A Guide to Insurance Coverage for Addiction Treatment

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Part of the Complete Guide to Understanding Addiction

Treatment Options

There are now so many effective addiction treatment options available for those struggling with drug or alcohol abuse. Thanks to the ever-growing awareness of this type of treatment, America alone now has more than 14,500 drug treatment centers. Many of the treatment options offered at these centers are multi-faceted, in that they usually offer a combination of medical and behavioral therapy treatment methods. It is this combination of treatment methods that the world of addiction treatment has seen the most progress.

However, the ability to pay for such extensive and comprehensive treatment methods out of pocket isn’t necessarily feasible or realistic for most people. For many years, the price was the main reason people chose not to receive professional help. Many people weren’t able to successfully treat their addictive behaviors and live a life of recovery. Thankfully, those times have changed, and the world is seeing a wide range of benefit packages available for those who need them. The Health Care Reform is to thank for much of this. 

The Different Insurance Plans That Cover Addiction Treatment

Thanks to the 2010 Health Care Reform and the Affordable Care Act (ACA), health care is now more accessible for Americans. Because of this, whether the insurance provider is under Medicare, Medicaid, or some private or employer-subsidized plan, benefits for addiction treatment are now more accessible than ever before. 

Of course, the types of programs and length of coverage can vary from insurance plan to insurance plan, but in 2021 it’s hard to find an insurance plan that won’t cover some sort of addiction treatment. If insurance companies don’t cover addiction treatment, then they will be covering the expenses of the physical and mental damages that accrue from the person’s addiction. For this reason alone, more insurance companies are willing to pay for addiction treatment first in an attempt to relieve some of these other expenses. 

The Cost of Addiction Treatment

Addiction coverage has also helped states keep their costs down, which is another reason why addiction treatment is widely covered under state and federal programs. In a recent report done by PBS, they found that, on average, it costs the state nearly $40,000 to incarcerate an adult for one year. Providing residential care for addiction treatment, on the other hand, only costs the state around $14,500. State programs are apt to provide robust treatment options for those struggling with addiction in an effort to reduce the number of adults being incarcerated every year. 

Fifteen years ago, not having insurance could have been someone’s main reason for not seeking the proper care they needed for their addiction. However, in today’s world, that simply isn’t the case. There are numerous options available to people regardless of the insurance plan they are on. If the person doesn’t have an insurance plan, there are state and federal programs, like Medicaid, that offer extensive benefits packages for those who need them. 

And much of this is thanks to the glorious Affordable Care Act. 

The Affordable Care Act: What Is It?

The Affordable Care Act is a health care law passed via the Health Care Reform of 2010 and is sometimes referred to as Obamacare. The extent of this law is vast, but its coverage includes addiction treatment, making it the number one reason more people have the ability to reach out for professional help now more than ever. For those addicted to drugs or alcohol, the ACA will most likely help them pay for their treatment. 

Since the ACA was passed, addiction is no longer a pre-existing condition. For insurance purposes, this is huge because it means that addiction treatment is now covered by almost every insurance provider. 

Finding the Right Plan for Addiction Treatment

Those struggling to find an insurance plan that is right for them can even check out ACA-sponsored insurance plans via the Health Insurance Marketplace. Through this online platform, people can find an insurance plan that covers addiction treatment like many private insurance plans. 

There are also options available for those of lower-income via Medicare and Medicaid. If you fall under the yearly income requirements, you can qualify for this type of coverage, which lowers the cost requirements even more for essentially the same coverage. Just to give you an idea, for a single person, the max yearly income for Medicaid is around $11,000. If you fall at or below this mark, you can qualify for this type of coverage.  

What Insurance for Addiction Treatment Covers

Looking for an insurance plan can be a daunting task, especially when looking for something that is affordable and provides the coverage one is looking for when it comes to proper addiction treatment. 

Luckily, under the ACA, addiction treatment coverage is required to be as complete and extensive as that of a medical procedure. Therefore, here are some things that nearly every insurance plan covers: 

  • Addiction evaluation 
  • An Intervention (if necessary)
  • Alcohol and drug testing
  • Addiction treatment medication
  • Anti-craving medication 
  • Medical detox programs
  • Clinic visits 
  • Home health visits
  • Counseling 
  • Behavioral therapy treatment

Essentially, insurance covers all facility-approved inpatient care, outpatient care, medical detox, and any follow-up counseling and medications necessary for co-occurring mental health conditions. 

HMO and PPO

There are also two common health care plans that are important to note. These plans are the Health Maintenance Organization (HMO) and the Preferred Provider Organization (PPO). 

Under HMO plans, patients can choose their primary care physician. Typically, the physician is out of their network, so the HMO helps them receive that care outside of their network by offering lower premiums. This allows the patient to still see who they want and build a relationship with that physician even if he/she is out of their network, but they must first get a referral from their primary care physician before doing so. 

Under PPO plans, patients can see anyone in or out of their network without a referral. This might be seen as a plus for some, but a possible downside to PPO plans is they typically have higher premiums. They are more flexible than HMOs but more expensive as well. 

Who Is Eligible 

This is where things get interesting. Thanks to the Affordable Care Act once again, any American whose income is four times the federal poverty level or lower is eligible for the ACA tax credit. 

According to HealthCare.gov, the newly revised Federal Poverty Level (FPL) in America for 2021 is as follows: 

  • Individual: $12,880
  • Family of 2: $17,420
  • Family of 3: $21,960
  • Family of 4: $26,500
  • Family of 5: $31,040

For those living in Alaska and Hawaii, please check out the ASPE for more information. 

The guidelines set in place make eligibility more common than ever before. Still, for those looking at paying some of the money out of pocket, there are reimbursement options available as well. 

What Are the Different Categories of Reimbursement?

The ACA’s main purpose was to make health care more accessible in every form. Therefore, it is only right that there are certain reimbursement categories available as well. The three main reimbursement categories are Partial Hospitalization Programs (PHP), Residential Treatment Center (RTC), and Intensive Outpatient Programs (IOP) Reimbursement. 

PHP Reimbursement

There are two types of PHP reimbursement, hospital-based and freestanding PHPs. Hospital-based PHPs are easier to work with for reimbursement purposes because they don’t have to enter a participation agreement with the insurance provider. Reimbursement is usually done via an all-inclusive per-diem payment that includes the services used while in the program. 

RTC Reimbursement

RTC services are usually reimbursed on a uniform per-diem basis. Payment is based on the per-diem rate or the lesser or charges. This rate includes all services provided during the RTC program. 

IOP Reimbursement

IOP services are paid via the per-diem rate or lesser of charges. All individual, family, and group psychotherapy services and pharmacologic management are included in this payment. 

Depending on what program you are enrolled in, the facility will work with the insurance provider to have the person’s reimbursement rolled out in a timely manner. Above all, the most important thing is that people receive the help they need and can afford. 

Helpful Health Insurance Resources 

Insurance options are available. American health care coverage has never been more accessible for addiction treatment services, and the accessibility only continues to grow. If you are struggling with addiction and want to receive treatment, check out all of the above-stated resources and information. The benefits and coverage are there for you. You can contact Avenues Recovery Center to help you navigate the red tape and understand the benefits available to you. Our professionals will be happy to guide you through the whole process!

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