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Addiction Treatment and Your Health Coverage

Addiction was not truly considered a diagnosable and treatable mental illness by the U.S. medical community until about forty years ago. And while we no longer see an addict’s need to use as a failing in good judgment, stigmas still cloud the public image of people who need specialized substance abuse treatment to stop.

According to the 2012 National Survey on Drug Use and Health, over 21 million Americans struggled with a dependence on drugs or alcohol last year, but less than 2.5 million received treatment at a specialty facility. The report also points out that a full quarter of those that needed treatment did not receive it because they lacked health insurance.

Fortunately, under the new healthcare laws, addiction treatment is deemed “an essential health benefit” that commercial health plans must cover. In fact, the number of patients seeking treatment for drug and alcohol problems could more than double over the next year as the rolling healthcare reform measures come into effect.

You can and should get cost-effective and valuable addiction treatment when it’s needed. Educating yourself on your health plan, your state’s laws, and the steps to get care make that an achievable goal.

Understanding Your Addiction Treatment Coverage

Addiction is legally defined as a diagnosable medical condition, but the stigma that accompanies drug or alcohol abuse has historically made it difficult to get care: families or individuals may be hesitant to push for their rights, and some health plans have financial incentives for denying treatment, so they may twist words around in a health policy in order to misrepresent what’s required of them.

Though insurance companies may not always advertise this fact, as of now, 43 U.S. states require commercial group health insurers to cover addiction treatment. If you or a loved one is in need of either detoxification or rehabilitation treatment, it’s critical to know how your insurance policy is worded and exactly what rights you’re entitled to as a policyholder.

Start by looking at your health plan. Wording in that policy should define a full continuum of addiction care, which, according to the National Alliance for Model State Drug Laws, includes “intervention, detoxification, inpatient rehabilitation, outpatient treatment, and intensive outpatient, family, and codependency treatment.”

Keep in mind that The Mental Health Parity and Addiction Equality Act of 2008 makes it illegal for insurance companies to discriminate against patients because of addiction. (The MHPAEA does not require your insurance to cover specific addiction disorders or treatments, but it does require that coverage for mental and substance abuse disorders be offered at parity with standard medical conditions.) If you aren’t clear on your specific treatment options and rights, you should take two steps:

  1. Contact your insurance company to clarify the policy with them.
  2. Check the NAMSDL website to find your state’s lead agency for administering addiction treatment services: this differs by state, but that agency should be able to clarify the exact laws and policies.

Working with patient advocacy groups like NAMSDL or the Substance Abuse and Mental Health Services Administration (SAMHSA) can also be useful. SAMHSA is comprised of subject-matter experts that advise the Department of Health and Human Services, and as such they’re able to provide consumers with a wealth of information on their rights in regards to health care.

Another option is to contact a third party association, like Addiction Treatment Services, that can help you find a health insurer providing clear and affordable coverage for addiction treatment. Keep in mind that these third parties do not offer specialized options, discounts or services that cannot be found through each insurer directly.

Given the state laws regarding all commercial group health insurers, trying to navigate a difficult insurance situation while also struggling with addiction may sometimes be too much to handle: switching to a policy that does uphold those state laws could be easier than fighting with your current insurer. On the other hand, as will be explained later, there are ways to stand up to a reticent insurer, and it’s through that advocacy that the stigma associated with addiction treatment can and will change.

Know the Standard Coverage Levels in Your State

With the exception of Arizona, Georgia, Indiana, Iowa, Idaho, Oklahoma, and Wyoming, all states currently require commercial group health insurers to cover addiction treatment services as they would any other prescribed medical treatment. To find out more about the current laws regarding coverage of substance abuse treatment in your state, contact your state’s insurance commission or the National Alliance for Model State Drug Laws.

Most commercial group health care policies include provisions for detoxification treatments that require hospitalization or in-house care as well as out of house care. To give you an idea, many providers say coverage and reimbursement rates average out to 70-75% of total costs per patient.

