Insurance Coverage For Addiction Treatment

As of 2017, there were 19.7 million American adults with substance use disorder.2 Heroin-related overdoses have more than tripled across the US between the years 2002 and 2013, and those numbers continue to rise.1 For people seeking financial help for addiction treatment, it’s often difficult to determine whether and how much their health insurance coverage for addiction treatment will pay within their plan.

Who Suffers From Substance Use Disorder?

Although not everyone with a substance use disorder seeks treatment or receives a medical diagnosis, there are reliable estimates as to how many adults, aged 12 and up, have had to deal with an addiction to drugs or alcohol.

Of the 19.7 million people with a substance use disorder in 2017: 3

  • 14.5 Million of them were addicted to alcohol 73% 73%
  • 7.5 Million used illegal drugs 38% 38%
  • 4.1 Million used marijuana 20% 20%
  • 1.7 Million were addicted to prescription pain medications 8% 8%
  • 2 Million used cocaine and methamphetamine 10% 10%
  • 0.7 Million were using heroin 3% 3%
  • 0.6 Million people misused prescription stimulants 3% 3%
  • 14.8% were 18-25 years old 14.8% 14.8%
  • 7.2% were 12 years old and up 7.2% 7.2%

Within this group of 19.7 million Americans coping with addiction: 4

  • More than 13.5 million people with substance use disorder in 2017 were over the age of 26, while 5.1 million were just 18 to 25 years old.

Insurance Coverage and Addiction Treatment

Thanks to the Mental Health Parity and Addiction Equity Act of 2008, most commercial health insurance companies will treat and cover substance use disorder the same as they would any type of disease.5 Prior to this federal law, people seeking treatment for substance use disorder often received only limited coverage that came under mental and behavioral health treatment auspices.

Today, addiction treatment is diagnosis as a disease, with the insured receiving medical benefits on a par with other health-related diagnoses. It’s still important, however, to be sure any health insurance policy you have lists substance use disorder as a covered diagnosis.

Paying For Rehab Treatment

There are various ways to pay for addiction treatment. One avenue to covering the costs of rehab treatment, including medications, is through your private health insurance policy. Most insurance plans cover, if not all, then a part of your treatment plan in rehab. There are some policies that cover your entire addiction and recovery treatment.

If you are covered under the Affordable Health Care Act (ACA, and also called Obamacare), you don’t need to worry about a substance use disorder being listed as a pre-existing condition. Even if you are currently dealing with drug or alcohol addiction, you are still entitled to the important health benefits covered by the ACA.

How to Get Health Insurance

One of the most traditional ways to obtain health insurance is through your employer. Most policies require that you pay a monthly premium and adhere to a yearly deductible and co-pays with each health-related visit. The employer, however, pays the bulk of the cost of their employees’ insurance in most cases.

You can also purchase health insurance through the ACA if your employer doesn’t offer coverage. If you’ve lost a position and are uninsured, you may be able to purchase COBRA insurance for up to 18 months to continue receiving the benefits that came with your job. Other Americans may use their Medicare or other state-funded coverage to help offset the costs of addiction treatment.

Some employees may fear the stigma of making a claim for financial help with addiction coverage. They may also believe they will lose their job because of their substance use disorder status.

It’s important to know your rights if you or a loved one needs to access your employer-based health insurance for addiction treatment. The Americans with Disabilities Act (ADA) protects people suffering from substance use disorders so they cannot be discriminated against.

You cannot lose your job because you seek addiction treatment and enter a rehab program. This is true, even if your recovery causes you to miss work for a state or local government position or within a private company that employees more than 15 people.

The Family and Medical Leave Act (FMLA) also protects from discrimination due to a need for addiction treatment. Under this law, a person can receive 12 weeks of medical leave every year, and that includes addiction disorders. You would have to be a full-time employee. This type of leave usually means you will not continue to receive a paycheck during your absence, but your job will be there for you upon your return. Applying for disability benefits while you are getting help for addiction is a long and complicated process, but it may be worth a try.

Your employer must keep your substance use disorder information confidential, just as any other medical issue would be considered personal, confidential information.

Addiction Treatment Options

Just as everyone has different needs and require varying levels of care while undergoing rehab for addiction, there are various types of treatment options.

