One of the most complicated parts of the treatment and healthcare process in the US is dealing with insurance. Verifying insurance benefits and communicating with providers can be time-consuming, energy draining, and a pain, especially when you are trying to focus on recovery from substance abuse.
However, they play an essential role in helping those with addiction access rehab treatment, as the average cost for a typical monthly stay in rehab can range from $6,000 (cheapest inpatient programs) up to $45,000 per month (luxury treatment centers) [1]. A price tag that the average American simply can’t afford.
Read on to understand how insurance for rehab works, what coverage looks like based on your level of care, and a step-by-step guide to the insurance verification process.
What Types of Rehabs Are Covered by Insurance?
Rehabs that treat alcohol, drugs, and co-occurring disorders are often covered by most major health insurance plans as long as the rehab is in-network and your individual policy covers the necessary services. The level of care (detox, inpatient, or outpatient) also plays a significant factor in whether your insurance covers costs.
Health insurance benefits typically cover similar types of treatment for drug and alcohol use, as they both fall under substance use disorder services under the Affordable Care Act (ACA) and the Mental Health Parity and Addiction Equity Act (MHPAEA) [2].
Inpatient vs Outpatient Insurance Coverage
Insurance policies typically provide more comprehensive coverage for inpatient care, including detox and residential treatment. This is because they tend to be much more expensive than outpatient treatment, and most Americans cannot afford this out of pocket without support from insurance.
Detox programs are typically the most expensive level of care as they require medical stabilization and are usually covered by insurance for 7 days (average course of most detox programs). Residential programs are typically covered for 30, 60, or 90 days and encompass a range of treatment services provided within the facility.
Policies may have more specific limits for outpatient care, such as the type of therapy covered, the duration of treatment, or the number of sessions covered, as well as whether psychiatric services or mental health medications are covered.
How to Verify Insurance for Addiction Treatment
Verifying insurance is an essential first step when seeking treatment for substance abuse and mental health problems. It helps you understand what services are covered by your insurance provider, what costs you may be responsible for, and can guide the overall course and duration of treatment.
Step-By-Step Guide to Insurance Verification
To make this process easier and ensure a smooth admission, we have broken down the insurance verification process into some key steps to help you gather information, confirm your benefits, and understand your financial responsibilities before beginning treatment.
- Gather Insurance Information
Collect the key details from your insurance card, including your provider name, policy number, group number, and insurance company contact information. Having accurate information readily available for the admissions specialist can help make the verification process smoother and quicker.
- Give Information to Rehab
Fill out a verification form provided by the rehab center or give them your information during an intake call. The rehab provider often handles contacting your insurance provider to confirm coverage and any specific details, but speak with admissions to confirm this.
- Insurance Company Confirmation
The insurance company verifies whether your plan covers addiction and mental health treatment, as well as any financial responsibilities you may have, such as deductibles or copays (a fixed fee, usually paid monthly, that covers the cost of a medical service or medication, and insurance covers the rest).
- Verification Results
After your insurance provider confirms your benefits (usually within 24 hours), the admissions team communicates with you the details of your coverage, including if they are in or out of network (explained below), what services are covered, duration of treatment covered, level of care covered, and any out-of-pocket costs you may need to pay.
- Finalize Admission
Once insurance coverage is confirmed, you can proceed with the remaining admission process. This may include an assessment, review of medical history, and information regarding emergency contacts.
What Affects Your Coverage for Addiction Treatment?
Insurance coverage for rehab depends on several key factors related to your insurance plan, the treatment providers, and specific policy details [3][4][5].
Insurance Plan Type
There is a range of insurance plans that can dictate the type of treatment you may receive, specifically their range of coverage for addiction and mental health. These can get complicated, so we have broken them down:
- HMO (Health Maintenance Organization): HMOs require choosing a primary care physician (PCP) who manages referrals to mental health or addiction treatment. These are one of the more affordable options, typically offering lower premiums and minimal out-of-pocket costs. However, coverage is often limited to in-network providers, and referrals are required for specialized services.
