Episode #688: Deciding Whether To Take Insurance Or Go Private Pay

Summary

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Abundant Practice Podcast

Episode #688: Deciding Whether To Take Insurance Or Go Private Pay
Host: Allison Puryear
Release Date: September 20, 2025

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Episode Overview

In this episode, Allison Puryear addresses one of the most pivotal early decisions for therapists going into private practice: should you start out taking insurance, or launch your practice as private pay only? Drawing from her extensive experience supporting thousands of therapists, Allison unpacks the practical, emotional, and financial realities of both routes. She provides actionable strategies, honest encouragement, and a free resource to help listeners clarify which path is right for them at this moment in their careers.

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Key Discussion Points & Insights

The Real Question Behind "Insurance or Private Pay?"

• Allison frames the question as a deeply personal one, not something to be determined by peer pressure, trends, or other therapists’ stories.
  • “Your decision needs to be grounded in your unique circumstances, your values, and your goals.” (03:15)
  • She urges therapists to “get really honest about why you’re asking this in the first place.”
    • Is it about fear, scarcity, or financial pressure?
    • Is it about having permission to build the practice you want?

Realities Where Taking Insurance Makes Sense

• When should you consider insurance?
  • Little or no savings.
  • Working in a draining agency job you need to leave ASAP.
  • Bills, dependents, or sole-provider responsibilities.
  • Low energy or limited time for marketing.
• Benefits of accepting insurance upfront:
  • “Taking insurance in the beginning can bring clients in the door more quickly. It reduces the amount of time you need to hustle to build up referrals.” (04:45)
  • Adds financial stability for a smoother transition out of agency work.

Trade-Offs of Taking Insurance

• Lower pay:
  • “You're going to get paid less... In many places, you might be getting 50% or even less of your private pay rate. That means you need two or three insurance clients to make the same as one private pay client. That's not just about the money, it's about the time.” (06:00)
• More paperwork, more sessions, more emotional labor.
• Transitioning later is hard:
  • “If you start with insurance and then decide to transition to private pay... you're eventually going to need to have an uncomfortable conversation with every client...” (06:53)
  • Many therapists stay stuck with insurance panels out of anxiety or fear of letting clients down.
  • But: “The conversation almost always goes better than people expect... many will stay, especially if you've built a strong therapeutic relationship...” (07:37)
• Insurance is increasingly unpredictable:
  • More audits and clawbacks: “Clawbacks are where the insurance company says you didn’t document adequately and you have to pay them back the money that they already paid you for those sessions.” (08:19)

Practical Tips for Navigating Insurance

• If considering insurance, start credentialing paperwork ASAP:
  • “Getting credentialed takes time. On average it's about three months... Even if you're on the fence, get the process started.” (09:09)
  • “You don't have to sign the contract if you change your mind, but if you wait until you're desperate for income, that's going to feel like an emergency.” (09:30)

When to Go Private Pay from the Start

• If you’re financially flexible or have a support system:
  • Six+ months of savings.
  • Partner/household support.
  • Agency job isn’t draining; you can start part-time.

Benefits of Private Pay

• Simpler logistics:
  • “While it's slower to build, it’s cleaner. You're not dealing with insurance paperwork, not waiting on reimbursements, not navigating the awkward 'I'm dropping your insurance' conversation.” (09:51)
• You’re building the exact practice you want from the beginning.
• In many cases, you may hit your income goals just as quickly—or even sooner.
  • “If insurance is only paying you $80 a session and your private pay fee is $175, you don't need nearly as many clients to hit your income goal.” (10:18)

Do the Math & Know Your Numbers

• “I'm always recommending doing the math. Get your actual numbers. Find out what insurance companies are paying in your area. Compare that to what your private pay fee would be.” (10:35)
• Consider both client volume and realistic marketing capacity.