Intensive Outpatient Program (IOP):

This specialized addiction treatment program provides an increased level of structure and personal care than a standard outpatient program. This type of program is geared towards those who have a chemical dependency but there is not usually a detoxification program attached. If needed, a person may partake in detox before entering an IOP. Clients participating in an IOP may spend up to 30 hours per week in treatment. After the daily session is completed, clients can return to their homes and daily lives, with some able to still perform at work if the hours permit.

During this highly structured treatment program, there are classes, various types of therapy sessions and workshops. The services provided during treatment may consist of the following:

  • Group and individual therapy sessions
  • Behavioral therapy sessions
  • Individual case management
  • Mental and physical health treatment
  • Life skills training
  • Alcohol and drug use monitoring
  • Support groups
  • Crisis management access on a 24-hour basis

Participants are usually encouraged to partake in a 12-step program in addition to the IOP. IOP treatment can last roughly 90 days in total.

Residential Treatment Program:

Also known as inpatient rehab, a residential treatment program involves living on-site during treatment within a facility. Some of the most important aspects of residential treatment are the absence of counterproductive outside influences and a restructuring of a resident’s daily life.

Inpatient rehab usually begins with detox treatment to rid the body of drugs and/or alcohol. Following detox, clients remain living in a facility in order to take part in therapeutic programs that will include medical support, structure, nutritional education, gaining a sense of community and learning to establish healthy boundaries using important tools.

During residential detox treatment, clients will go through drug or alcohol withdrawal, often with medications to help ease symptoms.

Residential treatment program stays can take anywhere from 30-90 days, depending upon the severity of the addiction and a resident’s needs.

Types of Health Insurance Plans

Health insurance can feel like a maze of options from which you have to choose, especially if your employer offers a variety of plans. The different types of health insurance plans can include the following options:

  • HMO (Health Maintenance Organization)
  • PPO (Preferred Provider Organization)
  • POS (Point of Service Plan)
  • HDHP (High Deductible Health Plan)

Other types of plans are also available, but these are the most common ones that you’ll find, either from your employer’s insurer or the government marketplace for ACA.

Within each plan, there may also be a level of benefits offered, such as bronze, silver, gold or platinum. The higher the metal (platinum), the more coverage you’ll generally obtain, but these will cost more in premiums and perhaps deductibles.

Sample Levels of Benefits

A platinum plan may cover 90% of your medical costs, with you paying just 10% out of pocket (OOP).

Gold plans cover about 80%, with 20% OOP.

Silver covers an average of 70% of costs, with 30% OOP.

There are also catastrophic policies that pay out after you’ve paid a very high OOP deductible.

Insurance Coverage or Private Pay?

When it comes to paying for rehab treatment, some people must choose between paying privately for residential or outpatient care or going through their health insurance provider.

Most insurance policies do cover addiction treatment to a certain degree. For example, many plans will cover an initial assessment for substance use disorder, certain types of detoxification and outpatient treatment. Some also partially cover residential treatment, which is typically more expensive than IOP.

It’s best to contact your health plan’s representative to discuss coverage in more detail. The same is true if you are covered under Medicare, Medicaid, or under a state government marketplace plan.

Medicare: If covered by Medicare, meaning you are at least 65 years old or have a severe disability, your coverage for rehab treatment usually entails:

  • Up to 190 days of inpatient care during your lifetime (not per year). There is also about a $1200 deductible and various co-payments involved.
  • For outpatient treatment, Medicare covers counseling and therapy sessions, a yearly assessment, medication management a yearly checkup for wellness, with a 20% co-pay overall.
  • For those needing partial hospitalization or IOP, Medicare requires that you pay a percentage of the cost for each service in addition to daily co-payments and a deductible.

Medicaid: For those who are covered under their state’s Medicaid plan, screening for substance abuse is covered. Treatment, however, is not always included. It depends upon the state in which you live. Also, if the facility chosen accepts Medicaid, both inpatient and outpatient care may be covered.

Affordable Care Act (Obamacare):The state government insurance plans participating in the ACA cover addiction treatment to a certain degree, again, depending upon the state. Usually assessment, detox and a certain amount of outpatient care are included.

