The Therapy Business Podcast
We know how challenging growing a therapy practice can be, and don’t think it should require an accounting degree just to run your business. If you own a solo or a group practice, we’re here to help you build a business that creates more time, makes more money and serves more people.
The Therapy Business Podcast
How ACA Tax Credit Expiration Could Hit Therapy Practices And What To Do Next
Clients may face doubled marketplace premiums, which could cut coverage, increase out-of-pocket costs, and reduce session frequency. We map concrete steps to protect revenue, support clients, and diversify leads while staying grounded and focused on care.
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*Intro/outro song credit:
King Around Here by Alex Grohl
As of this recording, the premium tax credits tied to the Affordable Care Act are set to expire. This means that a lot of your clients are heading into 2026, facing a huge increase in their monthly premiums for health insurance. This could, depending on your business, have an indirect or direct effect on you, your profitability, and your finances. We're going to talk through what that looks like for both practices that are accepting insurance or not, and how you can make sure that you get through this, keeping your business profitable and still serving your clients in the best way possible. My name is Craig, and I'm the owner of Daisy Financial Coaching. Our team is on a mission to make your therapy practice permanently profitable. If you own a solo or group practice, we're here to help you build a business that creates more time, makes more money, and serves more people. This is the Therapy Business Podcast. Now I know this is kind of a political topic we're digging into with Congress voting on the Affordable Care Act and what those premiums could be doing to people in 2026. I'm going to be keeping politics completely out of this because what I really want to focus on is the people who are going to be affected and the business owners, you who might see a hit on your lead generation, a hit on your revenue, a hit on how many clients your even your current clients, how often you're getting to see them and what revenue they're bringing into your business. So we're going to be focusing on those pieces regardless of where you stand politically and your viewpoints on what's happening right now with the Affordable Care Act. So let's talk about what's going on and what effects are going to be happening. Now, if you accept insurance in your business, you're going to see a direct effect from this, most likely. Those who are not accepting insurance, however, you're still facing some kind of impact. And I want to walk through why that is and how it could affect you. So first I'm going to start with those who are accepting insurance in your practice. So people are going to be seeing a premium increase on their health insurance. They're estimating the average person's premium, if they are using the open marketplace, are going to see their premiums double monthly. So as you're looking at those who are utilizing insurance for their therapy, they're facing the monthly payment, the monthly premium for their insurance, doubling in a lot of cases for the average person. How does this affect you? Well, most likely that means if they can't afford the new premium, they're going to be looking at other options. Even if they could afford it, they're probably still going to look at options and say, okay, what about a lower tier coverage? They might find coverage that doesn't cover mental health benefits or mental health services. They might move to one that has even just maybe it covers it, but less than the other one before. Those clients who are seeing you that are paying through insurance, if they move to a plane that's not paying through insurance anymore, there's a good chance that you might see them cancel, reduce the frequency of how often they're coming to therapy. If they're on a weekly basis right now, they might shift to a bi-weekly or a monthly rhythm. We you're potentially facing a hit from a lot of your clients. Now, depending on how many clients you have who are paying through insurance, that could dictate what the impact could be. There's a lot of factors that are going to come into play. Their income could affect this. They may pay more in their premium, but still be financially stable enough to not affect their monthly, weekly, bi-weekly therapy sessions. But we want to be aware of what that impact could be. So they're going to go to that lower that lower tier. Could they afford it? Could they not? Be ready for that. Be prepared. Get to know your numbers. That's what I always recommend. How many clients do you have who are on insurance, who are utilizing their insurance benefits for their therapy sessions, and kind of get familiar with what that could be before heading into the new year? Now, if you're not accepting insurance, so those of you who are private pay only, you're not out of the woods. Higher premiums on health insurance means less expendable income. And they're gonna likely a lot of your clients, your patients, are gonna have to make some cuts. If they are paying out of pocket for their therapy, and then their health insurance is doubling over here, they may decide to same as I was saying with those accepting insurance, they may decide to go from weekly to bi-weekly, or they may decide to cancel altogether because they just don't have the funds. The money they were spending on therapy sessions is now going towards their health insurance premiums. So things to keep in mind that you could see an effect, there could be a ripple effect