Mindset & Values-Driven Decision Making

• No “right” answer—only what fits “you right now.”
  • “If you want to take insurance for the rest of your career, amazing. If you want to be private pay, amazing... what I care about basically is you make the choice that really, truly serves you.” (10:56)
• There IS room to change your mind later:
  • “It's not permanent. You get to evolve as your life evolves.” (11:28)

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Notable Quotes & Memorable Moments

• “You are allowed to build the practice you want. You can have a successful, full, profitable, private pay practice—that is absolutely possible.” (05:01)
• “There is no one right way. There’s only the way that works for you.” (03:00)
• “The conversation [about private pay transition] almost always goes better than people expect.” (07:37)
• "I've created a free worksheet to help you through this exact decision... It's going to help you think through your values, your needs, your current financial reality, your energy capacity, your goals." (10:40)
• “This isn’t about what’s right or wrong. It’s about building a practice that works to support your life, one that you can grow into, not out of—one that supports you as a human being, not just as a therapist.” (11:08)
• “You're doing great. You're asking the right questions. You're building something meaningful. And I'm really proud of you for doing it with integrity.” (11:32)

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Important Timestamps

• 01:27 — Listener question introduction: Should you take insurance at first or start private pay?
• 03:00 — The real question and how to approach it.
• 04:45 — When insurance is the best short-term choice.
• 06:00 — Trade-offs: Lower pay, more paperwork.
• 06:53 — Later transitions: The “uncomfortable conversation.”
• 07:37 — Most clients handle transition better than expected.
• 08:19 — Increasing challenges with insurance: audits & clawbacks.
• 09:09 — Credentialing logistics: Why to start paperwork early.
• 09:51 — Benefits of building private pay from the beginning.
• 10:35 — Do the math: Compare insurance reimbursement to private rates.
• 10:56 — No one-size-fits-all answer—make the choice that serves you.
• 11:32 — Encouragement and closing thoughts.

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Action Steps and Resources

• Download the Free Worksheet:
  • To clarify your decision-making, DM the word "sheets" to Allison, or visit abundancepracticebuilding.com.
• Do your own numbers:
  • Calculate client needs, income goals, and compare insurance vs. private scenarios.
• Start credentialing paperwork if considering insurance, even if undecided.
• Trust your process:
  • Know decisions are not permanent and can be revisited as your circumstances change.

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Tone and Takeaway

Allison’s tone is warm, direct, and deeply encouraging. She brings clarity and compassion, reassuring new private practitioners that they have full permission to design a practice that fits their needs and values right now—with practicality and self-compassion at the core.

“This isn’t about what’s right or wrong. It’s about building a practice that works to support your life... I’m really proud of you for doing it with integrity.” (11:08, 11:32)

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For more resources, free checklists, and support, visit abundancepracticebuilding.com.

Transcript

[A]

Foreign welcome to Ask Allison.

[B]

Y' all ask the questions about having.

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A fun and thriving practice and I answer them.

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We have a worksheet for you today.

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So you can bring this answer into your life. You can Access [e-mail] links where you'll also be able to ask any questions.

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You have for Ask Allison.

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If you want more support, we've got some free trainings in there too. If you can't get enough Ask Allison.

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Check out our YouTube channel for our.

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Entire Ask Allison library.

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Your practice is full.

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That's amazing.

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But here's the question.

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Is it actually the practice you want? Because just being full isn't the finish line. Having the practice you want is inside Limitless practice. You'll spend 13 weeks making the changes you've been thinking about for months, working fewer hours while making more money, creating a schedule that actually fits your life and saying yes or only to clients you love working with. We're going with a cohort model. You'll start and finish alongside other full therapists who are ready for more freedom and joy in their work. And spots are limited because I'm personally running every one on one with every person group call and the accountability check ins that we do each week. Doors close September 23rd at midnight. We start October 1st. Go to the Show Notes to join Limitless Practice before it sells out welcome.

