to see more patients in order to make a living.

In general, dealing with insurance can be a laborious process that eats up lots of time and money for therapists.

Affording therapy

You may be wondering how you can afford out-of-pocket prices. Accessing therapy at a lower rate is possible and many therapists offer sliding scale discounts. Sliding scale discounts are often offered for people who are experiencing economic hardship. For more information on finding affordable therapy, read our post on How to Find Low Cost Therapy.

Is therapy worth it?

There are many good reasons to invest in therapy. You may be putting money toward reducing your depression, learning how to live with anxiety, improving your relationships, quitting an addiction and so much more. Progress is different for everyone, but many people see improvements in the first six months to a year.

The benefits of therapy extend far beyond just feeling better in the moment - it can also help you develop better coping strategies, build resilience, and gain a deeper understanding of yourself. Therapy can provide a safe space to explore your thoughts and feelings, work through past traumas, and set goals for your future. Investing in therapy is investing in your overall well-being and quality of life.

Still have questions? We’d love to hear from you. You can contact Ideal Progress at any time to ask questions or book a free consultation!