Paying for Drug Rehab – Insurance Coverage For Treatment
Once you or your loved one decides to get help, the immediate questions you’ll face include where to get treatment and how to pay for it or does my insurance cover drug rehab? The following information can help you understand health insurance coverage for drug rehab and some important laws that impact coverage. Understanding your coverage can help you to get the best care possible and all of the benefits that you are entitled to receive. Our counselors can help you locate a drug rehab that will work with your insurance to help find a quality treatment program accessible and available to your loved one. Call today to learn more about your insurance coverage for drug addiction treatment.
To understand how health insurance works when paying for drug rehab, it’s helpful to first understand federal and state parity laws.
Federal Parity Law
In the past, most health plans have provided more limited coverage for substance abuse (if any) than for other medical conditions. On Oct. 3, 2008, President Bush signed into law the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008. (We’ll call it the “Parity” Act for short.) This new federal law became effective for most plans on January 1, 2010.
The Parity Act requires large employer (companies with more than 50 employees) group health plans that offer coverage (benefits) for mental illness and alcohol and drug rehabilitation to provide those benefits in a way that is no more restrictive than coverage for other medical and surgical care. The Parity Act does not require group health plans to cover mental health and substance use treatment. But, when these plans do cover this treatment, they must do so with “parity”— in a way that is equal to the way benefits for medical and surgical care are doled out.
The intent of the law is to recognize (show an understanding of) the close relationship between mental health and overall health, and to make sure that more people get the treatment they need to overcome addiction.
Keep in mind, the Parity Act does not apply to small employers — those with fewer than 51 employees, and it doesn’t apply to individual plans — plans you don’t get through an employer, but go out and buy directly from an insurer yourself. The Parity Act also doesn’t apply to Medicare and Medicaid, but sometimes there are exceptions depending on how these plans are administered (handled).
State Parity Laws
Many states had already passed similar laws, so most larger employers were already paying benefits for drug and alcohol treatment in less restrictive ways than for medical and surgical care. However, certain employers with “self-insured” medical plans — companies that pay benefits with their own money rather than with the insurer’s money — don’t have to follow most state-mandated laws, but they are required to comply with the Parity Act. Still, a self-funded employer could choose not to cover substance abuse at all, and then it wouldn’t have to comply with either federal or state law. Overall, 96 percent of employers say they provide coverage for substance use treatment (and mental health).
When the plan is bound by both the (federal) Parity Act and a state parity law, the one that provides the greater benefit applies.
Health Insurance When Paying for Drug Rehab
Due to federal and state parity laws and other factors, health insurance coverage for drug rehabilitation varies widely. Your coverage will depend on a number of factors, including whether the Parity Act applies to your plan, what state you live in, and what types of benefits are offered by your plan.
Even when you have coverage, you still need to pay close attention to what that coverage is and how the insurer will manage your case. Whether you have Blue Cross and Blue Shield, Aetna, Cigna, United Health Care, Tufts, Kaiser, Humana, Northwest Medicare, Medicaid, or another plan, there are 10 questions you should ask your plan’s customer service representative to help make sure you get the best, most affordable care.
Ten questions you should ask your plan’s customer service representative
- Does my plan provide coverage for treatment of drug abuse: It’s important to understand the federal Parity Act, but most people don’t know whether an employer is a self-funded group plan, or how their state laws handle benefits for substance abuse treatment. Your plan’s customer service representative will be able to tell you exactly what your benefits are. Sometimes benefits for drug rehab are handled by a “managed behavioral health organization (MBHO).” If that’s the case, your insurer should let you know the name of the company and how to contact them. Then you will deal with the MBHO, rather than your insurer.
- Do I need a referral from my doctor: You’ll want to find this out before drug treatment, since in some cases, benefits can be reduced or denied if you don’t get required referrals. If you got emergency treatment without time for a required referral, call your insurer as soon as possible and explain, and then follow their instructions.
- Is my diagnosis covered: Your health insurer will consider whether they believe your condition is “medically necessary.” Some plans may not cover repeat care if you didn’t follow through with your last course of treatment. Other times, they may cover your care, but not to the extent you would like. For instance, they may say that for your diagnosis, only outpatient treatment is covered. In addition, your insurer will consider if there is any reason that your treatment would fall under a general exclusion of the plan. This would be the case if you have coverage through your employer, but your addiction is caused by active service in the military. Another exclusion may apply if your treatment was court-ordered.
