What’s Covered? Insurance and Rehab Coverage
The National Institute on Drug Abuse (NIDA) reports that drug addiction treatment can save society and individuals around $12 for every $1 spent on rehab when you factor in costs related to healthcare, the legal system, criminal justice, accidents, theft, and workplace productivity that are all impacted by the disease of addiction. With the implementation of the Affordable Care Act (ACA), treatment access and insurance coverage for mental and behavioral health issues, including addiction, have improved. In many cases, these services are now required to be covered at equal rates to other necessary medical or surgical services, which is called parity. So, in short, yes, insurance can cover rehab. Detox services, inpatient and outpatient treatment programs, medications, therapy, counseling, maintenance, and follow-up care may be covered by insurance.
As the National Survey on Drug Use and Health (NSDUH) reports that in 2014 over 21 million American adults battled addiction, this is great news. It is important to fully understand insurance coverage and how to use it toward rehab services, however. Not all facilities may accept insurance as a form of payment, for example. While many public addiction treatment programs often accept any and all people regardless of their financial situation, private rehab facilities may not. These programs may still accept insurance for at least portions of the treatment provided, however.
Insurance providers may pay for treatment services with specific rules and regulations in place as well. For instance, many insurance policies will only cover outpatient treatment services or only detox services. Some policies require individuals to seek a referral from a primary care provider before covering services and may only provide coverage for residential treatment programs after an individual has first attempted outpatient treatment.
Treatment must also generally be deemed “medically necessary” before insurance will cover it. Insurance plans may only provide coverage for services rendered at “approved providers” in many cases as well. Some policy’s coverage may be more comprehensive than others. Both the insurance company and the professional staff at a rehab facility can be great resources for understanding how to make the most out of the coverage available.
Understanding Insurance Coverage
Insurance coverage contains a lot of nuances and specifics, and it is essential to understand some of the language used when it comes to insurance. Common insurance terms and their definitions are outlined below.
- Policy: type of insurance plan
- Policyholder: person insured under the policy
- Carrier: the insurance company that holds the policy
- Out-of-pocket costs: fees that will need to be paid that are not covered under insurance
- Deductible: the amount the policyholder must pay out of pocket before services are covered (e.g., If someone has a $500 deductible, services are covered after that amount has been reached.)
- Premium: the monthly fees paid to maintain coverage
- Claim: the bill submitted to insurance for medical services provided
- Annual limit: the maximum amount that is paid in a year
- Allowable charge: the amount that will be considered paid in full; may differ from the actual charge, as it’s often a discounted rate given to preferred providers
- Approved facility or provider: a medical provider or facility that services will be covered at as they often have an agreement with insurance companies to offer services for a flat or discounted rate
- Out-of-network provider: providers that are not part of a specific network; fees may be more for out-of-network providers
- In-network: providers within the network that generally provide medical services at a discounted rate
- Certificate of coverage: paperwork containing information about coverage and proof of coverage
- Co-insurance: when insurance covers things at a specific percentage and the policyholder is expected to cover the rest (e.g., Insurance policies may cover services at 80 percent and individuals must pay the remaining 20 percent.)
- Copay: the amount that will need to be paid at the time services are rendered; generally, a specific amount for each type of service
The following are examples of different types of insurance plans that may be used to pay for rehab:
- Preferred Provider Organization (PPO): This insurance plan allows individuals to use a wide network of providers and go out-of-network for services without a referral. Monthly premiums and deductibles are typically higher than with other plans.
- Health Maintenance Organization (HMO): This type of insurance plan is strict about policyholders remaining in-network for coverage. It usually has lower monthly premiums and deductibles, and referrals are required to obtain services from a specialist.
- Point of Service (POS): This type of insurance plan has the flexibility of a PPO, wherein policyholders can go out-of-network for a fee. It also doesn’t require a referral for specialists, with similar rules as an HMO for choosing an in-network primary care provider. It often has high deductibles and premiums.
- Exclusive Provider Organization (EPO): This managed care network is small and limited to in-network providers, although a referral is not needed to see a specialist.
- Health Savings Account (HSA): This is a special savings account with tax advantages that individuals can use to pay for medical services.
- High Deductible Health Plan (HDHP): Out-of-pocket expenses are higher, but premiums are typically lower.
5 Tips for Using Insurance to Cover Rehab
Navigating insurance coverage to defray the cost of rehab may seem daunting initially, but there are several things people can do to make the process easier.
- Learn everything possible about the insurance policy. Go over the policy with a fine-tooth comb to determine what is covered and what the requirements are for coverage to be granted.
- Keep up with monthly premiums. Staying current with insurance payments ensures that there will be no lapse in coverage.
- Understand all out-of-pocket expenses and budget accordingly. Talk to a professional at the chosen rehab facility about payment plans and options.
- Know what type of plan you have, whether or not services are in-network or out-of-network, and whether or not a referral is required.
- Make sure that the services required are covered and that the facility is an approved provider. Even if the level of care a person needs is not covered, be sure to discuss options with staff members.
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