Private Pay vs. Insurance

Private Practice Counseling

For several years I worked for a practice that did both private pay and insurance (I don’t know anyone that does just insurance and denies private pay. I found that for every three hours in a session, I spent about an hour fighting with insurances to get paid. As I looked at launching my own practice, my dream was to only be private pay. I did not accept insurance when I started, because I was not on any insurance panels and didn’t know how to bill insurance on my own.

I was doing the practice as a small supplemental income, so it did not make sense to have much overhead. As I grew, I realized that I did not need to take insurance to sustain. Here are a few pros/cons of each:



  • Serve significantly more clients
  • Diverse economic backgrounds of clients
  • Additional referral sources
  • Billing is not based on client ability


  • Significantly lower rate
  • Inability to raise rates
  • Time (I would plan at least 1 hour of fighting to get paid, completing paperwork, or faxing for every 3 client hours). That means I worked 4 hours and got paid for 3 and at a lower rate.
  • Insurance determined progress, what is paid, and client need
  • Clients need a diagnosis
  • Most panels you need to be 2 years post full license.

Private pay


  • Get paid more per hour
  • Less follow-up for payment
  • Less required paperwork
  • Your practice is based on the ethical standards of you and your licensing organization
  • You choose what to charge and when to give discounts
  • Can offer unique services
  • You and the client determine their need
  • You determine if the client needs a diagnosis
  • More freedom


  • It is harder to find clients and you turn more people away
  • Economic background of your clients are often less diverse
  • Asking for payment can feel awkward

You may want to decide to do a mixture of both approaches. There are so many quality clinicians that do both approaches. I transitioned to fee-only services in 2009. I am so glad that I made the switch; it has given me more freedom in services, best-practices, and assisting with client need.