For approximately 20 years people have been using their health insurance to defray costs of psychotherapy. With the advent of managed care, it is increasingly important that patients consider both sides of the issue and make an informed decision about filing claims.

Factors in Favor of Using Health Insurance:

The primary benefit is that you get a direct return on your investment in your health insurance as partial reimbursement on your therapy bill.

Factors In Favor of Paying "Out-Of-Pocket"

Preservation of Confidentiality: When you pay out-of-pocket, your therapist can honor your privilege to keep the content of your psychotherapy private unless your therapist learns that you are a danger to yourself or others or your records are subpoenaed by a court of law. Under the new Health Insurance Portability and Accountability Act (HIPAA), this may be moot. Insurance companies are limited in what they can request and are required to keep confidentiality. See The Notice for more.

No Psychiatric Diagnosis: When you pay out-of-pocket, there is no need artificially to determine a psychiatric diagnosis, using the Diagnostic and Statistical Manual, 4th edition. The best kind of treatment, in the opinion of many therapists, avoids the label and focuses on your strengths. Carrying a psychiatric diagnosis can cause people to begin to view themselves as flawed. And there is often a tendency to "live down" to that label, to become increasingly like that diagnosis. See the article, "You don't have to be sick to get better."

You and Your Therapist Maintain of Control of Treatment: When you pay out-of-pocket, you and your therapist decide what goals you will work toward and how long treatment is needed. The cornerstone of effective therapy has been shown to lie in the quality of the relationship developed between you and your therapist. Careful listening by your therapist is how that relationship develops and this takes time.

How much will it cost?

Ninety percent of outpatient treatment lasts less than 25 sessions, and the average is approximately 8. Yours may take longer or less time, and after several sessions, your therapist will be better prepared to assess that. With a fee of $125 per session, cost of therapy is likely to be between $1000 and $3125. Many therapists offer payment plans to facilitate the payment.

For more information on fees, see Peggy Avent's article ""Compare Your Fee"."