Understanding Insurance Coverage for Addiction Treatment Services
When searching for addiction treatment one of the first questions is: “How do I pay for treatment?” Fortunately, many treatment centers can utilize medical insurance to pay for some or all of the treatment episode. This coverage is protected by a law established in 2008, this law called The Mental Health Parity and Addiction Act. This law placed mental health and addiction treatment services on the same level as surgical, medical or other health benefits. The Parity Act as it has come to be known does not require insurance providers to cover addiction treatment or mental health treatment. What it does prohibit providers from is limiting benefits for addiction or mental health treatment in ways that they do not limit for physical medicine.
Additionally, the Affordable Care Act that was signed into law in 2010 requires insurance policies to offer substance abuse or mental health coverage in most cases.
In short, your insurance policy likely has some benefit for coverage of substance use or alcohol use disorders. Though the costs and levels of care still vary widely. These laws have made it somewhat easier to find a covered addiction treatment program but there are still wide variations in coverage, costs, and levels of care available.
Health insurance policies cover 6 basic classifications of care.
- Inpatient, in-network
- Inpatient, out-of-network
- Outpatient, in-network
- Outpatient, out-of-network
- Emergency care
- Prescription drugs
That means that if you have a policy that covers these categories for physical medical needs, it must also offer these benefits for addiction treatment or mental health. This does NOT mean that your policy must cover all of these benefits – just that they cannot cover them differently based on physical or mental health. For example – a health maintenance organization (HMO) policy excludes ALL out-of-network benefits. So, if the addiction treatment facility you are looking into is not in-network with your HMO policy, you will have to self-pay. There are other policy limitations that you will need to be aware of as well.
- Some policies require a referral from a doctor
- Some policies exclude higher levels of care such as inpatient or residential
- Some policies limit the number of days for higher levels of care
- And so on…
Most treatment centers make this easy for you by doing verification of benefits for your specific policy. They will tell you whether their service is covered and whether or not you will have co-pays or out of pocket expenses. It is usually best to call the treatment center and provide them with your insurance information as they will best be able to determine if their level of care and service is allowed under your health insurance policy.
The types of coverage you have available will depend on the type of plan you purchased. Plan types generally fall under 6 categories.
Health Maintenance Organization (HMO): is a type of plan that is in-network only. These networks are typically made up of a group of providers that limit medical care provided through doctors and agencies that are under contract to the HMO. HMO plans have in-network addiction, treatment providers. These are available by calling the number on the back of the card or by checking online. An addiction treatment provider will also know if they have a contract with a specific HMO insurer.
Exclusive Provider Organization (EPO): In the United States, an exclusive provider organization is a hybrid health insurance plan in which a primary care provider is not necessary, but health care providers must be seen within a predetermined network. Out-of-network care is not provided, and visits require pre-authorization.
Point Of Service (POS): A Point of Service Plan is a type of managed care plan that is a hybrid of HMO and PPO plans. IN a POS plan the patient must still use an in-network physician but can also go out of network for care. As long as the primary care physician has made a referral then the out of network care may be covered.
Preferred Provider Organization (PPO): a PPO plan typically has a network of physicians and facilities which are lower cost to use, but they also offer out of network benefits where you may choose the facility r provider but must pay a higher coinsurance, copay, or patient responsibility. These types of plans tend to be the most flexible when looking for specialized care or if you prefer a specific doctor or facility.
Medicare: Medicare is a federal health insurance program for people 65 years and older and certain people with disabilities that are under age 65. Medicare is essentially a large HMO and has no out of network benefits.
Medicaid: Medicaid is run by the state you reside in and is funded jointly by federal and state dollars. Medicaid assists low-income families or individuals in paying for medical needs, Coverage depends on the state you are in, and many states do offer addiction treatment as part of their Medicaid plans.
Thankfully due to the Parity Act and shifting public opinion on addiction as a disease and not a moral failing many insurance policies will be able to cover much of the costs associated with addiction treatment episodes.
When you decide to start looking for addiction treatment a good place to start is by understanding your insurance plan and what is and is not covered. Your insurer may be one place to start but they will certainly steer you in the direction of an in-network provider. If your plan allows, you have the right to choose an out of network facility and your insurance company won’t always know which facility is the best for your situation. Admitting addiction treatment is necessary is a huge step – so keep asking for help when searching for a provider. Ask your doctor, your friends, family or others who have had experience with addiction.
When you have narrowed your list of providers down give them each a call. Most providers have a person who specializes in insurance and billing and will walk you through the process. Their experience is invaluable.
Now that you understand what your medical plan can cover the real and exciting work begins. Now you can focus on healing and recovery for life!