Does Insurance Cover Rehab?

Does insurance cover rehab? The short answer is: “It depends.”

Concerns about paying for rehab pervade. According to the 2008 Survey on Drug Use and Health (NSDUH), the most common reason substance abusers do not enter rehab is a lack of health insurance, insufficient insurance coverage, or other financial limitations related to paying for treatment services. Despite these concerns, substance abusers do manage, through various efforts, to enter rehab. A national review of admissions to rehab in 2007 showed that 60 percent of those who entered rehab had no health insurance at all.

The high level of rehab admissions, even in spite of the lack of health insurance, is quite a feat in light of the fact that a NSDUH study found that in 2013, while 22.7 million substance abusers needed rehab for illicit drug or alcohol use, fewer than three million actually received treatment. Substance abuse is always taking a gamble on your health, and not seeking treatment is equivalent to doubling down. If substance abusers are finding their way into treatment despite a lack of insurance, it’s because they or their loved ones realize the severity of not entering rehab.

Information for the Uninsured

The Affordable Care Act (ACA) is changing the face of insurance coverage in America. This national health care plan was instigated, in part, by longstanding concerns about many Americans suffering from a lack of health insurance coverage. As an indication of the lack of coverage in America pre-ACA, the 2012 National Health Interview Survey revealed the following information:

  • About 45.2 million Americans under age 65 were uninsured.
  • In the under-65 group, 61 percent had private insurance.
  • In the 18-64 age group, 20.9 percent were uninsured.
  • In the same group, 64.1 percent had private insurance and 16.4 percent relied on a public health plan.

Today, anyone who is not insured may benefit from ACA. The federal government operates Healthcare.gov where Americans can connect with a health care plan navigator and learn important information about coverage. Based on personal information, including income, a navigator works with a client to find affordable private insurance options in the “marketplace.” In some qualifying cases, where income is low enough to meet the necessary guidelines, a navigator can help a client to apply for state Medicaid benefits (public health insurance).

An alternative source of health insurance is employment-based insurance and dependent benefits (such as coverage through a spouse or parent employee). A substance abuser who is uninsured is well advised to explore all options and do a cost comparison. In the case of employment-based or other insurance options, it is best to contact the carrier directly. In the alternative, a human resources representative (at the employer’s office) may work as an intermediary and be a source of helpful information.

If the substance abuse has lapsed into a state of health that makes self-help impossible, a loved is best advised to contact any potential private insurance carriers and also a health care navigator. The loved one will want to learn if there is a procedure whereby he or she can act on behalf of the person in need of rehab services to apply for insurance (especially if the substance abuser can be the loved one’s dependent for private insurance purposes).

Private Health Plans

As discussed, a health care navigator can assist Americans to locate a suitable insurance plan in the “marketplace.” The private plans in the Marketplace are required to provide a substance abuse treatment benefit. Services include behavioral support (such as psychotherapy). Specific benefits for behavioral health vary from state to state and plan to plan. Consumers can learn more about the details of plans before they select one.
Employment-based private health plans, also known as group health insurance plans, generally cover substance abuse treatment under mental and behavioral health services. While the ACA has impacted private health plans, coverage gaps may still exist. However, the Mental Health Parity and Addiction Equality Act (MHPAEA) includes provisions for group health insurance plans.

The MHPAEA applies to group health care plans that have more than 50 members. The MHPAEA does not require insurance companies to have a mental health benefit, but if the plan elects to include this coverage, there are certain conditions that must be met. For instance, the coverage for physical health issues cannot be greater than that for mental health issues. Further, group health plans that fall under the MHPAEA cannot carry separate deductibles for mental health care nor limit the number of visits or charge higher copays compared to services for physical issues.

Some individual health insurance plans (e.g., purchased individually, not based on employment, and not publicly subsidized) cover substance abuse treatment. Although the MHPAEA does not apply, there may be state laws that influence terms of coverage related to substance abuse treatment. Members of individual insurance plans are best advised to contact the carrier directly to learn the specific terms of coverage. It is important to provide as much relevant information as possible about the type of rehab services sought. For instance, some plans may cover alcohol treatment but not cigarette smoking cessation programs. Also, an insurance company may not cover court-ordered treatment unless, for instance, the substance abuse passes the insurance provider’s medical necessity standards. When it comes to insurance, it is always best – whenever possible – to be safe than sorry. One of the keys to recovery is not being stressed about the cost.

We understand that paying for treatment may be a concern, and we have years of experience working with insured and uninsured clients. Our lines are open 24 hours to provide you or your loved one with a free confidential assessment. Call now.

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