Why Many Therapists Don’t Take Insurance (The Ethical Conflict of the DSM)
Written by Maggie Dickens, LPC-S | Online Anxiety Therapy for High-Achieving Women in Texas and Florida https://catharticcounseling.com | (Approximately 5 minute read)
The DSM Problem: The Ethical Conflict of Diagnosis and the Medical Model
The DSM (Diagnostic and Statistical Manual of Mental Disorders), published by the American Psychiatric Association, is the gold standard for psychiatric diagnosis. It is also directly linked to health insurance coverage and payments (which is why many therapists don’t take insurance; but more on that in a bit). However, its origins and medical model-centered approach fundamentally conflicts with person-centered healing and the ethical need for privacy. It reduces human complexity to codes, often pathologizing understandable reactions to a messed-up world.
I know this conflict well. During my graduate school diagnostics final, I actually cried. I was given about five sentences per case vignette and had to assign a complex diagnosis and treatment outline. It felt so incredibly icky and wrong because I had so many more questions! I wasn’t ready to label a human being with such minimal context.
The Origins: How the DSM Was Designed to Pathologize the “Othered”
The DSM’s history is not rooted in humanistic compassion; it’s a product of the mental health system that is rooted in anti-woman, anti-person of color, anti-poor, and anti-differently abled bias.
Systemic Bias
The DSM was originally built by the American Psychiatric Association to aid medical doctors and provide a framework for medical treatment (like prescribing medication). In the history of psychiatry, the medical and psychiatric fields have villainized anything “othered”—anything non-upper-class white male:
- Anti-Woman Bias: Conditions like “Hysteria” were once diagnoses reflecting only societal discomfort with women’s emotions and autonomy.
- Pathologizing the “Other”: Historically, the manual has been used to label normal emotional responses to systemic stress as individual dysfunction.
As a childfree woman, I realize that even centuries ago, my choices might have been evidence of “madness” or “moral deficiency.” Yet, this is one of the “sanest” things I’ve done for my life.
Following the Money: The Role of Big Pharma
Later versions of the DSM have been heavily influenced by the pharmaceutical industry. ABC news wrote and article (here) that talks more about this. The manual becomes centered on treatable, symptomatic clusters of issues designed to sell medicine, not on the holistic human experience. The focus shifts from “What has happened to you?” (Feminist Therapy) to “What can we fix?” (Medical Model).
The Insurance Abuses: Why the DSM + Big Pharma Forces Unethical Practice
*These are 3 of my top reasons (and primary reason why many therapists) don’t take insurance in my practice.
This medical model, where the client is reduced to a code, is exploited by the insurance industry, creating an ethical conflict for any therapist working in-network with insurances:
- Mandatory Diagnosis: Insurance companies demand a descriptive, often serious diagnosis after ONE SESSION (!) to approve coverage, forcing therapists to label clients prematurely.
- Control & Oversight: Insurance companies dictate session limits and impose their own outlines for “success” for each diagnosis, overriding the personalized needs of the client.
- Privacy Violation: The diagnosis is communicated to a third-party payer, becoming part of your permanent medical record—a violation of privacy for a high-achieving woman already struggling with shame.
Diagnosis as Permanent Identity, Not Temporary Experience
The fundamental flaw is that the DSM’s labels are often seen as permanent—a reflection of who the person is—not, as is often the case, a temporary experience, a reaction to the world around them, a hormonal response, or simply a difference that isn’t inherently in need of “fixing.”
My Ethical Stance: Why I (and many therapists) don’t take insurance … Conservative Diagnosis and Systems-Focus
This is why, throughout my entire 15+ years of work, I have always been conservative in my diagnosis and love working outside of insurance. This allows me to focus on person-centered healing rooted in humanistic and feminist therapy and not be forced to label someone as something they aren’t just for them to get the mental health support everyone needs.
When I worked in a major hospital system and pain clinic in Houston, Texas, the vast majority of my clients had medical conditions and real-life emotional reactions to these conditions—depressive symptoms, anxiety—because they were always in pain. This isn’t a disorder; this is real life. Our work, while using powerful tools like Hypnosis for chronic pain, was still about relationships, anxiety, sadness, and worthlessness. It was the same work I do now, but without having to say these understandable and dare I say, normal/expected reactions to the world, are a “disorder” or that something is “wrong” with you.
You deserve therapy that sees your humanity, not a diagnosis code.
Resources for Healing Without the Label:
- What is Feminist Therapy? Healing Beyond the Patriarchal Lens
- Why I (and many therapists) Don’t Take Insurance – FAQs/Fees
- People-Pleasing Recovery: Healing the Trauma of Chronic Compliance
- Online Therapy Services for Women in TX & FL
FAQ Section
Q: Does my cash-pay therapist give me a diagnosis?
A: A cash-pay therapist is not required to submit a diagnosis to an insurance company. We will only give you a diagnosis if it is clinically necessary for treatment planning, but we are never forced to label you just for billing purposes, protecting your privacy.
Q: What is person-centered therapy?
A: Person-centered healing is a humanistic approach focused on the client’s inherent capacity for growth, self-actualization, and autonomy. It stands in direct contrast to the medical model, which focuses on diagnosing and treating pathology.
Ready for therapy focused on healing, not diagnosis? Book a Consultation for Confidential, Systems-Focused Therapy.
