Substance use disorders and issues surrounding alcohol and/or drug abuse and dependency are considered to be essential health benefits under the Affordable Care Act. As such, they are required to be covered in the same manner as other medical and surgical services as HealthCare.gov states. This is called parity, which means that care for issues surrounding substance abuse, behavioral issues, and mental health all need to be treated the same as other medical concerns. Insurance coverage may vary from state to state and insurance policy to insurance policy, but in a basic sense, insurance does cover alcohol treatment services.
Prevalence of Alcohol Abuse and Addiction
The National Survey on Drug Use and Health (NSDUH) estimates that in 2014, approximately 17 million people (Americans aged 12 and older) battled an alcohol use disorder, which equates to almost 6.5 percent of the adult population. Alcohol abuse and addiction are major health concerns in the United States, as the Centers for Disease Control and Prevention (CDC) reports that excessive drinking results in almost 90,000 deaths each year. In 2006, alcohol abuse cost American society almost $2 per drink in lost productivity in the workplace, healthcare expenses, criminal justice costs, and motor vehicle crash expenses. More people abuse alcohol than any other addictive substance in the United States, the National Council on Alcoholism and Drug Dependence (NCAAD) publishes.
The National Institute on Alcohol Abuse and Alcoholism (NIAAA) reports that in 2014, 1.5 million American adults received treatment for an alcohol use disorder (AUD). Of the people in publicly funded substance abuse treatment programs in 2008, almost a quarter of them were receiving care for issues surrounding alcohol, the Treatment Episode Data Set (TEDS) published by the National Institute on Drug Abuse (NIDA) reports. In 2014 according to NIAAA, only about 9 percent of the population who actually needed treatment for an AUD received it, however.
There are many potential barriers to treatment, one of which is the cost, and many who need help struggle with how to pay for it. Fortunately, in the long run, alcohol abuse treatment costs significantly less than continued alcohol abuse and addiction. Much of the time, individuals can use their health insurance to defray the cost of care.
Understanding Alcohol Treatment and Insurance
There are several types of alcohol abuse treatment programs. In general, they fall into two main categories: residential and outpatient. Within these programs, detox, therapy, counseling, education, complementary methods, medications, treatment for co-occurring medical or mental health disorders, and aftercare services may be provided or offered.
Residential, sometimes called inpatient, means that the person stays onsite for a period of time during treatment, while outpatient means that the person goes to a facility for meetings and sessions during the day and goes back home each night. Some outpatient programs are more intensive and structured than others.
Different insurance policies may cover different types of treatment and may provide variable levels of coverage, depending on what type of coverage needed. Any insurance plans sold under the federal Marketplace cover both therapy and counseling as behavioral health services, mental health inpatient care, and treatment for substance use disorders, regardless of whether or not the condition is considered to be pre-existing (meaning that the disorder existed prior to insurance coverage). Many insurance plans will require that individuals first receive a referral for treatment services, however, and they may put parameters on the coverage. For example, some plans may require that individuals first attempt an outpatient program and essentially “fail” that before providing coverage for a residential program. Other plans may have a set length of time for coverage, allowing for a specified number of days per year at an inpatient facility or a set number of therapy sessions per year. Services often need to be deemed “medically necessary” to be covered as well.
There are differences in the types of insurance coverage offered. For instance, under a Health Maintenance Organization (HMO), individuals seeking treatment are required to remain in-network, using a provider that the insurance company has an agreement with to provide discounted services, and they must have a referral for specialty services like substance abuse treatment. Out-of-network providers may not be covered.
Individuals who have coverage through a Preferred Provider Organization (PPO), may be able to use both in- and out-of-network providers for services, although typically they will pay more for out-of-network providers. The Washington Post explains that a Point of Service (POS) plan is a kind of combination between an HMO and a PPO, meaning that in order to receive coverage for a specialty service, a referral from a primary care physician is required. Although the cost may be higher, individuals are usually allowed to use out-of-network providers for care.
Even when insurance does cover treatment for alcohol abuse and/or dependency, there are some important things to understand about out-of-pocket costs. Insurance plans usually have a deductible, for example, which is an annual amount that individuals are required to reach before coverage kicks in. Some plans may cover treatment services 100 percent after the deductible is reached, while others may only cover a percentage of the cost, requiring individuals to pay the remaining percentage. There are generally annual out-of-pocket maximum expenditures for both families and individuals. Once these maximums are reached, insurance companies then cover the remaining expenses.
There may also be copays required at the time of service that individuals are expected to pay each time a service is rendered, and these can differ depending on the service provided. For example, office visits may have a $20 copay, while emergency services have a $50 copay. The deductible and out-of-pocket maximum costs are usually directly related to how much a person pays in monthly premiums. Typically, lower monthly premiums equate to higher deductibles and higher out-of-pocket maximum expenses.
Using Insurance for Alcohol Abuse Treatment
Insurance policies are usually offered by an employer, through the state or federal government, or people may choose to obtain their own policy independently. Each policy is different and may have variable coverage options, rules surrounding coverage, and methods for using the coverage on specific services.
As coverage and insurance policies can vary depending on a person’s state of residence, the individual state department of behavioral and/or mental health services, often a division of DSHS (Department of Social and Health Services), can provide more information on local coverage options and how to use them. Also, substance abuse treatment providers are well-versed in helping families and individuals to understand how to use insurance to pay for alcohol treatment and can provide professional knowledge and advice on how to do so.
Insurance coverage may cover all or part of a person’s alcohol treatment program. In some cases, the plan will offer coverage for some of the services but not all. Individuals can then choose to pay for these non-covered services themselves. In some cases, individuals may decide not to use insurance to pay for substance abuse services, and instead opt for a private-pay option. Treatment providers may have payment plans or other payment options available. Individual treatment facilities can often serve as a liaison with insurance companies to help prospective clients determine their exact level of coverage.