Navigating Insurance: What You Need and What You Need to Know
Recovery treatment is expensive, and paying for it can be a major hurdle for addicts and their families. The good news is, if you or a loved one has an addiction, getting insurance to cover treatment is easier than it’s ever been. As of 2011, the American Medical Association recognizes substance addiction and alcoholism (alcohol use disorder) as diseases. As such, insurance companies have come to see substance abuse as a treatable medical condition and therefore, are more apt to cover it. After all, over time, the physical and emotional ramifications of ongoing drug and alcohol abuse are more expensive to treat than the addiction itself.
In addition, the 2008 Affordable Care Act and Mental Health Parity and Addiction Equity Act require that insurance providers that offer coverage for behavior health conditions cover substance abuse at the same level as medical care. The Affordable Care Act also prevents insurance companies from denying insurance coverage to anyone with a pre-existing condition, including substance abuse.
With that being said, insurance coverage for rehab is not a guarantee. And like any medical condition, insurance coverage relies on what a medical professional determines to be “medically necessary.” According to Healthcare.gov, medically necessary refers to “health care services or supplies needed to diagnose and treat an illness, injury, condition disease or its symptoms and that meet accepted standards of care.” For example, a bed and detox program may be considered medically necessary, but a private room may not.
When it comes to paying for rehab with insurance or facing rehab without insurance, here are some other things to consider:
Does the addict have health insurance?
If your loved one doesn’t have insurance, one option may be to apply for coverage through the Health Insurance Marketplace in order to reduce out-of-pocket costs for recovery treatment. These state government-organized insurance plans cover substance abuse treatment to varying degrees. Most include coverage for assessment, detox and partial outpatient care. The enrollment period for marketplace plans runs from November 1 to January 31 for coverage for the next year. Certain life events may also qualify you for a special enrollment period.
What does the plan cover?
A first step when it comes to navigating insurance for rehab is to call the health insurance provider. Do this before you start to shop around for a specific recovery center. Ask the insurance company if they offer coverage for addiction recovery, and if so, how to go about obtaining it. You do not want to get your addicted loved one prepared to go into recovery treatment and then find out they will have to shoulder the financial burden of rehab without insurance. When you call the insurance company, document the conversation. Write down the name of the representative you talk to and any notes about the conversation. In addition, ask the following questions:
- What criteria does your insurance company use to define medically necessary?
- What is your out-of-pocket maximum expense?
- What are the in-network and out-of-network providers, and what percentage is covered for each?
- How much are co-pays and deductibles?
- What levels of care does the insurance company cover? Does it cover assessment, detox, outpatient care, inpatient care, partial-hospitalization or hospital based care?
What do health insurance plans typically cover?
Insurance coverage for rehab varies widely, but most policies cover one or more of the following parts of the treatment process:
- Assessment: Fully covered by most insurance plans
- Detoxification: Usually covered, but rapid detox and ultra-rapid detox may not be covered
- Outpatient treatment: Usually covered
- Inpatient treatment: Most insurance plans offer partial coverage
What if the addict’s insurance plan doesn’t cover rehab?
For people who have health insurance but whose plans do not cover addiction recovery, an option may be public insurance. Some government-subsidized rehabilitation facilities accept state or federal medical insurance plans to cover part or all of the rehab cost.
What about Medicare and Medicaid coverage?
Medicare and Medicaid are government-sponsored health insurance plans. These plans cover screening for substance abuse, but they do not always cover treatment. Here’s a quick overview:
Medicare is for anyone 65 and older. It covers up to 190 days of inpatient treatment during a lifetime. There is a $1,260 deductible. Co-payments vary. Medicare covers one screening per year, counseling and therapy and one yearly “wellness” visit. For partial hospitalization, the patient pays a percentage of each service, a deductible and daily co-pays.
Medicaid is a government-sponsored plan for low-income individuals and households. The terms of Medicaid vary by state. Medicaid does cover inpatient and outpatient care in centers that accept it.
Does the addict’s employer offer assistance for rehab?
Some employers offer drug rehab insurance, and some even cover the entire cost. This is usually only in cases of severe addiction, however. Other employers offer to provide continuous pay while the worker is gone or half payment in place of sick days while the employee undergoes drug or alcohol rehabilitation. Keep in mind that in order to obtain this kind of coverage, the addict will have to disclose the addiction to his or her employer.
Is a group insurance plan an option?
Some group insurance plans offer provisions for rehab. The Mental Health Parity and Addiction Equity Act of 2008 “requires group health plans and health insurance issuers to ensure that financial requirements (such as co-pays, deductibles) and treatment limitations (such as visit limits) applicable to mental health or substance use disorder (MH/SUD) benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits.” The law extends treatment coverage to employees in group plans that contain terms for psychological health benefits. The funds usually cover detox, outpatient services, residential hospitalization and long-term inpatient treatment.
If your loved one doesn’t have health insurance and would rather not sign up for a health marketplace or other type of plan, there are other options. These include recovery centers that offer payment plans, bank loans, credit cards, and home equity lines of credit.