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Other ways to pay for treatment include: 

  1. Asking if a facility uses a sliding scale method of payment. This is a structure that facilitates payment according to what is reasonably affordable on an individual basis.
  2. There are financing options in order to privately pay for rehab. The use of credit cards, health savings accounts, personal loans, home equity loans and other loan companies can be tapped to pay for this very important treatment for addiction.
  3. Some rehab centers offer scholarships depending upon your situation. Call the facilities you are considering and ask.
  4. The Substance Abuse and Mental Health Services Administration (SAMHSA) has grant monies available to those applicants who qualify.7

Insurance Provider Coverage

Each commercial insurance company plan differs according to the policy type and benefit levels. Here are some insurance companies and their typical coverage information for addiction treatment.

Aetna:

Aetna offers open-access, co-pay only, HMO, Preferred Provider (PPO), Point of Service (POS), Exclusive Provider Organization and high-deductible plans. They also offer Medicare Advantage plans with benefits that aren’t covered by Original Medicare.

Most of the Aetna policies cover inpatient treatment for addiction, with different programs offering their own rules for coverage. Aetna’s HMO plans differ by state, city, deductible, percentage and co-payment. Some common Aetna HMO plans will cover addiction treatment in one or more of these ways:

  • A $250 daily co-pay for days 1-5
  • 20% or 30% coinsurance
  • $1,000 co-pay for inpatient admission
  • 20% coinsurance after a $250 co-pay admission
  • $500 co-pay/admission

The provider facility must usually be in-network. No preauthorization or referrals are needed.

Aetna’s PPO plans also vary from state to state, with the main difference being coverage for out-of-network providers, with 100% in-network coverage less the co-pay and 50% coverage for out-of-network.

With an Aetna PPO, inpatient rehab treatment may include:

  • $500 co-pay for admission with 50% co-insurance; out-of-network precertification is needed
  • 20% co-insurance or 50% co-insurance plus precertification for out-of-network care, otherwise you may incur a $400 penalty. In an emergency situation, precertification is not necessary.

For outpatient addiction treatment, Aetna charges a co-pay per visit (anywhere between $20-$110).

Anthem:

Anthem is an independent licensee of Blue Cross and Blue Shield. Therefore, their plans are structured in the same way as the larger insurance company, with similar plan levels.

Co-pays, coinsurance and deductible amounts must be paid in order to receive covered services. Anthem has dedicated Behavioral Health Care Managers available to help clients connect with an addiction treatment facility.

Blue Cross Blue Shield:

This insurance giant’s most common plans include bronze, silver, gold and platinum levels of care, with bronze having the lowest monthly premiums but highest deductibles to be met.

For inpatient addiction treatment, Blue Cross Blue Shield coverage varies between states, as most insurance companies will do, depending upon laws and regulations. Common costs for inpatient rehab dependent upon the plan:

Bronze: The minimum deductible must be met for in-network providers. Out-of-network providers are usually not covered.

Silver: You’ll pay a coinsurance percentage plus the deductible for in-network coverage. Out-of-network is not covered.

Gold: This also requires a coinsurance percentage, though smaller than the silver plans, plus the deductible. Out-of-network providers are not covered in general.

Platinum: A daily co-pay for in-network services (with a maximum amount to be met) or a coinsurance percentage to be paid. Some out-of-network providers may be covered, though it will cost more in coinsurance and deductibles.

Precertification is often necessary with Blue Cross Blue Shield plans for inpatient addiction treatment. Benefits have a standard option that begins at $35 per day for admission for an unlimited number of day or a basic option of about $175 per day and up to $875 per admission for unlimited number of days.

Blue Cross Blue Shield’s coverage for outpatient rehab treatment is much the same as the above. There may be differences depending upon whether your treatment takes place at a doctor’s office, a hospital or in a facility.

Cigna:

Cigna’s Behavioral Health division handles support for clients seeking help with a substance abuse disorder. For inpatient addiction treatment, Cigna may cover:

  • Detoxification treatment
  • Inpatient treatment
  • Partial hospitalization

Out-of-pocket costs will vary according to your plan. For some estimates:

Bronze: Usually there is no coinsurance percentage for in-network providers, though a deductible must be met. Out-of-network providers will sometimes be covered for some costs, but others will not.

