Paying for Treatment

 

 
When thinking about paying for rehab, individuals may find themselves taking a refresher course in the ABCs of insurance. An informative starting place is to consider the sources of funding for drug treatment recovery, which include:

• Employment-based plans
• Private insurance (other than an employee plan)
• Medicare
• Medicaid
• State insurance (other than Medicaid/Medicare)
• Out-of-pocket payments

To provide some insight into how individuals pay for recovery, consider the findings of the 2013 Health Insurance Coverage of the Total Population. The survey, by state, revealed participation levels in different forms of healthcare coverage. A review of this information, taking California as a sample state, opens a window into how Californians would likely pay for rehab. In California:

• 45 percent of residents have employer-sponsored plans
• 7 percent have private insurance other than employment-based plans
• 19 percent have Medicaid
• 12 percent have Medicare
• 2 percent have public insurance other than Medicaid
• 15 percent are uninsured

Individuals who have insurance can work directly with a rehab center to get an authorization of coverage in advance of admission. However, it is important to note that claims coverage is a detailed process, and the best practice may be to contact the insurance carrier directly to learn which services will be covered as well as the amounts of copays, deductibles, and any cost-sharing involved.

Insurance claims coverage is governed by a document called the Summary Plan Description (SPD). The SPD is essentially a contract between the insurance carrier and the insured individual. The insurance carrier promises to provide the delineated services, and the insured provides legal consideration in the form of premium payments. An implicit term of this contract is that neither party defrauds the other. It is helpful for individuals who are considering entering rehab to review their SPD or request a copy from the insurance company if they need one.

 

 
Researchers and clinicians now treat substance abuse as a disease, which is helpful from an insurance perspective. The inclusion of “substance use disorder” in the Diagnostic and Statistical Manual of Mental Disorders–5 (DSM-V) ensures that insurance companies see treatment as medically necessary and will pay claims. The passage of the Affordable Care Act (ACA), known colloquially as Obamacare, which was passed in March 2010, is also a great help to the field of addiction treatment.

The ACA is considered a triumph in terms of helping Americans to get healthcare insurance. The United States Department of Health and Human Services reports that since ACA went into law, 16.4 million Americans who were formerly uninsured are now insured.

Having coverage means more Americans who need rehab treatment may actually seek it. Further, the ACA reflects the government’s policy aim to ensure that treatment coverage for substance abuse is on par with treatment for other diseases. The White House has publicly stated that ACA treats substance abuse (called substance use disorders) as one of the 10 key elements of essential healthcare benefits in the US. This designation ensures that all ACA healthcare plans, Medicaid (in California, this program is known as Medi-Cal) plans, and Medicare plans include coverage for substance abuse treatment.

The implementation of ACA included the government developing a “Marketplace” in which individuals could shop for different insurance plans. Individuals who are seeking insurance can shop in the Marketplace by themselves or get help from a trained “navigator.”

All ACA plans that are purchased on the marketplace are guaranteed to include coverage for rehab services. It is, however, still necessary to contact the insurance carrier to learn the specific details of claim coverage. An additional benefit of ACA plans is that certain qualifying individuals may receive a partial government subsidy to help cover the monthly cost of the premiums. Further, eligible individuals may receive a tax credit for the money they paid for their premiums.

 

 
Another important dimension of the Marketplace is that qualifying low-income individuals may apply for Medicaid. A navigator can help with this process. Under ACA, Medicaid and Medicare coverage for substance abuse has been expanded. The State Profiles of Mental Health and Substance Abuse Services in Medicaid notes that Medicaid-covered rehab services must, at a minimum, include:

• Doctor services
• Inpatient and outpatient hospital services
• Services at federally qualified healthcare centers
• Care at rural health centers

Under the ACA, the following services are considered optional from state to state, though a state must provide at least one of the following services:

• Rehab treatment
• Community-based services
• Case management
• At-home services
• Non-physician treatment, such as with a Certified Alcohol and Substance Abuse Counselor (CASAC) or psychologist
• Inpatient hospital services for individuals under 22 years of age

Even if individuals do not apply for Medicaid in advance of entering rehab, they may be able to do so after having an intake interview with a state-funded program. A program that is government-run may help a qualifying prospective client to apply for Medicaid.

In the case of individuals who are concerned about an uninsured adult’s substance abuse, having information about finding a private ACA plan or Medicaid can be especially helpful. While the individual will have to apply directly for coverage, a concerned person who has the required information can help guide the person seeking recovery through the application process.

 

 
Payment for rehab from one’s personal financial resources can occur in whole or in part. A person may have to pay out-of-pocket if there is a gap between what rehab costs and what insurance covers. In other instances, individuals will pay out of pocket for any number of reasons, such as being uninsured, not wanting to use existing insurance, or paying for rehab on behalf of another person. Individuals in any one of these circumstances may have different options for when and how they pay for services.

Whether a person will need to pay the difference between coverage and costs or is entirely paying out of pocket, the following advice can be helpful:

• Some rehab centers offer sliding scale services, payment plans, or will even waive certain fees for eligible clients.
• The insurance provider may have information about local rehab centers that have a history of working with the insurance company’s clients.
• Private borrowing is an option for individuals with the required level of creditworthiness.
• Borrowing against a retirement plan can be a low-cost alternative to a private loan.
• Personal loans from family or other trusted individuals may be an option.
• Using credit cards is typically the costliest approach but may be necessary as a last resort.

Another option is to try to identify ways to reduce the cost of rehab. For instance, if a residential program is selected, opting for the least costly living accommodation, such as a shared room versus a single room, can bring down the bill. It can also help to opt out of any nonessential services that the rehab may offer. A rehab center should be able to provide information on the services that are optional and therefore not entirely essential.

If a rehab center is aware of cost concerns, it will be better positioned to work with an incoming client and family members who are involved in the admissions process. Staff members at many rehab centers have experience helping individuals minimize certain costs without compromising treatment.