Insurance for addiction treatment
Insurance for addiction treatment refers to the coverage provided by health insurers for various healthcare services aimed at individuals struggling with substance use disorders. This coverage can include inpatient and outpatient care, counseling, and other essential services necessary for recovery. Historically, addiction treatment was not widely covered by health insurance until legislation such as the Mental Health Parity and Addiction Equity Act (MHPAE) was enacted in 2008, mandating that mental health and addiction services be covered at levels comparable to physical health treatments. Despite this progress, significant gaps remain, with many individuals still facing barriers to accessing necessary care due to factors such as limited provider networks, complex reimbursement criteria, and the need for referrals.
The Affordable Care Act (ACA) further expanded insurance coverage for addiction treatment, particularly for Medicaid recipients, although coverage can vary significantly by state. Individuals seeking treatment may encounter challenges such as high out-of-pocket costs, strict eligibility requirements, and denial of claims, which can deter them from pursuing help. Moreover, the nature of addiction often complicates access to treatment, as denial and relapse are common issues that can impede recovery efforts. Overall, while insurance for addiction treatment has improved in recent years, many individuals remain unaware of their coverage options or face obstacles that limit their ability to receive appropriate care.
Insurance for addiction treatment
DEFINITION: Insurance is payment for healthcare services by a third-party payer. Health insurance includes private insurance provided by an employer and Medicare, Medicaid, military health insurance, and individual health insurance. Some health insurance also covers inpatient, outpatient, physician, and counselor care for persons with addictions.
History
Although experts have known for some time that rehabilitation treatment is important for sustained addiction recovery, not until 2008 did health insurers, on a wider scale, begin to cover addiction treatment. Typically, health insurers contract with healthcare facilities and providers to obtain a discounted reimbursement rate.
Mental health and addiction treatment facilities and providers have been reluctant to contract with healthcare insurers because they did not want to accept the reduced reimbursement and because many of their patients did not have health insurance covering mental health and addiction treatment. Less than 70 percent of addiction treatment facilities were contracted with public and private insurers. Health insurers, when they did cover addiction services, only covered detoxification. They provided little or nothing for rehabilitation services for individuals with substance use disorders.
A few US states mandated that health insurers cover addiction treatment. Other states required that health insurers include options for addiction treatment but did not mandate this form of coverage; still, other states did not require coverage at all for addiction services. There were exceptions, however. Self-insured employers opted not to cover addiction services, and employers covered by the Employment Retirement Income Security Act of 1974 (ERISA) were exempt from these state requirements.
ERISA is a federal law that sets minimum standards for pensions and healthcare insurance in private industry, but it does not require pension plans or healthcare insurance. Many individuals with substance addictions were not employed and had no health insurance. This left addiction treatment facilities and providers without any assurance of payment. As a result, addiction treatment facilities and providers frequently required that persons pay in advance for their treatment.
Mental Health and Addiction Coverage
In 2008, after years of lobbying by mental health advocates, the Mental Health Parity and Addiction Equity Act (MHPAE) was signed into law in the United States. This federal legislation required that health insurance policies with coverage for mental health and substance abuse treatment include coverage at the same level as that for physical treatment. This means that co-payments, co-insurance, out-of-pocket expenses, office visits and days-of-service limitations, and in-network and out-of-network benefits must be comparable to those for care for physical ailments. In addition, this law required equal mental health and substance abuse treatment coverage for self-funded health plans and for ERISA employers’ health plans; exclusions were no longer permitted. However, MHPAE has a large loophole: Health insurers and employers were not required to offer any mental health and addiction coverage.
Upon enactment of MHPAE, the greatest concern among businesses was that the act would increase the cost of health insurance. Few studies have been performed to determine whether this concern is valid. One study utilizing data from federal employees’ health plans has been performed to evaluate this change. Federal employees were granted mental health parity in 2001. The study used claims data from 1999 through 2002. The mental health costs before parity were compared with those after parity. The study found little increase in the utilization and costs of mental health and addiction treatment. However, out-of-pocket costs for members were lowered significantly.
Another flaw in the mental health parity law is the way that health insurers validate and pay for coverage. Often, they have special criteria for claims reimbursement that interfere with payments. For example, a health insurer might require that the mental health or substance abuse patient receive outpatient care before inpatient care. Only if the outpatient treatment fails can the person be admitted for care. Also, visits to a psychiatrist or a counselor are often limited in number by calendar year.
On March 10, 2010, President Barack Obama signed his signature healthcare reform legislation, the Patient Protection and Affordable Care Act (ACA), also known as Obamacare or simply the Affordable Care Act, into law. Supporters of the ACA anticipated that it would provide insurance coverage via Medicaid expansion and state health insurance exchanges to 5 million previously uninsured Americans with addiction and mental health disorders starting in 2014. With the exception of health insurance plans purchased before March 23, 2010, the ACA covers ten essential health benefits, including mental health services and addiction treatments like counseling, psychotherapy, behavioral health inpatient services, and substance use disorder treatment. The ACA extends MHPAE and prevents addiction and mental health patients from being denied coverage or charged more for receiving such treatments. It also prevents essential health benefits from being subject to annual or lifetime coverage expense limits and mandates that insurers provide patients with coverage for pre-existing health conditions. Patients are responsible for cost-sharing with their insurers, however, and these costs vary by insurance plan and the program or treatment chosen. Many insurance providers require individuals seeking mental health treatment or seeking to attend a rehabilitation or detoxification center first to attain a referral from their primary care doctor.
Approximately 12 percent of adults who receive Medicaid have a substance use disorder, making ACA's extension of Medicaid to include substance abuse treatment critical. Medicare recipients must receive a referral from their provider, follow a care plan designed by their provider, and attend an approved, in-network facility to receive substance use disorder treatment. However, there is substantial variation between states in terms of addiction treatment options through Medicaid. For example, in some states, Medicaid does not cover methadone (Dolophine and Methadose), a drug used to treat opioid use disorder. Other medications like buprenorphine, which also treats opioid addictions, require prior authorization for each administration in in-patient facilities. In many states, residential or intensive outpatient treatment coverage is not available through the program, leaving only outpatient treatment, which may not be the right solution for every individual with substance use disorder.
Issues
Even with parity for mental health and addiction treatment, additional reimbursement issues arise. Historically, most individuals with substance use disorders had no health insurance because they were unemployed or they had a job that did not provide health insurance. Though this issue was addressed with the ACA and healthcare access improved, many individuals remained confused by the process or did not realize addiction treatment may be covered. Also, denial is a common symptom of substance abuse. It can be difficult to get the patient to accept their problem and to go for treatment, even if they have health insurance.
Additionally, most individuals with addictions often have relapses during and after detox and rehabilitation. Costs for addiction treatment are controlled through limited admissions for treatment, resulting in limited treatment for relapses. Also, many addiction treatment programs, both outpatient and inpatient, have patient rules. For example, patients cannot take any drugs while they are in the program. They are tested weekly for the presence of drugs in their urine. If they violate this rule, they can be discharged from the addiction treatment program, even if they have health insurance. While this rule may be reasonable in supporting the center's mission, it puts individuals struggling with their sobriety at a disadvantage and limits their chances of success.
Insurers may require that substance abusers use in-network (contracted) providers. Often, only a few such facilities and providers exist in a given network, and there may be a waiting period for treatment. Many programs use dialectical behavioral therapy (DBT), group therapy, or cognitive-behavioral therapy (CBT), but programs using CBT are more likely to accept health insurance for payment. If a patient does not respond well to this type of therapy, their health insurance is of little use to them.
Bibliography
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