Inpatient Care Costs and Coverage

Some health insurance policies cover 100% of inpatient costs for an unlimited number of days, though certain plans limit the number of days or require copayments. It is critical that policyholders understand their coverage plans regarding inpatient care, as some plans will expect patients to contribute a 10-50% copay. In this case, residential treatment can be overwhelmingly expensive. In a 2011 survey of over 44 private treatment providers nationwide, these average costs were reported:

  • Medical detox: $1,707 per day
  • 28-day residential treatment programs: $19,067
  • 10-week intensive outpatient programs: $6,863

If you’re insurance policy does not currently cover the inpatient care that you or a loved one is in need of, discuss your financing options with both your doctor as well as the treatment facility you’ve been referred to. Because rehabilitation centers have extensive experience fighting for patients’ rights and negotiating with insurers, they’re often able advise you in securing fair coverage.

Outpatient Care Costs and Coverage

This all sounds very expensive remember that for the majority of the country’s 20 million patients struggling with substance abuse, treatment doesn’t require inpatient treatment. In one study of Californian claims for substance abuse treatments, for example, 27% of insured patients only needed between $1-100 worth of services, while 20% needed $1000-2,500 worth of care.

Rehabilitative care can overlap with detoxification — most policies include the 20-visit-per-year provision, as well as requiring copayments. Rehabilitative care encompasses counseling but does not usually include home residential care. (Some policies allow you to add a rider, at additional cost, for the latter type of treatment.) Outpatient care will usually include a blend of prescribed treatment medications that will help addicts reestablish and maintain their brain chemistry and function as well as ongoing behavioral therapy sessions.

Obviously, treatment approaches and their costs vary as widely as the range of substance abuse issues they target. Depending on a patient’s abuse habits and their medical histories, treatment periods can be as short as three months or can be considered lifelong commitments. Usually, patients require an individualized blend of treatments that include medication and behavioral therapy to cope with the major stages of recovery — from withdrawal to maintaining sobriety once it’s achieved.

How the Affordable Care Act Can Expand Your Coverage

While those are certainly high costs, even with coverage, both insured and uninsured Americans should review their health plan before 2014. As of October 1st, citizens will be able to apply for insurance through the Health Insurance Marketplace. Not only will this allow people to comparison shop for health insurance, but as part of the Affordable Care Act, policies through the Marketplace guarantee an essential benefits package comprised of 10 items. One of those items is coverage for both drug addiction and alcohol abuse treatment.

Though not everyone qualifies to get insurance through the new law, you can use Healthcare.gov to find out whether you’ll qualify, and you can calculate potential cost savings through the Kaiser Family Foundation’s online calculator. Because the Parity Act, mentioned earlier, is encompassed within the ACA, and because both pieces of legislation preserve state laws, these changes to health care should continue making it easier and more affordable to get coverage for drug and alcohol addiction treatment.

Keys to Holding Your Provider Accountable

As stated earlier, it’s essential to familiarize yourself with your healthcare plan and check your state laws before approaching your provider about expanding your coverage. You’ll be a stronger force to be reckoned with if you know your rights as a policyholder. For instance, if your insurer refuses to cover costs that were not pre-authorized, your state might very well have a law prohibiting this denial of service — In Pennsylvania, for example, the law states that “there’s no need to authorize or pre-certify treatment for alcohol and/or drug problems through your health insurance plan.”

You can also consult with state legislators, the state insurance department, or the Office of the Attorney General if your insurance company is denying you coverage or discriminating against you because of a need for addiction treatment. If you’re already in touch with an addiction treatment center, they can also be a good resource: the Hazelden Center, in Minnesota, for instance, states on their website that they “will work closely with insurance companies to streamline the process and ensure that the patient receives the maximum benefit available.”

While it’s not always an easy discussion, it’s important to stand up for your rights when working with your healthcare provider. Addiction treatment has been stigmatized for years, causing many who might have benefitted from this treatment to go without. Your fight for coverage helps further the cause of drug and alcohol abuse patients nationwide and paves the way to better coverage and health care for everyone.

Prevention and Addiction Treatment Resources

Individuals and families struggling with addiction need to count on a support network of treatment centers and prevention and recovery advocates. Turning to these organizations is an essential part of recovery, and also the best way to become involved in the effort to raise awareness of the hardships and dangers of addiction. Please explore the resources below to learn more about the organizations helping addicts every day.

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