September 20, 2025 • 12 mins
In today’s Ask Allison, we’re diving into whether starting with insurance is a smart move—or if you should go private pay from day one.
We’ll walk through the trade-offs, the numbers that matter, and how to choose the path that actually works for your life—not just what Instagram says you "should" do.
By the end, you’ll know exactly how to make this decision with clarity, confidence, and zero guilt.
Sponsored by TherapyNotes®: Use promo code Abundant for 2 months free
Links You’ll Love:
- Is your practice full but you're miserable? Join our Fall 2025 Limitless Practice cohort: https://www.abundancepracticebuilding.com/lp
- Grab our FREE tools to grow your practice—weekly worksheets, the Tasky Checklist, and more: www.abundancepracticebuilding.com/links
- Ready to fill your practice faster? Join the Abundance Party today and get 75% off your first month with promo code PODCAST: www.abundancepracticebuilding.com/abundanceparty
- Have a question for me about practice building? Submit it via our Ask Allison form, and I'll add it to the queue: https://www.abundancepracticebuilding.com/ask_allison
- Prefer video? This episode is also available to stream on our YouTube channel!
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:07):
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to Ask Alison.
Y'all ask the questions about having a
fun and thriving practice and I answer them.
We have a worksheet for you today so
you can bring this answer into your life.
You can access that at abundancepracticebuilding.com slash
links where you'll also be able to ask
any questions you have for Ask Alison.
If you want more support, we've got some
free trainings in there too.
(00:28):
If you can't get enough Ask Alison, check
out our YouTube channel for our entire Ask
Alison library.
Your practice is full?
That's amazing.
But here's the question.
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
(00:49):
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 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
(01:11):
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 back to Ask Alison.
Here's today's question.
Should I start out taking insurance and then
(01:32):
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.
(01:52):
They actively implement user-suggested features like therapy
search, secure messaging, real-time insurance checks and
their AI Notes feature therapy fuel.
Everyone at Therapy Notes 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
(02:14):
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
(02:34):
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.
(02:55):
Your decision to be grounded needs to be
grounded in your unique circumstances, your values and
your goals.
So 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.
So instead of giving you a yes or
(03:15):
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
(03:36):
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
(03:57):
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
(04:18):
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
(04:40):
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,
(05:01):
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.
(05:21):
That means you need two or three insurance
clients to make the same amount of money
as one private pay client.
And 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,
(05:42):
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.
(06:04):
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
(06:25):
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.
(06:45):
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.
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
(07:07):
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
(07:29):
after this, because getting credential 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
(07:51):
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
(08:12):
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 longterm goals.
And in some areas, depending on insurance rate,
(08:33):
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
(08:54):
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, um, in
(09:15):
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.
(09:36):
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.
And this worksheet is going to help you
think through your values, your needs, your current
financial reality, your energy capacity, your goals.
Um, it's going to help you get some
clarity around which model makes the most sense
(09:57):
for you right now.
So you can DM the weird 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.
Um, one that you can grow into, not
out of one that supports you as a
human being, not just as a therapist.
(10:17):
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.
(10:38):
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.
Great.
I'll talk to you later.
Your practice is full.
Congrats.
But are you secretly stuck in golden handcuffs?
If you're cramming in 7 p.m. sessions,
glued to insurance panels, or just whispering, I
(10:59):
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.
(11:25):
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.
I hope that helped.
If you have questions for Ask Allison, or
you want to get your hands on the
worksheet for this episode, go to AbundancePracticeBuilding.com
(11:45):
slash links.
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to Ask Alison.
Y'all ask the questions about having a
fun and thriving practice and I answer them.
We have a worksheet for you today so
you can bring this answer into your life.
You can access that at abundancepracticebuilding.com slash
links where you'll also be able to ask
any questions you have for Ask Alison.
If you want more support, we've got some
free trainings in there too.
(00:28):
If you can't get enough Ask Alison, check
out our YouTube channel for our entire Ask
Alison library.
Your practice is full?
That's amazing.
But here's the question.
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
(00:49):
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 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
(01:11):
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 back to Ask Alison.
Here's today's question.
Should I start out taking insurance and then
(01:32):
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.
(01:52):
They actively implement user-suggested features like therapy
search, secure messaging, real-time insurance checks and
their AI Notes feature therapy fuel.
Everyone at Therapy Notes 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
(02:14):
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
(02:34):
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.
(02:55):
Your decision to be grounded needs to be
grounded in your unique circumstances, your values and
your goals.
So 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.
So instead of giving you a yes or
(03:15):
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
(03:36):
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
(03:57):
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
(04:18):
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
(04:40):
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,
(05:01):
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.
(05:21):
That means you need two or three insurance
clients to make the same amount of money
as one private pay client.
And 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,
(05:42):
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.
(06:04):
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
(06:25):
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.
(06:45):
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.
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
(07:07):
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
(07:29):
after this, because getting credential 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
(07:51):
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
(08:12):
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 longterm goals.
And in some areas, depending on insurance rate,
(08:33):
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
(08:54):
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, um, in
(09:15):
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.
(09:36):
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.
And this worksheet is going to help you
think through your values, your needs, your current
financial reality, your energy capacity, your goals.
Um, it's going to help you get some
clarity around which model makes the most sense
(09:57):
for you right now.
So you can DM the weird 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.
Um, one that you can grow into, not
out of one that supports you as a
human being, not just as a therapist.
(10:17):
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.
(10:38):
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.
Great.
I'll talk to you later.
Your practice is full.
Congrats.
But are you secretly stuck in golden handcuffs?
If you're cramming in 7 p.m. sessions,
glued to insurance panels, or just whispering, I
(10:59):
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.
(11:25):
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.
I hope that helped.
If you have questions for Ask Allison, or
you want to get your hands on the
worksheet for this episode, go to AbundancePracticeBuilding.com
(11:45):
slash links.
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