Will Insurance Cover Alcohol and Drug Rehab?

The American Medical Association classified alcoholism as a disease in 1956, but it took until 1987 for drug addiction to receive that same classification. Both diseases are now clinically known as substance use disorders (SUD).

The 2019 National Survey on Drug Use and Health by the Substance Abuse and Mental Health Services Administration (SAMHSA) provides the most recent statistics on substance use disorders in the country. The survey found over 20 million Americans age 12 or over had a SUD in the surveyed year. Of those, only a fraction received the needed treatment.

Even after the AMA classified drug and alcohol addictions as diseases, insurance companies commonly denied coverage based on “pre-existing condition” or not “medically necessary.” Often, that meant drug and alcohol addictions went untreated.

Fortunately, enactment of the Mental Health Parity and Addiction Equity Act (MHPAEA) in 2008, and the Patient Protection and Affordable Care Act (ACA) in 2010, has required insurance companies to change coverage parameters for alcohol and drug abuse treatment and to cease discriminatory practices in mental health and addiction health coverage.

The combination of these two acts has allowed many more Americans to afford health insurance coverage and has required insurance companies to change coverage parameters for mental health and substance use disorder treatment.

How the MHPAEA Impacts Insurance Coverage

The Mental Health Parity Act (MHPA), enacted in 1996, required mental health benefits to be equal to medical and surgical benefits in terms of cost-sharing, number of visits, and medical necessity requirements. However, the parity requirement did not apply to small businesses and individual plans.

In 2008, the MHPAEA sought to close some loopholes in the earlier parity act. The new legislation prevented insurance companies from denying coverage based on a pre-existing condition, including the disease of alcohol or substance abuse. The act also required parity for all insured individuals in deductible and copay charges, and in annual visit and geographic limits. However, it did not change individual and small business exemptions.

How the ACA Impacts Insurance Coverage

In 2013, the federal government expanded the MHPAEA, requiring insurance companies to provide the same level of care for mental health issues as they provide for physical health issues.

Before the passage of the MHPAEA and the Patient Protection and Affordable Care Act (ACA), about 49 million Americans were uninsured. The ACA sought to ensure more Americans had access to affordable health insurance coverage, to expand coverage guidelines, eliminate coverage denial based on a pre-existing condition like substance use disorder, remove spending limits, and provide parity protection.

Regarding mental health and substance abuse treatment coverage, HealthCare.gov explains insurance plans must cover the following.

• Behavioral health treatment, such as psychotherapy and counseling
• Mental and behavioral health inpatient services
• Substance use disorder (commonly known as substance abuse) treatment.

The ACA now requires most individual and small group health plans to cover mental health and substance use disorder services. Insurance plans must provide coverage for ten essential health benefits categories, which include mental health and substance use disorder services.

Covered addiction treatment services include:

• Inpatient detox, including medications
• Partial hospitalization
• Residential rehab in an approved facility
• Outpatient detox
• Outpatient rehab
• Treatment of co-occurring mental health disorders
• Follow-up counseling
• Maintenance medication

As a covered benefit, addiction treatment coverage must be equal to that provided for other medical conditions.

The most common healthcare plans are Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO).

With an HMO plan, you choose a primary care physician to attend to most of your medical needs. If you need to see a specialist, your primary care doctor will give you a referral. HMOs may have lower premiums or deductibles than PPOs.

A PPO plan may have a higher deductible but allows you to see healthcare providers in and out of network without a primary care physician referral.

If your insurance is limited or you do not have insurance, financial assistance for substance abuse treatment services may be available.

• Substance Abuse and Mental Health Block Grants fund treatment and support services for individuals without insurance or for whom coverage is terminated for short periods of time.

• State-funded substance abuse programs and state-funded detox addiction treatment programs.

• U.S. Department of Veterans Affairs.

What If My Plan Is Not Adhering to SUD Coverage and Parity Requirements?

If you believe your insurance carrier has violated ACA and MHPAEA requirements because they denied you coverage for addiction treatment services or they are charging you a large copay or deductible, you have several options.

See the following resources to learn more about the ACA and MHPAEA, and to ensure you are not being improperly denied services.

• Your insurance company must provide you with an easy to understand one-page summary of benefits, therapies, and fees, and should have also provided you with a comprehensive handbook outlining your benefits. Review this information carefully.

• Request help from the CMS.gov Consumer Assistance Program.

• SAMHSA on-line publication, Know Your Rights: Parity for Mental Health and Substance Use Disorder Benefits.

• SAMHSA on-line publication, Parity of Mental Health and Substance Use Benefits with Other Benefits: Using Your Employer-Sponsored Health Plan to Cover Services.

• SAMHSA on-line publication, Consumer Guide to Disclosure Rights: Making The Most Of Your Mental Health and Substance Use Disorder Benefits.

Midwest Recovery Centers

At Midwest Recovery Centers, our compassionate staff specializes in treating prescription or illegal drug dependence, alcohol dependence, co-occurring disorders, and other addictive behaviors while also providing education through a monthly support meeting for the families of those struggling.

We use an extended care treatment model that provides a safe, transformative, client-centered, and cost-effective recovery process from alcohol and drug use. Grounded in a successful 12-step model, we offer individual, group, and family support and other proven therapeutic approaches.

Contact Midwest Recovery Centers today to start your recovery.

Reviewed and Assessed by
Taylor Brown, B.A.Com., MAADC II
Tim Coleman, M. of Ed.