that is going to be hitting your clients. So we want to just mentally prepare for this. Like I said, if you are accepting insurance, it's how many clients do we have that are paying and utilizing their health insurance benefits for therapy? If you can figure out what percentage of your clientele that is, that doesn't mean that every single one of them is going to be affected. A lot of them are using their employer benefits. So it really is those who are utilizing the open marketplace and those who were eligible for tax credits who would be affected. But there's a lot of Americans who are getting those benefits. So just knowing how many are actually using insurance can help at least weed some of that out and say, okay, you know, 70% of our clientele is paying through insurance. So what could that potentially look like if half of those people end up needing to reduce their frequency? You can see where you might have an impact. Preparing by talking to your clinicians. If you have a team, letting them know what's going on, you know, they may already have a pulse on it right now, or they may be hearing in the news that the ACA benefits, tax premiums are going away, and they may not even realize that that could affect them in some capacity. So sitting down, having a team meeting, and talking through exactly what I'm talking through today of what could potentially be happening. Now, as we know, anything can happen back in 2020 when the pandemic hit, a lot of therapy practices were freaking out because they're saying people can't leave the house. How are they going to come to therapy? There was a lot of concern that their businesses were going to see a huge dip in revenue, and I know some did, but for the most part, the industry increased. We saw a big spike in people prioritizing their mental health and wanting to seek out therapy during the pandemic. And so we saw a huge spike both in 2020 and 2021 in revenue for a lot of practices out there. So me talking through this, saying it's going to hurt you negatively, we can't predict the future. So if these tax credits, if the vote if it if they expire, if the vote doesn't protect it and have them go into 2026, we can assume there's going to be a negative impact, but we really don't know. So I don't want you freaking out or going into 2026 scared. I just want us going in with a reality and being ready for a worst case scenario. Hopefully, we just don't even see a ripple effect. Who knows? There could be the financial added stress might drive people who to finally take that step to get some support. There's a lot of different factors, but we are focusing on what you can do to mitigate risk. And that is educating your clinicians, knowing your numbers so that you have a good idea of what impact you could be potentially facing as you step into 2026. Now, the other thing you can do is start thinking through pricing options. If you are only doing insurance and then flat rate private pay, it might you might be thinking want to start thinking through some different pricing options to help with those clients who will who will have an impact on their insurance. So that might mean a sliding scale. So shifting to, you know, here's our private pay rate, and it just depends on income level or whatever factors, the the rate per session may go up or down. Doing sliding scales, we just want to be careful that we don't take on too many on the lower tier. So if you have a team of clinicians monitoring how many discounted clients they have on their roster, because if they're seeing 20 clients a week, you don't want 15 of them to be on the bottom end of what they're paying, because then your revenue is going to take a hit and your clinician's not going to be making as much money if they're on a commission split. So, really, we want to just monitor and make sure that a majority of their clients are paying full or paying through insurance and then the sliding scale that we are aiming for, not overloading your clinicians with too many sliding scales. Now you can also look at a reduced rate for those losing coverage. And a lot of times that is just what was insurance reimbursement covering, and that's their new payment. So let's say your private pay is$200 per session, a client was paying through insurance and you were getting reimbursed$100 per session, then those who have lost coverage, offering them to pay private pay at$100 per session rate, that's always an option too. Once again, monitoring how many you are actually taking on and allowing to do that because we don't want to overload your clinicians with too many reduced rate clients. But at the same time, they are, if we're doing that really on your bottom line or even your top line, you're not seeing a difference. The insurance company was paying you$100 per session anyway. So offering them that for an out-of-pocket private pay is not going to hurt you as drastically. However, you're still doing this either option, there's a still a good chance they're going to reduce frequency. Offering these payment options is mostly going to help with not losing clients altogether and still making sure that you can get them some level of support. But, you know, they were used to maybe paying their copay of$25 and now it's going to be$100. There's affordability right there. So they may have to decide, okay, I can only come uh once or twice a month instead of every week. Then looking ahead, I want to look ahead beyond 2026, beyond this exact scenario. How dependent is your business on insurance? You know, I don't necessarily think that accepting insurance is bad for therapy practices. I don't. Um I think there is pros and cons, and I think a lot of it