[B]

Back to Ask Allison. Here's today's question. Should I start out taking insurance and then transition to private pay later on if I want to be private pay or should I start private pay? Super good question. So before I answer the question, I would like to thank our sponsor Therapy Notes. I've talked about them for years. You probably know their features by heart, but what really sets them apart is that they genuinely care about your experience. It's not just about troubleshooting. They actively implement user suggested features like Therapy search, secure messaging, real time insurance checks and their AI notes feature therapy fuel. Everyone at TherapyNotes believes in the product and they want you to love it too. Plus, they're independently owned, which means no venture capital and no pressure to prioritize investors over customers. This independence allows them to keep their prices fair, to focus on innovation and prioritize customer experience. With over 100,000 therapists already on board, they've proven you don't have to compromise success for quality. If you're ready to see it for yourself, go to therapynotes.com and use code abundant for two months free. All right, should you start off taking insurance or just start off private pay Short answer to this is it depends, which I know is not satisfying. It's not a clean, clear yes or no, and I wish it was that simple. But the truth is, it's one of those decisions that has to be based on your real life. Not someone else's inspirational story, not a social media post that says never take insurance, not what your grad school classmates are doing. Your decision to be grounded needs to be grounded in your unique circumstances, your values, and your goals. Here's the thing. I've had the immense privilege of helping literally thousands of therapists build and grow their practices. And one of the clearest patterns I've seen is this. There is no one right way. There's only the way that works for you. Instead of giving you a yes or a no, I want to help you ask the right questions. The questions that are actually going to move you closer to clarity. So let's start by getting really honest about why you're asking this in the first place. Sometimes when therapists ask this question, what they're really asking is, is it okay if I take insurance even though I want to be private pay? Or can I afford to hold out for private pay? Or do I have to settle for taking insurance to make ends meet? And that tells me the question isn't just logistical, it's emotional. It's about fear or scarcity or the tension between what we want and what feels available right now. So I want to start by saying this clearly. You are allowed to build the practice you want. You can have a successful, full, profitable, private pay practice that is absolutely possible. And you don't have to compromise your vision just because it feels hard right now. That said, there are times when reality matters more than our vision. There are seasons where we have to make temporary choices to stabilize ourselves so that we can build that vision down the road. So let's look at some of those realities. If you're in a place where you have little or no savings, if you are working full time in an agency or a job that is draining the life out of you that you need out of asap, if you have bills to pay, or people depending on your income, or you're the sole provider for your household, if you're desperate to leave your job and you don't have time or energy to do consistent marketing on top of it right now, then insurance may be the best move for you in the short term. Not because it's what you ultimately want, but because it helps you leave a situation that's hurting you faster. That matters. So taking Insurance in the beginning can bring clients in the door more quickly. It reduces the amount of time you need to hustle to build up referrals. It can feel like the more stable option, especially when you don't have a financial cushion. But I want you to go into that choice fully aware of the trade offs, because there are trade offs with whatever choice you make. So first, if you're going to take insurance, you're going to get paid less. It's just the truth. In many places, you might be getting 50% or even less of your private pay rate. That means you need two or three insurance clients to make the same amount of money as one private pay client. That's not just about the money, it's about the time. That's more sessions, more paperwork, more emotional labor that adds up quickly. Second, there's the issue of later. If you start with insurance and then decide to transition to private pay down the line, you're eventually going to need to have an uncomfortable conversation with every client that you've taken on through insurance. You'll have to tell them you're no longer in network and listen. I get why that's scary. Most therapists dread that conversation. I've seen people put it off for years. They tell themselves they'll transition soon with quotation marks, but the anxiety around letting people down or being perceived as greedy keeps them stuck. So here's what I want you to hear. The conversation almost always goes better than people expect. Yes, some clients will leave and go to the amazing referrals that you provide to them. That's okay. But many will stay, especially if you've built a strong therapeutic relationship and if you're offering support and transparency around the transition. But still, it's a hurdle, and I don't want you to be blindsided by it later or stay in a situation you don't want to be in for longer because you didn't kind of think through it on the front end. I want you to be able to plan for it. Third, insurance is getting more and more squirrely, so make sure your notes are solid. Amongst my students who take insurance, I'm seeing an increase in audits and clawbacks. Clawbacks are where the insurance company says you didn't