Differences in Coverage & Costs
What This Article With Teach You
All health insurance is not the same. Covered medical care varies by insurance type, as do the out-of-pocket costs for these services. By the end of this article, you’ll know:
- The major forms of health insurance
- What categories of insurance coverage mandate substance abuse coverage
- What to do if your insurance doesn’t cover detox or you’re uninsured
The major forms of health insurance in the United States are employer-provided (i.e. insurance from your job), Obamacare, Medicare, Medicaid, and TRICARE. While there are other forms of insurance (e.g. short-term plans, hospital insurance, etc.), the ones we cover are the most popular forms of coverage and the ones most relevant to addiction treatment. After reviewing each insurance category, we will also share a few thoughts on payment plans for the uninsured or those whose coverage does not apply to your preferred detox or rehab facility.
Employer Health Insurance
Employer-health insurance comes in several varieties. Small companies with 50 or fewer workers are commonly covered by “small group” health insurance. Small group plans are governed by the Affordable Care Act (otherwise known as Obamacare). Small group plans under the Affordable Care Act (see below for more details) cover substance use disorder treatment. The small group plan’s network type (e.g. HMO, PPO) affect what detox facilities are eligible for insurance coverage. PPO plans allow out-of-network healthcare providers to be used, which may be an advantage if the in-network detox center is not suited to your needs.
Larger company health plans, as well as ones that are self-insured, are regulated under a law known as ERISA. ERISA has fewer benefit mandates than Obamacare plans, though large company health plans are associated with broad benefits. If a company does include substance abuse treatment among their health plan benefits, the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) prevents this large group health plan from imposing less favorable benefit limitations on substance abuse benefits than is the case for the plan’s coverage of traditional medical benefits. For example, the deductibles and co-payments charged for substance abuse treatment cannot be excessive and must be similar to the cost-sharing applied to other medical services covered under the plan. Substance abuse treatment, when included as a benefit, are also prohibited from limitations and cost-sharing requirements unique to these services and not applied to the rest of the plan’s medical benefits. Additionally, upon request a plan participant must be provided with the guidelines for determinations of substance abuse treatment necessity (as well as the reasons for a denial of such coverage for the participant).
Obamacare is a nickname for health insurance plans complying with the Affordable Care Act. These health plans have ten Essential Health Benefits defining the scope of medical care for which the insurance plan will pay. These benefits include in-patient hospital care, emergency care, prescription drug coverage, and pregnancy and newborn care. Most importantly for people who struggle with substance abuse, Obamacare health plans include coverage for substance use treatment.
The challenge with Obamacare plans is that many of these plans are HMOs with narrow networks, so your preferred choice for detox is not necessarily covered. PPO Obamacare plans, however, allow for out-of-network care and will likely enable you to receive coverage for your preferred detox facility.
While Medicare primarily provides health coverage for people ages 65 and older, it also has millions of beneficiaries who qualify for coverage by virtue of disability. Medicare benefits do include coverage for substance abuse, though they are not necessarily extensive. Medicare will cover detox in instances where detox is determined to be medically necessary (including drug detox).
Medicare Advantage plans deliver Original Medicare (Parts A & B) through a healthcare provider network and often expand Medicare coverage with supplemental benefits (such as dental, hearing, and vision coverage). If you have Medicare Advantage coverage, you should investigate whether you have any supplemental benefits related to Medicare. A Medicare Advantage PPO plan, having the option of out-of-network coverage, may also help you a detox center that will accept the coverage. However, Medicare’s reimbursement rate for medical services is lower than what is paid under commercial health insurance plans. Consequently, a detox center may not accept Medicare rates for their treatment services.
Medicaid is government-sponsored health plan serving low-income adults and children as well as certain other qualifying groups. The program is run in collaboration between local state governments and the federal government. Medicaid generally covers treatment of substance abuse. The main issues with Medicaid coverage and detox is 1) do you qualify for Medicaid, 2) will Medicaid determine detox is medically necessary, and 3) does your preferred detox accept Medicaid reimbursement. Medicaid reimbursement rates can be lower than Medicare, which can be an impediment to acceptance of this coverage by various detox facilities.
TRICARE, like Medicare and Medicaid, is another government-sponsored health insurance. The TRICARE program is limited to U.S. armed forces personnel, their beneficiaries, and military retirees. TRICARE does cover detox in the context of substance abuse disorder.
What to Do When You Lack Insurance Coverage for Detox
Having insurance with substance abuse benefits does not guarantee it will be accepted by all detox facilities. If your insurer does not cover the detox facility you want, you can call the insurer and discuss alternative facilities that accept your insurance coverage. If you are uninsured, you also have options. A lack of health insurance does not prevent you from seeking care at a detox facility. Many detox facilities, including this one, are willing to discuss payment plans in the absence of insurance. There are also nonprofits that seek to connect people suffering from substance abuse with appropriate treatment.