has to do with your philosophies and your how you view affordable mental health care. However, when we are leaning heavily on that insurance, you can see that we are at the mercy of a lot of different things. All of it to say, going back to what I said earlier in the episode, those accepting private pay are not risk-free right now. They are not out of the woods. It's just the level of risk is less because it's not going to be direct. It's everyone, they've been paying private pay all along. They're not going to lose coverage all of a sudden. They just might have their monthly expenses go up, which could affect them indirectly. How dependent are you on insurance? Are you seeing that 90 plus percent of your business is are insurance clients? We might want to make some start shifting that percentage down as best as we can so that you are getting more private pay clients in the door. That is one of the biggest struggles that therapy practices face. We they start their business, they start accepting insurance because they need leads. They need clients, they need people in the door. Then they grow and grow, and then they hire clinicians, and all of a sudden they are just dependent on this lead flow. And they're going, Well, I can't cancel insurance because if I stopped accepting insurance, I don't have anybody coming in the door looking for private pay. So we need to create new ways of generating leads, whether that's content creation, SEO, uh, networking, referral partners, finding ways to generate more leads on your own that maybe you could start getting more private pay clients in that way. Now, I don't ever recommend just cutting insurance all in one sweep. So if you've been thinking about shifting from insurance to private pay, this could be an opportunity to do so, but we want to be cautious. What we don't want to do is turn around and cut all of our insurance benefits and then just go, we're going all in on private pay. So look at your insurance providers and maybe look at the ones who are reimbursing at the lowest amount. Maybe that's those are the first ones to go. You could also look at balance, which ones, what percentage of your clients are accepting a specific insurance? Because when you stop accepting that insurance, you're gonna have those conversations with those clients, you might lose them. And so you might be helping them find other therapists who do accept that insurance as you shipped into private pay. You might be offering them that sliding scale or that reduced rate. So having that plan in advance is really important because when you start letting insurance people go, then in turn you want to have a game plan for how can we still offer service to you in some capacity so that we can still help you. This could be that opportunity. And so we slowly let those go. I only recommend that if you are already sitting here with a waiting list, but also if you are generating leads of some kind, you need some kind of trickle of your own leads coming in before we cut off those other things. So start finding ways to generate leads, lean into those, get your marketing up and running, and then slowly you can start to let go of those insurance clients. You can decide not to let them all go. Maybe you pick two or three insurance, your biggest ones, the ones you either reimburse the most or the ones who are the highest percentage of what clients are using. And maybe you hold on to those and you have, you know, 50% of your clients are insurance, 50% are private pay. But having that game plan, looking ahead so that if something like this ever happens again, that we are not leaning too heavily on insurance, that we're not relying on somebody else to provide leads to our business. Because when we do that, we are putting ourselves at risk. If 100% of your leads are coming from psychology today, your business is at risk. You are not diversifying your lead sources. We want to try and get between five and 10 different lead sources. That could be through social media, that could be through referral partners, that could be through psychology today, that could be through SEO website, Google search, that could be through uh local advertising, whatever it is, we want different lead sources that we can point to and say, okay, it's they came to us through our podcast, they came to us through uh this referral partner down the road. That way, the more you have, you're not leaning on one person. If you're all your leads are coming from this marriage therapist down the street who doesn't work with individuals, and then they decide to retire and they no longer are seeing people, then all of your leads have now cut. So we want to diversify, stand on our own two feet when it comes to leads. If you're facing this crisis with the insurance plan, or if you need help coming up with a game plan for your finances, a game plan to survive this, not only survive this storm of potential drop in revenue, but also continue to grow your business. We have coaches who who are experts in that. We eat this stuff for breakfast. In our description, we always have a link to schedule a free call to get connected, see how we can help you come up with a payment plan for those who might be losing insurance, but also how can we help you make next year your most profitable year ever, despite what happens to ACA. Thanks for joining us on the Therapy Business Podcast. Be sure to subscribe, leave a review, and share it with a practice owner that you may know. If your practice needs help getting organized with your finances or just growing your practice, head to therapybusinesspod.com to learn how we can help.
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