The American Medical Association now recognizes alcoholism (alcohol use disorder) and substance addiction (substance use disorder) as “diseases,” which forces health insurance companies to acknowledge the need to cover treatment for these conditions. Drug and alcohol treatment can be expensive, but it doesn’t have to be out of reach. Many people question how to afford addiction treatment, even with health insurance.
Most people pay for treatment in one of three ways:
- Private insurance
- Government funds
How the 2008 Parity Act Can Help
By now, you may have heard that there have been substantial changes in the way insurance covers individuals. The Mental Health Parity and Addiction Equity Act is one piece of legislation that may help you or a loved one enter treatment.As part of the Emergency Economic Stabilization Act of 2008, the federal parity act legislation was designed to help remove barriers that keep patients from receiving treatment.
This act was designed to help ease financial burdens on patients and reduce the stigma surrounding addiction and mental disorders. It does this by requiring group health plans to offer mental health/addiction services coverage to cover rehab treatment in a comparable manner to medical/surgical services.The new law applies to all health plans, including self-insured and Medicaid managed-care plans. Therefore, if you have health insurance today, there is a high chance that your addiction treatment will be covered for you if you need it.
The Impact of Health Reform in 2010
Signed into law in 2010, the ACA requires all Americans to have health insurance. Access to insurance was increased by the expansion of Medicaid eligibility and mandated individual insurance coverage. This eligibility expansion resulted in increased access to substance use disorder and mental health condition treatment coverage through Medicaid. The individual insurance expansion also may result in improved access for those with private insurance if such plans cover AOD treatment services at all.1
What Does Health Insurance Typically Cover?
Insurance policies vary in the amount of treatment services they cover. Most policies will cover one or more of the following:
- Assessment – with most health insurance policies, these expenses are fully covered.
- Detoxification – typically, insurance covers most of these expenses; however, rapid detox and ultra-rapid detox are generally not covered.
- Outpatient treatment – generally, these expenses are mostly covered.
- Inpatient (residential) treatment – in most cases, these expenses are partially covered.
While insurance policies must now cover treatment for substance use disorders and mental health conditions to the same extent that they cover other medical conditions, technically, policies will only cover what an authorized supervising professional determines to be “medically necessary.”
While this may sound daunting, it is important to know that most reputable rehab programs will offer a comprehensive assessment before treatment to determine if treatment is medically necessary. At Skywood, for instance, we often advocate for our patients and work directly with the patients’ insurance companies (with patient permission) to help assess and determine the right amount of care possible.
Next Steps in Determining Coverage
- You may choose to work with your insurance company yourself. You may call the member services department at your insurance company – have your membership identification number ready.
- Write down the name of the representative(s) you speak with, as well as any notes about the conversation.
- Ask what “levels of care” are covered for addiction treatment (assessment, detox, inpatient, outpatient, residential, hospital-based, partial hospitalization, etc.).
- Ask about in-network and out-of-network providers and the percentage covered by insurance for each.
- Ask about co-pays and deductibles.
- Ask what your out-of-pocket maximum expense is.
- Ask what criteria your insurance company uses to determine medical necessity.
Another option is to reach out to the admissions department of the treatment program you’re considering, like the one here at Skywood. Treatment providers have many ways of advocating for patients to make insurance policies cover expenses with as little stress as possible.
How Are Substance Use and Mental Condition Claims Filed?
Claims for substance use disorders and mental health care are subject to the same co-payments, deductibles, co-insurance and insurance maximums as medical claims. There may be no limit on the number of provider visits allowed, as long as the care is medically necessary under the terms of the plan.
There is not a separate annual and lifetime maximum for mental health and substance abuse benefits. If you use an in-network provider, the provider is responsible for submitting claims for services.
Your mental health and substance abuse provider will be required to conduct periodic medical necessity reviews.2,3
So, in short, your treatment programmay be able to work with your insurance company on your behalf, saving you stress and the risk of making errors.
Pre-existing Mental and Behavioral Health Conditions Covered… with No Spending Limits
- Health insurance marketplace plans can’t deny you coverage or charge you more just because you have a pre-existing condition – that includes any mental health or substance use disorder conditions.
- Coverage for treatment of all pre-existing conditions begins the day your coverage starts.
- Marketplace plans can’t put yearly or lifetime dollar limits on coverage of any essential health benefit – that includes any mental health and substance use disorder services.5
HSAs: A Great Way to Build Up Health Dollars for Treatment
In 2003, Congress introduced a new opportunity for individuals to help prepare themselves for any big health expenses down the road. That opportunity is called a Health Savings Account (HSA). If you choose to pay for treatment out-of-pocket, or need a little assistance to pay for your deductible, a health savings account may help you receive rehab care without paying taxes on treatment.
HSAs are tax-free savings accounts aimed at building up coverage for future medical expenses. People can enter an HSA plan through their employer if such a plan is available through the company, or individually (in some states). The money in your HSA plan can be used at any time for approved medical expenses.6
Stellar Treatment Programs Show a Big Return on Investment
There are government funded treatment programs as well. While these programs are life-saving for those who need them, they are often “bare bones” rehab programs that are designed to save as much government money as possible. If you are fortunate enough to be able to explore treatment in a private facility, you may be able to benefit from more comprehensive care.
Research from this independent program indicates that this is possible because patients who succeed n treatment have much faster improvements in health and behavior than those who do not seek treatment. The National Center on Addiction and Substance Abuse has been calling for legislation to require broader coverage of substance abuse treatment by health insurers. To rein in spiraling health costs, the center believes that deepening such coverage is vital.7
Speaking of stellar drug treatment programs, Skywood – Foundations Recovery Network’s newest, state-of-the-art treatment facility – builds on our organization’s well-documented reputation for excellence. Find out for yourself why more than ten federally funded studies point to us as a shining star in our field.
1 Stewart, Maureen T., Ph.D., et. al., Health Services and Financing of Treatment. Alcohol Research and Health, Volume 33, Number 4, National Institute on Alcohol Abuse and Alcoholism. Web. 09 June 2017.
2 Health Insurance, S. C. Public Employee Benefit Authority. Web. 09 June 2017.
3 Essential Health Benefits. HealthCare.gov. Web. 09 June 2017.
4 Chollet, Deborah, et. al., How Will the ACA Affect Community Rehabilitation Programs? Mathematica Policy Research, Institute for Economic Empowerment. April 2012. Web. 09 June 2017.
5.Mental Health and Substance Abuse Coverage. HealthCare.gov. n.d. Web. 09 June 2017.
6.What Is Health Insurance? Medical News Today, MediLexicon International LTD. n.d. Web. 09 June 2017.
7. Eckholm, Erik, “Government’s Drug-Abuse Costs Hit $468 Billion, Study Says. The New York Times, 28 May 2009. Web. 09 June 2017.