How much does therapy cost?

There are many factors that go into answering this question. First, it could depend on your insurance plan if you’re using your insurance to pay for therapy. What’s your copay? Or do you have to meet a deductible first? What about therapists that are out of network and don’t participate with insurance plans? It could depend on the area, region, or state they live in and the associated cost of living. It could also depend upon what specialized education and training they have that could be costly to maintain.

I get it, with prices going up across the boarrapist d- gas, groceries, rent, interest rates, and home buying- paying out of pocket for therapy feels like a luxury that most of us put on the back burner in favor of other, more important, living expenses.

So, Why is therapy so expensive?

Part of answering the question is money psychology- how do you define expensive? Is $50 out of pocket expensive for a therapy session? Is $150? What about $250? Different people will have different answers to these questions and and will prioritize their spending accordingly.

Another part of answering this question is what’s your WHY? When you think about *why* you’re going to therapy and how you’ll benefit when your course of therapy is over, does it matter more that you get a quick fix for a present-day issue? Or does it matter more that the investment of money, time, and energy today (and over the next few weeks/months) will continue to pay for itself years down the road in how you relate to yourself, others, and the world? And what is that worth to you?

How Much does a therapist cost and What goes into their pricing?

Let’s say you found an amazing therapist you want to work with. They specialize in a concern you have, you felt heard when you spoke with them by phone during your complimentary phone consultation, and they painted a clear picture of of how they could help you. BUT! That therapist isn’t in your plan’s network, their price per session seems high and you’re not sure if it’s worth it.

Some therapists offer 45-minute sessions, others offer 60-minute sessions, and others offer 3-4 hour therapy intensives. But what goes into setting fees for these services? And why is the therapist on Main Street charging $100 per hour while the one on Maple Street charging $200 while the online therapist several cities away is charging $150?

I can’t speak for all the therapists out there, but I do love having the money conversations around why we set the fees we do. Why is money such a taboo topic anyway?!? From these conversations, here are some of the common expenses (over and above a therapist’s own paycheck at the end of the week) that therapists incorporate into their pricing:

Advertising. How did you find your therapist? A google search? What link did you click on? Their website or blog? Their profile on Therapy Den, Mental Health Match, or specialized therapy directory like EMDRIA? Each of these advertising methods come with a price tag.

Continuing education and Certifications. Depending on the state a therapist is licensed in, they may be required to attend 15-20 Continuing Education Units (CEUs) per year. When I worked for a hospital, the hospital sponsored at least 1 hour of CEU training each month at no cost to me. But on my own, I have to pay for CEUs out of pocket. As I advance in my career (recently passed my 17th year post-gradation), the more in-depth I want my training to be. Sure, there are free CEUs out there, but often times, free CEUs offer more superficial education, not a deep dive. As an example, last year, I became EMDR trained, which was a $1500 investment of money AND 40 hours of my time/5 days off work. Working for myself means no one is paying me when I’m not in the office.

Licensing. As the pandemic has normalized online counseling, many therapists have started to get licensed in multiple states to make themselves available to their ideal clients located in other states. Licensing ranges from $100-200 but there can be additional up front costs including license verification, exam results, transcripts, finger printing, and postage.

Insurance. All the policies. General liability insurance in case a client slips and falls at our office. Professional liability insurance (aka Malpractice) in case a client sues us. Health insurance as well as Dental and Vision insurance. Some therapists are married or in domestic partnerships where they can get on their partner or spouses plans, awesome! Others don’t have that option and have to pay out of pocket each month for their premiums. Then there is short-term and long-term disability insurance just in case you end up out of the office for a medical issue.

Office space. For the past year, after an inter-state move, I have been operating as an online practice. But for many years before that, I rented an office which was about half my monthly mortgage! Office rentals can be a huge expense depending on the area a therapist practices in. If you

Student loans. Across college-educated or graduate-educated folks, most know the pain of student loans. And while student loans can offer that foot in the door you need to expand your education, those loans come at a cost. For therapists it is no different. I walked out the door after graduating with my MSW in 2007 with $60,000 in student loan debt before I had my first ‘real’ job. If I were to enroll in my Masters program this fall (that I completed in 2007), I would pay more than $31,000 in tuition-per semester- alone as an in-state resident. If I were an out of state resident, that would be upwards of $41,000.

