Navigating Insurance for Addiction Treatment

This monthly series focuses on addiction treatment: making the choice to begin, finding a facility that meets your needs, and more.

In recent years, the public perception of mental health and substance use disorders has come a long way. More and more, we are recognizing that these conditions are medical illnesses, not moral failings. And as such, expanding and protecting access to high-quality treatment has become necessary.

In 2008, The Mental Health Parity and Addiction Act was passed. In a nutshell, this legislation placed mental health and substance use insurance benefits on equal footing with surgical or medical coverages. Although the act does not obligate an insurance provider to cover these disorders, if their offered plans do extend such coverages, they are prohibited from limiting benefits in ways they do not for physical medicine. (There are exceptions, but they are few and far between.) This measure, along with the Affordable Care Act (ACA) (also known as Obamacare) signed into law in 2010, makes it near impossible today to find a marketplace insurance plan that does not cover mental health and addiction treatment in some capacity.

That being said, costs and levels of care covered vary widely. It is important to understand the nuances of your specific plan as you decide on a treatment provider for yourself or a loved one. Choosing the center that works for you can be confusing, and understanding how your care will be paid for is an important element of the process.

Health insurance benefits fall into 6 basic classifications:

• Inpatient, in-network
• Inpatient, out-of-network
• Outpatient, in-network
• Outpatient, out-of-network
• Emergency care
• Prescription drugs

If your plan offers coverage within these categories for physical health needs, they must concurrently be offering these benefits for those seeking treatment for addiction. There are, however, types of insurance plans that just plain do not cover some of these categories. For example, there are plans that do not offer out-of-network coverage under almost any circumstances. If that is true of your plan and the treatment facility you have chosen is out-of-network for your specific insurance provider, it is usually not the right option for you. 

There can be other details that require clarification as well. Do you need a referral from a doctor? What level of care do you or your loved one require? Is inpatient withdrawal management (otherwise known as detox) needed? And so on. 

Let’s take a quick look at the key types of insurance plans typically available in the marketplace. Which type of plan do you have?

• Exclusive Provider Organization (EPO): A managed care plan where services are covered only if you use doctors, specialists, or hospitals in the plan’s network (except in an emergency).
• Health Maintenance Organization (HMO): A type of health insurance plan that usually limits coverage to care from doctors who work for or contract with the HMO. It generally won't cover out-of-network care other than in an emergency. An HMO may require you to live or work in its service area to be eligible for coverage. They often provide integrated care and focus on prevention and wellness.
• Point of Service (POS): A type of plan where you pay less if you use doctors, hospitals, and other health care providers that belong to the plan’s network. POS plans require you to get a referral from your primary care doctor in order to see a specialist.
• Preferred Provider Organization (PPO): A type of health plan where you pay less if you use providers in the plan’s network. You can use doctors, hospitals, and providers outside of the network without a referral for an additional cost.
• Medicare: A federal health insurance program for people who are 65 or older, plus certain younger people with disabilities.
• Medicaid: A health care program that assists low-income families or individuals in paying for doctor visits, hospital stays, long-term medical and custodial care costs, and more. Medicaid is a joint program, funded primarily by the federal government and run at the state level. Coverages may vary depending on your place of residence.

Before you begin looking for addiction treatment, make sure you understand what your insurance plan will cover. Knowing your type of plan is a great start, but I also recommend making a phone call to your insurance provider to discuss further. As I’m sure you know, navigating health insurance coverage for any type of illness can be complex, and even frustrating. Addiction treatment is no exception. So don’t be shy: Ask for help and guidance.

After you’ve spoken with someone at your health insurer, you’ll also need to speak directly with the treatment providers you are considering. Most treatment providers will have a specialist on staff that can help walk you through the process and iron out any issues that you may encounter. Utilize their expertise!

As someone begins the process of recovery, the primary focus needs to be on treating the disease. Worrying about the paperwork and costs is an extra burden. But by doing your best to understand the options and coverage available to you, you can help reduce some of this burden and focus on what really matters: Getting well.

Roy Viger is the Executive Director for Avenues Recovery Center, and is responsible for business oversight for all Avenues Louisiana facilities. He is deeply committed to the field of addiction, the patients and families we serve, and proud to work with a talented and hardworking staff. Roy has a Bachelor’s degree in accounting from Southeastern Louisiana University and is distinguished as a certified public accountant.