Does Insurance Cover Rehab?
Once you’ve made the challenging decision to face your addiction, you will need to enter a rehabilitation program. But, naturally, the next question is how much will that cost? Well, the good news is that most insurance plans cover rehab, as the American Medical Association classifies substance abuse and alcoholism as a medical disease — Substance use disorder, and alcohol use disorder, respectively.
In 2008 the Affordable Care Act and Mental Health Parity and Addiction Equity Act made it mandatory for insurance companies to provide drug abuse treatment at the same level that they provide benefits for other medical conditions. In addition, the Affordable Care Act protects insurance holders from being denied coverage due to a pre-existing condition. Therefore, if alcoholism runs in the family you will not be denied coverage.
The inherent nature of drug abuse involves a struggle with finances. Every case is different, but often times using can lead people to drain their bank accounts, borrow money and steal if it means being able to get a quick fix. This can make entering a treatment program seem unrealistic. But for those fortunate enough to have insurance coverage, help is within reach. It also helps relieve the burden placed upon loved ones to offer their finances and resources to provide help.
According to Substance Abuse and Mental Health Services Administration, just under 23 million people per year need substance abuse treatment, and roughly 90% of them won’t receive it. Having insurance is a huge asset in the fight against drug and alcohol abuse.
In this article, we’ll help you understand how much rehab costs with and without insurance, types of rehab centers, payment options, everything that is included with rehab, and more.
Types of Rehab Centers
Inpatient Treatment – The main feature of inpatient treatment centers is that patients are required to stay at a clinic or medical facility for the duration of their treatment plan. The strongest benefit of staying at a treatment center is that patients are able to isolate themselves and avoid triggers which lead to drug use. These facilities are specifically designed to put patients in a comfortable and anxiety-free environment. There is no shortage of support either, because not only are patients surrounded by trained rehab professionals, therapists and staff, but the other patients are all individuals going through the same problems they are — nobody is in this battle alone. Here are some additional features of inpatient treatment facilities:
- A safe recovery environment
- Support of others in the exact same situation
- 24/7 medical supervision
- Therapeutic and spiritual activities such as yoga, meditation, art classes and other forms of exercise.
- Field trips
- Family therapy
- Family visits on weekends
Outpatient Treatment – This form of treatment is relatively similar in that it’s conducted at a clinic or medical facility, and in terms of battling the actual addiction the programs are alike. However, the main difference is that you don’t stay overnight. Once you’ve completed your treatment for the day you can head home. This way, people who have responsibilities that don’t allow them to enter a 24/7 program have the option to schedule treatment around their careers and/or families. While each program varies in intensity, it’s typically considered a great option for people whose drug abuse problems are mild to moderate, however, it works great at any stage of severity.
Luxury Centers – These centers have been made famous by celebrities because they offer a resort style experience. They will typically be located in a destination with nice weather and the amenities will be extensive. And naturally, they have a top of the line healthcare staff as well.
How Much Do Rehab Centers Cost?
Like any other medical procedure or treatment, even with insurance, there are still some costs involved. Rehab is no different, but with so many different calibers of treatment centers, the costs can vary. On average, treatment usually lands within $20,000-$30,000 per month. For Luxury centers, the costs can be as high as $80,000 per month.
What does insurance cover?
Everyone has a different health care plan, so it’s hard to say exactly what your individual provider will cover. Also, chances are your policy will not cover everything, and there will be some out-of-pocket costs. Insurance companies use the initial assessment by a physician to determine how severe your condition is and to what extent treatment is a “medical necessity”.
In general, your plan should cover all or at least some of these stages of treatment:
Assessment – Initial assessment of the addiction is usually covered.
Detoxification – This is often covered but it can be tough because insurance companies consider this stage to be the most challenging and therefore it incurs the most costs.
Inpatient or residential treatment – Usually only a percentage is covered due to high, ongoing costs.
Outpatient treatment – This is the treatment option most favored by insurance companies and you’ll find that it’s mostly covered.
Types of Insurance Plans and What They Cover
Understanding the different types of insurance plans can help you anticipate how insurance affects the cost of treatment.
HMO Health Insurance
HMO plans provide insurance coverage under a specific network of approved facilities and centers. The healthcare providers have to agree to lower their rates for insurance holders. However, there is no lack of quality, as they all have to meet specific standards. The downside is that patients are typically not allowed to visit facilities outside of the approved network, otherwise they will end up paying the full cost.