Retirement and financial planning. Therapists in private practice are responsible for contributing to their own retirement plan and they don’t have an employer who offers a match. According to the Federal Reserve's 2022 Survey of Consumer Finances, the median retirement savings account balance across U.S. families was $87,000. Some therapists may have started saving young- good for them!- while others may be playing catch-up in their 50s.

Payroll and Taxes. A therapist in private practice needs to pay themselves in a way that covers all their personal expenses - from rent/mortgage and utilities to groceries, transportation costs, and all their other individualized costs of living. And their pricing also has to accommodate for 25% or more for taxes.

Paid Time Off (PTO). A therapist in private practice needs to pay themselves when their not in the office seeing clients. A healthy amount of time off to plan for is 4 weeks per year, though some take more! Their pricing needs to accommodate that time off.

Pricing to prevent burnout. No one wants a burnt out therapist, trust me! Burnout results from chronic workplace stress that has not been successfully managed and characterized by three dimensions: energy depletion/exhaustion; increased mental distance from the job or feelings of negativism or cynicism; and reduced professional efficacy. Similarly, Compassion Fatigue is reduced capacity for empathy toward clients resulting from the repeated exposure to their trauma causing therapists to lose pleasure and meaning they previously derived from their work and feeling more hopeless about the impact they can make. Taking regular time off can mitigate both burnout and compassion fatigue making your therapist, well, a better therapist.

Ok, that’s burnout, but what do I mean when I say pricing to prevent burn out? Let’s say a therapist’s business needs to make $10,000 (easy math, but everyone is different, some lower and some higher) in any given month to cover all those expenses above. Before you say, “must be nice to have $10k in your pocket each month while I’m over here making $25 an hour!” Remember that not nearly that monthly amount is going into their pocket, but a large portion of that is covering all those business expenses above.

If they charged $50 per session and worked four weeks out of the month (this would work out to 4 weeks time off per year), they would need to see 200 clients per month or 50 per week. This is not sustainable, for anyone. If they charged $100 per session, they would need to see 100 clients per month or 25 per week. For many therapists, this is really full-time, beyond 30 per week, you're really risking burnout. If they charged $200 per session, they would need to see 12-13 sessions per week. You may think that sounds so cush! But what about how they spend their time outside of session? Maybe they have another job, maybe they offer pro bono services to clients at a crisis center, maybe they have child care obligations, are a single parent, or are taking care of an aging family member.

How much is therapy with insurance?

This depends on your insurance carrier and your individual plan. Some plans have better mental health and behavioral health benefits than others. Some plans have super low copays - $10 - while others require members to pay a certain amount out of pocket until reaching a deductible whereby the plan will cover a percentage. Check your insurance card, sometimes your copay is written on it, or call the member services line to learn more.

Did you know you can see an out of network provider and still get reimbursed depending on your plan benefits? Or that you can use your FSA or HSA to pay for therapy?

Do you have a PPO plan or POS plan? Then you may have out-of-network benefits. What this means is that you would pay for services out of pocket, submit receipts to your insurance company, and when you meet your out-of-network deductible, your insurance would begin reimbursing you a percentage of payment.

Do you have a Flexible Spending Account or Health Savings Account (HSA)? If so, you can use your debit card to pay for therapy services. Because therapy is a healthcare expense. So, you have options!

CONSIDERING THERAPY OR Grief COUNSELING IN ANN ARBOR, MI?

Hi, I’m Nikki. A graduate of the University of Michigan School of Social Work and a Licensed Clinical Social Worker with 17+ years of experience. In my online therapy practice, I support adults in several states(MI as well as CT, FL, IN, OH, and SC) through life’s tough transitions, traumas, losses, and other adversities. Contact me here for your FREE 15-minute consultation!