document adequately and do you have to pay them back the money that they already paid you for those sessions? So if you decide to start with insurance on your journey to private pay, go in with your eyes open. Make sure that you have your cya, know that it's temporary. Get really clear on when you're Going to know that you need to switch to private pay. That might be based on savings, it might be based on consistent referrals, it might be when you're full. Figure that out. Know that it's a stepping stone if private pay is your goal. And know that you'll need to start planting the seeds for private pay down the line. You should do that as soon as possible. Also, if you're even considering taking insurance, I want you to start that paperwork immediately, right after this. Because getting credentialed takes time. On average it's about three months. And that's three months from when you apply to when you're actually in network and can start seeing clients. So even if you're on the fence, get the process started. You don't have to sign the contract if you change your mind. But if you wait until you're desperate for income, that's going to feel like an emergency. And I don't want you to be stuck waiting for approval when you need clients. Like right now. Now, let's flip the script. Let's say you're in a more flexible position. Maybe you have six months of savings. Maybe you have a partner who can support financially during the transition. Maybe your job isn't great, but it's tolerable so you can build a small private practice on the side while working a job you don't have to leave immediately. If that's you, then I want you to seriously consider building your private pay practice from the start. Because while it's slower to build, it's cleaner. You're not dealing with insurance paperwork, you're not waiting on reimbursements, you're not eventually navigating the awkward I'm dropping your insurance conversation. You're building the practice you actually want, the one that aligns with your long term goals. And in some areas, depending on insurance rate, your marketing, your niche, et cetera, you might reach profitability faster by going private pay. If insurance is only paying you $80 a session and your private pay fee is 175, you don't need nearly as many clients to hit your income goal. So even if you build more slowly, you might end up in the same or even better financial position in the same amount of time. That's why I'm always recommending doing the math. Get your actual numbers. Find out what insurance companies are paying in your area. Compare that to what your private pay fee would be. Know that it's going to be harder to get clients in the door in most places private pay than if you take their Insurance. So it's not apples to apples in terms of referrals. So use your figure to figure out how many clients you need in each of those models to hit your target income. Maybe that's replacing your current income first and then your next income goal. But do the math. I've created a free worksheet to help you through this exact decision. It's not here to convince you one way or the other. I really honestly don't have a preference. If you want to take insurance for the rest of your career, amazing. If you want to be private, pay the rest of your career. Amazing. So what I care about basically is you make the choice that really, truly serves you. This worksheet is going to help you think through your values, your needs, your current financial reality, your energy capacity, your goals. It's going to help you get some clarity around which model makes the most sense for you. Right now. You can DM the word sheets and I will send it your way, along with a full archive of all our other worksheets in this series. But at the end of the day, this isn't about what's right or wrong. It's about building a practice that works to support your life, one that you can grow into, not out of one that supports you as a human being, not just as a therapist. So whether you start with insurance or go private, pay from the beginning. What matters most is making that choice with intentionality. Not out of fear, not out of ignorance, not because you feel like you should, but because it's what fits you best right now. And I promise you're allowed to change your mind later. Either way, it's not permanent. You get to evolve as your life evolves. So you're doing great. You're asking the right questions. You're building something meaningful. And I'm really proud of you for doing it with integrity. All right, I'll talk with you later. Your practice is full.

[A]

Congrats. But are you secretly stuck in golden handcuffs? If you're cramming in 7pm sessions glued to insurance panels or just whispering, I can't do this till retirement, it's time for limitless practice. In 13 weeks, you'll work less, make more, and enjoy your business again. Spots are limited. Doors close. September 23rd at midnight. We start October 1st. Snag your spot with the link in the show notes. If you're ready for a much easier practice, therapy Notes is the way to go. Go to therapynotes.com and use the promo code abundant for two months free.

[B]

I hope that helped.

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If you have questions for Ask Allison.

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Or you want to get your hands.

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On the worksheet for this episode, go to abundancepracticebuilding.com Links if you're listening, you.

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Probably need some support building your practice.

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If you're a super newbie, grab our free checklist using the link in the show notes. I'd love for you to follow rate and review, but I really want you to share this episode with a therapist friend. Let's help all our colleagues build what they want.