Silver: Coinsurance for in-network care will be between 30-50% after the deductible is paid. Out-of-network services may or may not be covered, depending upon where you live.

Gold: In-network services charge 20-50% for coinsurance after deductible. Out-of-network coverage varies.

Platinum: After meeting the deductible, these plans charge 10-30% coinsurance. Some cover out-of-network providers at a higher percentage rate.

Humana

The behavioral health subsidiary of Humana covers addiction services for policy holders. They provide, depending upon which state you live in, the following:

  • Inpatient and outpatient detox
  • Inpatient and outpatient rehab
  • Prescription medications
  • Coverage only at in-network facilities

 

Humana’s coverage for addiction treatment will not pay for:

  • New Age therapies
  • Private luxury facilities
  • Executive treatment

Also, a referral is needed from a physician. Co-pays are required for most services and a yearly deductible met.

Magellan Health:

This managed health care company provides coverage specifically for behavioral healthcare, including a focus on substance use disorders.

There are a variety of plans, with co-pays and fees for service in place before the insurer will pay, including deductibles that must be met. Overall, Magellan does provide more extensive coverage for substance abuse treatment than many other insurers. The plans and requirements vary, with some requiring the use of only in-network providers and others allowing visits to out-of-network services at a greater cost.

Magellan covers inpatient addiction treatment services, often including:

  • Medically supervised detox
  • Medications
  • Treatment center stays
  • Dual-diagnosis treatment
  • Therapeutic counseling
  • Transitional care

Molina Healthcare:

Headquartered in Long Beach, California, Molina Healthcare provides coverage for over 4 million people through government-based insurance programs, such as the ACA, Medicare and Medicaid.

Molina participates in Medicaid plans in at least 11 US states. The company also covers costs within Medicare Parts A, B, C and D. Services under Molina must be deemed as medically necessary, with a specific treatment plan in place.

Rehab services must be in-network. Outpatient treatment, detox, psychiatric services and day treatment programs are covered in most cases.

United Healthcare:

Most United Healthcare insurance policies cover drug and alcohol substance use disorder treatment under a PPO plan. Inpatient and outpatient detoxification, inpatient rehab and outpatient treatment for alcohol and drug abuse are typically covered to some extent.

Treatment facilities do not always need to in-network providers, though going out of network will likely cost more.

United Healthcare’s Short Term Medical Value plan is their lowest premium coverage plan, but it doesn’t cover addiction treatment. Other short-term plans, however, provide some coverage for this type of treatment. They typically cover 20-30% of coinsurance after the deductible is met. Co-pays are limited to $50 for each visit.

UPMC:

The UPMC Health Plan is a large insurer located in western Pennsylvania. They partner with several other companies to provide a range of health insurance coverage, including behavioral health.

In-network providers and physicians are encouraged for addiction treatment services. UPMC offers HMO, PPO and EPO plans. An EPO is a combination of HMO and PPO, without the need for a primary care provider or referral, but with a participating network of providers that must be used.

Talking With Your Insurance Provider

Before deciding upon which facility to utilize for your substance use disorder, whether it’s inpatient or outpatient treatment, call your insurance provider to discuss your options. You can also often speak with a particular treatment facility that you would like to use. Counselors there will be happy to speak with your insurance company and figure out what is and isn’t covered under your plan.

Keep in mind that most treatment centers do accept insurance, whether it’s a private insurance company, a government sanctioned plan, Medicare or Medicaid. Of course, if you need to pay for your services out of pocket, perhaps a payment plan or other options can be worked out so you can receive the treatment you need to live a full, happy life once again.


Resources:

  1. https://www.npr.org/sections/health-shots/2015/08/16/430437514/when-rehab-might-help-an-addict-but-insurance-wont-cover-it
  2. https://www.samhsa.gov/data/report/2017-nsduh-annual-national-report
  3. https://www.samhsa.gov/data/report/2017-nsduh-annual-national-report
  4. https://www.samhsa.gov/data/report/2017-nsduh-annual-national-report
  5. https://www.cms.gov/cciio/programs-and-initiatives/other-insurance-protections/mhpaea_factsheet.html
  6. https://www.webmd.com/health-insurance/types-of-health-insurance-plans#1
  7. https://www.samhsa.gov/grants