How to Decide Between Private Pay and Insurance in ABA Therapy Billing

ABA therapy is one of the most effective treatments for children and adults with autism spectrum disorder. It’s been around for decades and can be life-changing for families. But before the first session even begins, there’s a decision every family has to make—how to pay for it.

Two main payment options are on the table: private pay and insurance (including Medicaid if you qualify)It looks like a simple decision at first. But the reality is, this decision can impact when therapy starts, how many hours your child gets, and how much you pay out of pocket over time.

In this guide, we’ll go over the pros and cons of each option, what matters most, and give you a step-by-step process to make the choice that’s right for your family.

Why Your ABA Therapy Payment Choice Matters

Private pay or insurance isn’t just about cost; it’s about access, flexibility, and consistency of care. If you choose an option that doesn’t match your child’s needs, you could face:

• Delays in starting therapy because of pre-authorization or waitlists

• Reduced therapy hours because of coverage caps

• Surprise bills for services you thought were covered

• Trouble adding extra services like social skills groups or parent training

The good news is that by understanding both options, you can make a confident, informed decision that supports your child’s progress without breaking the bank.

Read More about payment options

The Dilemma Families Face

Many of us are in the following situation:

• Private pay sounds easier because you skip the insurance paperwork and approvals. You can usually start therapy right away and set the schedule you want. But paying full price can be expensive—especially if your child needs 20-40 hours a week.

• Insurance or Medicaid can save thousands of dollars but comes with conditions. You might have to wait for prior authorization, work within network rules or stick to certain CPT codes for billing.

To make things even more confusing, insurance coverage for ABA therapy varies. State laws, your insurance plan, and your provider’s network status all come into play. Even within the same city, what one family has insurance for may not be the same for another.

So the big question is which payment option is right for us?

Step 1: Know Your Child’s ABA Therapy Needs

You should have a clear idea of how your child will be treated before comparing private pay and insurance.

Here’s what to consider:

• Weekly Hours – A Board Certified Behavior Analyst (BCBA) will recommend the number of hours per week. For younger children with autism, this is usually 20-40 hours.

• Type of Services – Will your child have one-on-one sessions with a Registered Behavior Technician (RBT), parent training sessions, group therapy, or social skills programs?

• Length of Therapy – Is this a short-term intervention for a few months, or will therapy go on for several years?

When you know what your child needs, you can estimate costs for private pay and insurance.

Step 2: Understand Your Insurance or Medicaid Coverage

You should know what your plan covers if you plan to utilize insurance. Get written confirmation from both your provider and your insurance rather than making assumptions.

Key questions to ask:

1. Does my plan cover ABA?

   1. Not all plans do, and Medicaid varies by state.

2. What CPT codes are approved?

   1. Common ABA codes are:

   2. 97153 (adaptive behavior treatment by technician)

   3. 97155 (treatment by a BCBA)

   4. 97156 (parent/caregiver training)

3. What are my out-of-pocket costs?

   1. Ask about deductibles, copays, and coinsurance for these codes.

4. Are there coverage limits?

   1. Some plans have weekly or annual time limits.

5. Is pre-authorization required?

   1. This can delay the start of therapy by weeks.

6. Do I have to use in-network providers?

   1. Being out of network can result in higher costs or no coverage at all.

Step 3: Compare Costs and Flexibility

It's time to compare now that you are aware of your insurance and your child's requirements.

Private Pay for ABA Therapy

Pros:

• Immediate start—no waiting for approvals

• Flexible schedules to fit your child

• Choose any provider, even if they’re out of network

Cons:

• Higher costs: In the US, RBT rates are $50-$70/hour, and BCBA rates are $120-$200/hour

• You pay all costs unless you have another funding source

• Insurance or Medicaid for ABA Therapy

Pros:

• reduced out-of-pocket expenses significantly (for qualified households, Medicaid can be $0).

• Negotiated rates with providers

• Long-term cost savings for ongoing therapy

Cons:

• Less flexibility in scheduling

• Limited therapy hours

• Waiting for prior authorization

Step 4: Consider the Hybrid Approach

Combining the two is sometimes the best option.

For example:

• Use insurance for the core therapy hours (e.g., 20 per week)

• Pay privately for extra hours, parent training, or non-covered programs

• Start with private pay while waiting for insurance approval, then switch over

You can still have the flexibility of private payment and the financial protection of insurance while yet giving your child dependable care in this way.

Why This Works

By following these steps, you get:

• Financial Clarity – You know exactly what you’ll pay, no surprise bills.

• Better Care Planning – Your therapy plan is based on clinical recommendations, not coverage limits.

• Confidence – You’re making an informed decision that balances cost, flexibility, and quality.

• Ongoing Flexibility – You can revisit the decision every 6-12 months as needs or coverage change.

ABA Billing Services

ABA billing services can be useful if all of this is too much to handle.  These companies handle ABA therapy billing, insurance rules, and submit claims correctly. They can:

• Verify benefits before therapy starts

• Handle pre-authorization paperwork

• Submit claims and track payments

• Appeal denials to avoid gaps in care

By outsourcing this to the experts, you can focus on your child’s progress instead of wrestling with insurance.

Conclusion

The choice between private pay and insurance for ABA therapy is not universally applicable. It depends on your child’s needs, your financial situation, and your insurance or Medicaid plan. It's crucial to get all the information prior you committing—compare actual costs, weigh the trade-offs in flexibility, and consider if a hybrid model could give you the best of both worlds. If you need help with the billing side, contact Cube Therapy Billing. We have a 98.9% payment recovery rate, so you get the reimbursements you’re owed without the hassle. 

Above all, remember: This decision is about more than money. It’s about making sure your child gets the right care, at the right time, for the best possible outcome.

FAQ

1. Can I start with private pay and switch to insurance later?

Yes, a lot of families actually use a hybrid plan that combines the best aspects of both approaches. You can start therapy immediately with private pay while waiting for prior authorization or insurance approval to come through. Once insurance is active, you can switch over for the core hours and keep private pay for extras like social skills groups, parent training, or additional hours. This gives you speed and flexibility to start therapy right away and long-term cost savings of using insurance for as much as it covers.

2. How many years will insurance cover ABA therapy?

Insurance covers ABA as long as it’s medically necessary and the child continues to benefit. That means ongoing reassessment—which in many cases allows coverage to last several years. In practice many kids receive ABA 3 to 5 years but it depends on progress, goals and how your plan defines necessary.

3. How much time does it take for insurance to authorize ABA therapy?

Good news, it’s not instant. The majority of insurers process prior permission in two to six weeks. Delays happen when clinical documentation is incomplete or submitted to the wrong department. Some providers get faster turnaround by having a dedicated billing team that knows each insurer’s quirks. If you’re paying privately in the meantime, you skip that waiting game.