- PPO (Preferred provider organization): PPOS offer more flexibility and offer more choices of providers, in-network or out of network, without referrals. They often provide better access to mental health and substance abuse services, but have higher premiums and out-of-pocket costs compared to an HMO.
- EPO (Exclusive Provider Organization): These are similar to HMOs, providing some savings and lower deductibles, but cover a larger range of providers, as no referrals are needed for in-network providers. This helps balance cost savings with more provider choice.
- POS (Points of Service): These combine features of both HMOs and PPOs. They allow out-of-network care, but at a higher cost. They typically require referrals from a PCP for specialists or mental health care.
- HDHP (High-Deductible Health Plan) with HSA (Health Savings Account): These plans lower your premium but require higher deductibles before coverage begins. Individuals can use tax-advantaged HSA funds to pay for mental health services. This option is ideal for those who want to save on premiums and manage their costs proactively.
- Medicaid: A state and federally funded program for low-income individuals, covering mental health and addiction treatment. Coverage varies by state, and it’s important to check with the rehab facility to see if they accept Medicaid, as many don’t.
- Medicare: A state and federally funded program for seniors and individuals with disabilities. Works similarly to Medicaid but is age-based (65 years and older) rather than income level.
- Employee Assistance Programs (EAPs): These are employer-sponsored programs offering free or low-cost, short-term mental health counseling or recovery support. Not every company offers EAP, but many do, so it’s important to check with your human resources department.
- Non-Profit and Sliding Scale: Some providers or treatment centers offer income-based pricing and sliding scale services to increase affordability and ensure costs aren’t a barrier to treatment.
Network Status
Is the rehab in-network or out-of-network with your insurance provider? Some popular insurance providers that many rehabs are in-network with include Aetna, Cigna, Blue Cross Blue Shield, Humana, UnitedHealthcare, and Tricare, to name a few.
In-network rehabs have contracts with your insurance provider, agreeing to reduced costs or coverage for services. This leads to lower out-of-pocket costs as insurance plans cover a higher percentage of treatment costs at the facility. Out-of-network providers do not have agreements with your insurance company and can charge higher rates. Some plans may cover only a portion, or none of the costs.
For cost purposes, in-network rehab facilities are often a first choice due to their affordability. Paying out of pocket for rehab can be extremely expensive, and is simply not realistic for many Americans. However, in-network facilities can have longer wait times, fewer personalized treatment options, and may not offer specialized services such as innovative or holistic treatments.
Medical Necessity
Coverage can also depend on the severity of one’s condition and the appropriate level of care. For example, for mild to moderate behavioral health problems, insurance may cover outpatient counseling, but not an entire detox or inpatient program. Patients who are deemed a danger to themselves or others and require stabilization for safety may receive more coverage.
Legal Protections
Laws such as the ACA and MHPAEA require coverage to be similar to physical health treatments. These laws require insurance companies to treat mental health and substance abuse with the same care as physical health and medical treatment [2].
Check Your Policy Details
Even if the rehab network is in-network and your insurance covers care, certain policy details often apply. These may include special limitations, such as the services covered, the duration of treatment coverage, whether medication is covered, and other benefits related to your policy.
Let Rushton Help with Your Rehab Insurance Coverage
Rushton Recovery understands how insurance can be a headache when you are focused on your recovery. Our admissions team is committed to making the process as smooth as possible. We can verify benefits and discuss payment options with you so that finances aren’t a barrier to treatment. Contact our admissions team today.
Sources
[1] Average Cost of Drug Rehab. 2016. National Center for Drug Abuse Statistics.
[2] Glied, S. et al. (2014). Behavioral health parity and the Affordable Care Act. Journal of social work in disability & rehabilitation, 13(1-2), 31–43.
[3] Christenson, E. et al. (2022). Insurance barriers to substance use disorder treatment after passage of mental health and addiction parity laws and the Affordable Care Act: A qualitative analysis. Drug and alcohol dependence reports, 3, 100051.
[4] Seymour, J. et al. (2017). Challenges for Insured Patients in Accessing Behavioral Health Care. Annals of family medicine, 15(4), 363–365.
[5] Behavioral Health Services. Medicaid.Gov.