However, premiums are low and members will usually not have to pay a deductible. Some plans also require you to visit a primary physician who ultimately decides the “medical necessity” of whether or not you need treatment.
Conclusion for Rehab: If your addiction requires custom treatment or specialized services, HMO plans can be limiting. However, the cost of rehab will be much lower as insurance will cover most of it.
Preferred Provider Organization Health Insurance
PPO plans offer more flexibility when it comes to choosing a rehab facility. Similar to HMO’s they have a network of doctors, however, the major benefit is that they do not have as many restrictions on seeing out-of-network doctors. This type of flexibility is beneficial for patients seeking drug rehab treatment because of the urgency involved. PPO’s are excellent plans for addicts who need specialized treatment services, that in-network facility do not offer.
It should be noted that often times PPO plans do not cover detox because it can be a very expensive part of treatment, especially at high caliber facilities. The biggest downside of PPO’s is that out-of-network facilities don’t follow a unified cost structure, so your insurance provider has more freedom to reduce your coverage. Additionally, premiums are higher and there is a good chance you’ll face a deductible.
Conclusion for Rehab: The premiums and deductibles are higher, but you will have access to more flexible and specialized services.
Medicare & Medicaid
These are both federal and state funded insurance programs that provide zero to low-cost insurance plans based on specific eligibility requirements. Eligibility varies from state to state and they change every year, so if you think this may be right for you, look up the most current requirements.
Medicaid – Designed for low-income families. As per the 2010 Affordable Care Act Medicaid is required to cover the basics of rehab for substance abuse. Requirements include being: Over 65, under 19, pregnant, a parent, or falling within a specific income bracket. Again, this varies from state-to-state.
Medicaid will usually cover:
- Inpatient care
- Residential treatment
- Outpatient care
- Mental health care
- Family therapy
Medicare – Is offered to individuals over the age of 65 years old, or to people with disabilities. Members pay a monthly premium fee based on their income bracket.
Medicare covers most types of treatment, however, there are some limitations and additional costs:
- Only covers 190 days of inpatient care in an individual’s lifetime
- Covers 80% of outpatient care
- You can opt for more benefits or coverage for specialized medications by paying a higher premium.
Exchange Healthcare Plans
Exchange plans are also known as Marketplace plans. Under parity laws, Marketplace plans are required to cover substance abuse programs. The benefit of the marketplace is that you can choose a plan based on exactly what degree of coverage you would like (90%, 80%, 70%, etc.) Naturally, you will pay more as the coverage increases. The number one caveat is that these plans are only offered to people under 30.
These plans are designed to provide an organized and systematic form of health care based on specialized needs. For instance, many substances abusers suffer from co-occurring conditions, and may need to be treated concurrently. Integrated care eliminates the pitfalls of “one stop shop” treatment, by offering coordinated approach — multiple specialized providers serving the needs of one individual. The costs can be on the higher side, but plans include high-quality treatment with higher success rates.
How to Inquire About Coverage
To maximize the amount you save and to get the most of your insurance policy, it’s recommended you ask your insurance provider specific questions. For instance, if you are required a co-pay, deductible or coinsurance. The co-pay for rehab is usually a set amount. A deductible will require you to pay up to a certain amount until insurance kicks in. Coinsurance will require you to pay a specific percentage of the treatment costs. Here are the best questions to ask your insurance agency to make sure you get the most accurate and comprehensive information:
- What is my out-of-pocket maximum expense?
- What criteria does your company use to approve or deny treatment? (Usually “medical necessity” is their benchmark for approval, so understanding how your addiction is medically damaging is important)
- What stages of care do you cover for addiction treatment? (Be specific. i.e., Detoxification, initial assessment, inpatient, outpatient, residential, hospitalization, etc.)
- What percentage do you cover for out-of-network providers versus in-network providers?
- What type of plan do I have? (Preferred provider organizations, managed care plan, consumer-driven health plan, etc.)
Common Holes in Treatment Coverage
Insurance providers can be difficult to work with, because at the end of the day, they’re trying to maximize their own profits, and the urgency of your medical condition isn’t their top priority. These are some common caveats which you may find in the fine print of your insurance policy when it comes to addiction treatment:
- You may be denied coverage if you’ve been to rehab before.
- They may have holes in coverage for specific types of addiction.
- They may have holes in coverage if the length of your particular treatment is deemed too long.