- What type of plan do I have: Some common plan types include:
- Preferred provider organizations (PPO) – With a PPO plan, you can choose a covered provider (as long as they meet the plan’s definition of a covered provider). However, you get a greater benefit if you go to “in-network” providers, rather than “out-of-network” providers.
- Managed care plan – With a managed care plan, you must go to an in-network provider to receive coverage.
- Consumer-driven health plan – These plans are usually a PPO hybrid, and have very large deductibles (thousands of dollars). Usually once the deductible is met, all covered services are paid at 100 percent.
- Is there a difference in coverage between in-network and out-of-network care and if so, what is it: It’s common for plans to pay a higher benefit for in-network care. For example, a plan may pay, say, 100 percent of the covered cost for an in-network provider, but perhaps only 70 percent of the cost of an out-of-network provider. So it’s important to know what you’re getting into if you choose a non-network provider.
- Is there a deductible: The deductible is the yearly amount you must pay before the plan will start paying benefits. In some instances, the deductible is waived, like for preventive care or sometimes for inpatient care. Under some plans, any amount applied toward your deductible in the last three months of the calendar year is carried over to help meet your deductible during the next year.
- Will there be copayments: Copayments are like mini-deductibles. They apply to individual services, like office visits, prescription drugs, and others, and they usually do not apply toward your deductible. It’s important to understand how much your copayments are and what they apply to. If you will be having outpatient care, you may have to pay a copayment for each treatment day, and copayments are usually due on the date of service.
- What is my out-of-pocket (coinsurance) limit: If you pay a percentage toward your medical services, like 30 percent after 70 percent coverage or the 20 percent after 80 percent coverage, those amounts you pay go toward your yearly out-of-pocket limit. Once that limit is met, your remaining covered health expenses for the year are paid at 100 percent. If your rehabilitation is covered, your insurer will pay the provider directly, but you will be billed for out-of-pocket expenses.
- Are there any restrictions on where I can get help: Besides considering “in-network” providers, your plan will likely only cover certain drug rehab facilities. You’ll want to ensure you find out up front, so that you can choose the most effective, and affordable drug rehab center.
- How will my care be reviewed while I’m in treatment and how will any reviews impact my coverage and treatment? If you will be having inpatient or residential treatment, it’s important to know that your care will be monitored, likely by the insurer’s nurse case manager. As you make progress, your insurer will want to be certain that the level of your addiction treatment matches the severity of your condition. And they will decide this based on “concurrent” and other reviews.
“Nonquantitative” Treatment Limitations
Pay attention to how your plan handles what has been called “nonquantitative treatment limitations” (NTQLs). Because remember, if you have coverage, unless your plan is excempt from parity laws, your coverage for drug abuse rehabilitation should be comparable to coverage for medical and surgical care.
NQTLs are plan features that are not expressed numerically (with numbers) but in other ways that can limit your benefits. These come into play with substance abuse treatment because they apply to medical and surgical care. Some NQTLs include:
- Medical management that bases decisions about coverage on medical necessity or on the medical appropriateness of your care or based on whether a treatment is experimental or investigative
- The list of prescription drugs that your insurer covers
- Provider coverage and reimbursement rates
- Methods used to decide the “usual and customary amount” or negotiated fee” that is covered for each service provided
- The refusal to pay for higher-cost therapies until it can be shown that a lower-cost therapy is not effective
- Exclusions based on failure to complete a course of treatment
Since some patients and caregivers have argued that NQTLs have not been used fairly with substance abuse treatment as compared with medical and surgical are, advocates (people who support) parity laws are watching this closely. That’s why it’s important for you to file an appeal to your health insurer if you feel your coverage is not handled fairly in light of parity laws. Research shows that 50 percent of individuals who file appeals are successful.
What to Do If You Don’t have Insurance Coverage When Paying for Drug Rehab
People without coverage for substance use treatment can check with their county’s mental health department, the Salvation Army, or Goodwill Programs. You may also be able to negotiate the cost of your care directly with the drug treatment facility.
As part of the Affordable Care Act, drug rehab will be required beginning in 2014 as part of essential benefits. This should help increase benefits for those who don’t have coverage and for those who are “under-covered.”