Paying for Drug Rehab – Insurance Coverage for Treatment

When someone who is addicted to drugs or alcohol decides to seek the treatment that they need to recover, the first question they ask is: “How am I going to afford rehab?”

Many people who have health insurance wonder if their policy will cover the cost of rehab. The information presented below will help you gain an understanding of treatment and health insurance, as well as important legislation that affects health care coverage for rehabilitation. When you have an understanding of your coverage, you will be able to find the best possible care and all of the advantages that you are entitled to.

We are dedicated to helping those who are battling addiction disorder find the treatment that they need. Our counselors will assist you with finding a rehab center that will work with your health insurance so that you can locate a quality treatment facility. Contact us today to learn invaluable information about how your health insurance can help you cover the cost of treatment.

Parity Laws Explained

In order to understand how health insurance works in regard to drug and alcohol rehabilitation, it’s important to have an understanding of federal and state parity laws. What are these laws and how do they affect health insurance coverage for rehab? Below, we’ll explain these laws so you can find out how they affect you.

Federal Parity Laws

It used to be that health insurance plans offered very limited, if any, coverage for substance abuse and addiction treatment. On October 3, 2008, that changed. It was then that President George W Bush approved the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (often simply referred to as the Parity Act). On January 1, 2010, this federal law became effective for most health insurance plans.

Under the Parity Act, companies that employ 50 or more people and offer group health insurance plans that provide benefits for mental illness, as well as addiction rehabilitation, to offer said benefits so that they are not as restrictive than the coverage that insurance plans offer for other medical needs.

While group health plans are not required to offer mental health and addiction treatment under the Parity Act, if they do cover this type of treatment, they are required to do so with “parity”; in such a way that is equal to how the plan provides coverage for medical and surgical care.

The purpose of this law is to highlight the connection that exists between an individual’s mental health and his or her overall health and well-being. By illustrating this connection, those that are suffering from substance addiction disorder can get the treatment that they need to recover from addiction.

The Parity Act does not apply to smaller employers. Furthermore, it does not apply to individual health insurance plan, Medicare, or Medicaid. However, depending on how these plans are handled, some exceptions to exist.

State Parity Laws

In many states, similar laws had already been passed prior to the passage of Federal Parity Laws. As such, the majority of large employers in the states that had passed these laws were covering benefits for substance abuse and addiction treatment in ways that were similar to how they covered other medical needs. With that said, some employers that offered self-insured healthcare plans (organizations that paid for benefits with their own money instead of using the money provided by the insurer) do not have to abide by laws that are mandated by the state; however, they are required to comply with the Parity Act. Nevertheless, a self-insured organization could still decide whether or not their health insurance would cover substance abuse; if the employer chose not to offer such coverage, then it didn’t’ have to comply with federal or state Parity Laws.

With that said, 96% of employers report that they include coverage for drug rehab, as well as mental health. When a plan falls under both Federal and State Parity Laws, whichever option offers more benefits will apply.

Health Insurance and Substance Addiction Rehabilitation

Because of the above-mentioned laws, as well as a number of other factors, the coverage that health insurance companies offer for drug and alcohol addiction treatment centers varies greatly. The type of coverage you receive will be dependent on a variety of factors, including:

  • Whether or not the Parity Act is applicable to your health insurance plan
  • The state that you reside in
  • The type of benefits that your health insurance plan offers

Even if you do have coverage for rehab, it’s still important to understand what coverage entails and how your insurance carrier will handle your specific case.

Vital Questions to Ask Your Health Insurance Provider

  • Is drug rehab covered by my plan? Your health insurance provider will be able to tell you exactly what type of benefits you have, and if drug rehab is covered. If it is covered, your provider should tell you exactly how it is covered.
  • Is a referral necessary? Some health insurance companies require referrals for substance abuse rehab. If a referral is required and you do not have one, the benefits your insurance provides may be reduced or completely denied. If you received emergency treatment and didn’t have the time to secure the necessary referral, speak to your insurance provider. They may be willing to make exceptions.
  • Am I covered? Your case has to be considered medically necessary in order to receive coverage. Depending on your plan, it might not be deemed necessary if you have already been to rehab and failed to adhere to your last treatment. In other situations, your case may be covered, but not in a way that you would want it to be; for example, your diagnosis may be covered, but only for outpatient care.
  • What type of health insurance plan do I have? This is important, because different plans have different requirements. For example, with a preferred provider organization, you will be able to choose the covered provider of your choice; but, you will receive better benefits if you select a provider that is in your network. With a managed care plan, you will be required to receive treatment from a provider in the network in order to be covered. Lastly, consumer-driven health plans usually have high deductibles, and once it is met, all services will be completely covered by the plan.
  • Do you have to pay a deductible? A deductible is the amount that you have to pay each year before your plan will kick-in and cover care. In some cases, the deductible might be waived; however, with others, you will be required to pay the deductible completely before your insurance provider will cover your care.
  • Are there any co-payments? Co-pays are applied to individual services, such as visits to a doctor’s office and prescription medications. Typically, co-pays do not apply to a deductible. If you are seeking outpatient care, you might have to pay a co-pay for each session on the date your treatment takes place.
  • Are there any restrictions? Find out if there are any restrictions regarding where you can seek treatment. It’s important to find this out, because if you are treated at a facility that is not covered by your health insurance, you will be responsible for paying the entire cost.

What If You Don’t Have Insurance?

If you don’t have health insurance, or your coverage doesn’t pay for drug and alcohol rehab, don’t despair. There are options available to you. For example, there are several federally funded and goodwill treatment centers that do not require patients to pay for care. There are also scholarships and grants available that can help to cover the cost of rehab. You might also be able to setup payment plans with the rehabilitation center.

For Help Finding an Affordable Rehab Center, Contact Us Today

Your sobriety is paramount. Whether your health insurance covers treatment or not, you can seek the care that you need in a way that works with your budget. To learn more, contact us today.