- Certain types of treatment, most likely residential or inpatient, may not be well covered.
- Arguably the most important phase of treatment, detoxification, may not be part of the coverage.
- They may require you to use their specific network of doctors and care facilities.
“Non-quantitative” Treatment Limitations
NQTL’s are a policy’s way of limiting your treatment coverage. As discussed earlier, substance abuse treatment coverage is supposed to match standard health care coverage. In some cases, your coverage can be exempt from parity laws in the fine print, meaning insurance companies can avoid covering parts of your treatment. Non-quantitative refers to the fact that these stipulations are not expressed numerically on your plan:
- Denying coverage for high-cost therapies, unless it is proven that a lower-cost therapy is not as effective.
- Changing coverage based on whether treatment is experimental or investigative.
- Only certain illicit drugs are listed for coverage.
- They may use their own criteria to determine what is a “reasonable” or “standard” rate for each individual form of treatment. For example, they may argue that the average individual therapy session costs $120 so anything higher than that is not eligible for coverage.
- If a treatment course is not completed or is failed, they may claim that your coverage is void.
It’s important to be aware of these limitations because many patients’ coverage have been unfairly adjudicated by using these tools. Being aware of how your health plan handles NQTL’s will also help you if you need to file an appeal in the event that your health care provider unfairly denies your coverage for substance abuse treatment.
What To Do If Your Claim Is Denied
Although recent acts have advocated on the side of those suffering from addiction rather than in favor of insurance companies, the system isn’t perfect. In some cases, it can be a struggle to get your insurance company to cover alcohol or substance abuse programs. In the event that your claim is denied, you can file an appeal against their decision by following the steps of appeal.
Typically an appeal will ask you to provide medical evidence that your addiction is a real and debilitating disease. Identifying the aspects of your life which have deteriorated due to drug abuse is not only important for this purpose, but it will help you better understand why it’s so integral that you get professional help.
If You Don’t Have Insurance
If your insurance refuses to cover rehab or you don’t have access to insurance there are options that don’t involve completely draining your bank account or borrowing money.
Government Assistance Programs
Low-income households and individuals may qualify for financial assistance such as Medicaid, from the government. In some cases they can cover the cost of rehab. However, it varies from state-to-state on what they’re willing to cover. For more information on these federally funded drug abuse programs, contact your state’s Department of Health and Human Services.
Alcohol Rehab Financing
In the case of alcohol abuse, some facilities offer financing as a payment option, pending a credit check.
Sliding Scale Fee Treatment Centers
Another payment option at some facilities is sliding scale fees, which means that the fee structure directly reflects a reasonable amount based on your income.
There are some non-profits who work with individuals suffering from substance addiction by offering free or discounted abuse treatment. The most popular organization which exists virtually everywhere in the US is Alcoholics Anonymous, which accepts more than just alcoholics. The Salvation Army and United Way also offer similar reduced-cost programs.
You can use the free facility locator on The Substance Abuse and Mental Health Services Administration (SAMHSA) to locate facilities that offer assisted payment options.
Additional Financing Options
If none of the previously mentioned options work for you there are some other methods to research:
- Healthcare lines of credit or credit cards
- Credit cards
- Home equity loans
- SAMHSA grants
- Specialty loan companies
- Personal loans
Weighing Your Options
Going through the avenues of the insurance process might seem daunting to you, or maybe you’re not covered by insurance and the high costs of treatment feels like a mountain you’ll never be able to climb — chances are the whole thing might make you feel like using again. That’s a dangerous place to be, don’t let finances get in the way of seeking professional help. The benefits of fighting to get treatment, drastically outweigh a life of continued substance abuse. Besides, if you add it all up, drug use ends up being the most expensive option.
It’s a good idea to sit down and calculate how much you spend on the abused substance. If you crunch the numbers, an alcoholic can easily spend over $5000 a year on drinking. Additionally, if hard drugs are the source of abuse, costs can climb even higher. Couple that with the damage to relationships and your career the costs of using add up way higher than taking a financial hit for treatment.
Furthermore, long-term substance abuse almost always leads to legal problems, whether it’s possession charges, DUI’s, or other criminally related activity. And legal fees can ravage your bank account in instant.
Think about the long-term medical effects of using. Alcohol for instance, damages the liver; if your liver fails the medical bills are going to pile up very quickly. The same goes for hard drugs. The money you spend just to stay healthy will far outweigh the cost of seeking substance abuse treatment now.
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