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Private Pay vs Insurance in ABA: Which Pays More and Works Best
- Veronica Cruz
- Aug 12
- 6 min read
When starting or reassessing your ABA therapy practice, one major decision stands out: Should you rely on private pay or accept health insurance from providers? This choice will shape your revenue, client accessibility, and even how you handle the medical billing process. The decision isn’t one to make on assumptions—you need to understand how each model works, how it affects your earnings, and which aligns best with your long-term goals. Let’s break it down.
Understanding the Two Models
Private Pay
Private pay means you’re covering the costs yourself — either directly from your pocket or through a private pay health insurance plan you’ve purchased separately. You’re not going through health insurance from company benefits, and there’s no middleman controlling which sessions you can have.
This setup is common when:
Insurance doesn’t cover ABA therapy.
Families want more flexibility in session length or frequency.
The provider doesn’t accept insurance.
Private pay can be a private personal insurance policy, private individual insurance plans, or simply paying cash. You can even build your health insurance plan through private marketplace insurance options if you want coverage for multiple health services, not just ABA.
Insurance
Insurance means your therapy costs go through health insurance from an employer plan, private health insurance for businesses, or public coverage like Medicaid. Providers bill the insurer, and you usually only pay a copay or deductible.
For providers, this means going through the medical billing process and sometimes working with ABA billing companies to handle claim submissions. For families, it means the cost of therapy is reduced — but the trade-off is less freedom to customize the therapy schedule.
Insurance can include:
Private insurance coverage from an employer.
Full health insurance plans you buy yourself.
Private health insurance corporate coverage for employees.
Medicaid billing companies manage claims if you qualify.
Which Pays More?
Private Pay
Private pay arrangements give providers more flexibility and often lead to higher hourly earnings. ABA treatment sessions typically cost between $120 and $150 per hour. However, in certain regions—especially where living costs are higher or providers have advanced credentials—rates can climb to as much as $250 per hour.
Control Over Pricing: Providers set their rates, without being bound by negotiated insurance fee schedules.
Instant Payment: There are no hold-ups due to slow reimbursements or claim denials; payment is provided in full or at the moment of service.
Staff Compensation: Practices offering private pay often have more room to offer higher wages to staff because they keep more of the session fee.
This model is attractive for providers managing private practice medical billing or private practice insurance billing, where payment predictability matters.
Insurance Coverage
Insurance coverage, including private medical benefits, full health insurance plans, and private health insurance with mental health benefits, changes the equation.
Rates: Generally speaking, insurance reimbursement is less than private pay rates. Health insurance companies and providers negotiate rates.
Client Volume: Accepting health insurance from the company or private health insurance for businesses can increase the client base, offering steady caseloads.
Affordability for Families: Families often only pay co-pays and deductibles, which makes services accessible to those who couldn’t afford private pay health insurance costs.
Regulatory Requirements: Some states mandate coverage for ABA therapy, and Medicaid billing companies can make services available to low-income families.
While private pay may pay more each session, insurance can lead to a more steady and predictable cash source.
Which Works Best?
Private Pay Advantages
Faster Access: No delays for prior authorizations or insurance approvals.
Flexible Sessions: Providers can adapt therapy frequency, duration, and focus without insurer restrictions.
Privacy: No requirement for a formal autism diagnosis in insurance records.
Simplified Billing: Fewer administrative burdens compared to the complexity of billing for mental health providers through insurance.
However, private pay limits the client pool to those who can afford private personal insurance or private pay health insurance plans, which can be cost-prohibitive for intensive ABA.
Insurance Advantages
Wider Accessibility: More families can receive therapy through private health insurance corporate plans, private marketplace insurance, or even private business insurance.
Reduced Out-of-Pocket Costs: Families often pay less upfront compared to paying for their health insurance or getting their own health insurance plans.
Steady Demand: Insurance expands the client base, making income more consistent for providers.
Broader Market Reach: Practices can market to companies offering private health insurance for businesses or private individual insurance plans.
The tradeoff is navigating insurance-mandated requirements, such as detailed treatment plans, approved CPT codes, and strict documentation for ABA insurance billing.
Quick Comparison Table
Aspect | Private Pay | Insurance Coverage |
Therapist Earnings | Higher per session | Lower per session, but more consistent |
Family Cost | $120–$150+ per hour, full cost | Usually, co-pays/deductibles only |
Access/Wait Time | Immediate | May have delays |
Session Flexibility | High | Restricted by insurance requirements |
Documentation | No diagnosis required | Diagnosis and documentation required |
Client Base | Limited to high-income clients | Broad, more diverse |
Financial Risk | High if caseload drops | More stable, but risk of delayed payments |
Cost Factors to Consider
Let’s be real — cost matters for both sides.
Private Pay: You control the rates, but may need to offer private business insurance-style payment plans to attract more families.
Insurance: Families pay for less insurance up front but might face copays, deductibles, or limits.
If you’re running a business
Private health insurance small business coverage can be offered to employees as a benefit.
Private health insurance for businesses or private health insurance corporate plans can attract staff.
If you’re a family
Private individual insurance plans or private pay insurance options might make sense if your employer doesn’t offer coverage.
You can either buy health insurance directly through a marketplace or create a plan tailored to your needs, giving you control over coverage, benefits, and what you’re willing to spend.
Tips for Deciding
Run a medical billing analysis — know your potential income with each model.
Understand AR Days — if your average is 25 days or 30 days, plan cash flow accordingly.
Know your audience — local income levels and insurance coverage rates matter.
Use private practice billing services or ABA medical billing experts if you choose insurance-heavy models.
Stay compliant — whether private practice insurance or medical insurance health insurance, documentation is key.
Is It Better for ABA Providers to Go In-Network or Private Pay?
Choosing between being an in-network provider and relying solely on private pay depends on a few essentials. If your community is more likely to have health insurance from company plans and can’t manage high out-of-pocket costs, accepting insurance broadens access. In higher-income areas where families can afford private pay health insurance, cash-based services may work better.
Your financial goals matter too—private pay insurance plans give you fee control and flexibility, while insurance brings a larger, steadier client base. Smaller practices with limited admin resources may lean toward private pay, while handling the medical billing process for insurance requires more infrastructure.
At Cube, we help ABA providers stay adaptable by managing both private practice medical billing and ABA insurance billing. Whether you choose private business insurance clients or full insurance networks, our team ensures accuracy and faster payments so you can focus on therapy, not paperwork.
FAQ
1. What is private pay in medical billing?
Private pay means clients pay the full session fee directly, without using insurance. It gives providers payment flexibility and faster cash flow, but limits access for cost-sensitive families.
2. How does insurance coverage of ABA therapy cost compare to private pay?
Insurance usually reduces family costs through copays and deductibles. While private pay ranges $120–$250 per hour, insurance lowers that, though deductibles, coverage limits, and session restrictions may still apply.
3. Is private pay always more expensive for families?
Yes. Without insurance, families cover the entire ABA therapy cost, which for intensive programs can total thousands monthly, making it unaffordable for many without substantial financial resources.
Conclusion
In ABA, the right answer isn’t just private pay or insurance—it’s the model (or mix) that maximizes net collections per clinical hour while keeping administrative costs and cash-flow lag within acceptable limits. Private pay gives you control and faster payments. Insurance gives you scale and market reach. The right blend, backed by disciplined billing operations, is what truly pays more and works best.
Reach out to us to explore how our expert medical billing services can support your practice and make your payment process smoother, faster, and more accurate.
