Around one out of every 12 adults in the United States struggles with alcohol addiction, the National Council on Alcoholism and Drug Dependence (NCADD) publishes. Alcoholism is a treatable disease. Via rehabilitation, individuals can learn tools and strategies to minimize relapse, cope with stress in a healthier manner, and enhance their overall physical and emotional health and wellness.
Alcohol treatment programs are generally either publicly or privately funded. Public alcohol rehab programs accept everyone even if they don't have health insurance or can't afford it; however, these programs are often full with waiting lists. They also may not be as comprehensive or offer quite as many options, specialty services, or amenities as private alcohol treatment programs.
Cost may seem like a barrier to treatment; however, the long-term benefits of rehabilitation outweigh the initial financial burden. The National Institute on Drug Abuse (NIDA) reports that addiction treatment may have a return on investment (ROI) and cost savings ratio as high as $12 for every $1 spent when you take into account the costs of healthcare, lost workplace production, and legal and criminal expenses that are often associated with addiction.
Alcohol rehabilitation is therefore well worth the expense. Thankfully, there are many ways to finance treatment.
Using Health Insurance to Help Pay for Rehab
One of the optimal methods of paying for alcohol rehabilitation is by using medical health insurance. Many policies will cover at least a portion of addiction treatment programs, as the Affordable Care Act (ACA) lists addiction as one of the 10 essential health benefits that are required to be covered similarly to other medical and surgical needs. Since addiction is classified as a chronic condition and brain disease, as published by the American Society of Addiction Medicine (ASAM), it is required to be treated like other chronic conditions and diseases. This is called parity and means that mental healthcare, including treatment for substance abuse and addiction, is required to be covered the same as other services under all health plans sold on the federal Marketplace.
Every individual policy and insurance company may have variations in what exactly is covered. Coverage can vary from state to state as well. The best way to know exactly what is covered and how to use insurance to pay for rehab is to check with the specific insurance company regarding the particular policy that is held. Treatment facilities also have trained staff members on hand to help families navigate how to best use their insurance coverage.
In general, the process of using insurance for rehab depends on the type of policy and coverage a person carries. For example, a PPO (preferred provider organization) plan will typically allow a member to seek treatment services from any provider regardless of whether or not they are "in network." An in-network provider is a treatment provider that contracts with insurance companies in order to offer discounted services. When using an in-network provider, people with PPO plans will pay less than if they use a provider that is out of network.
HMO (health maintenance organization) plans, on the other hand, typically require members to remain in network for treatment services in order for coverage to kick in. With a PPO plan, a member may not need to receive a referral for specialty services, such as rehab; however, with an HMO plan, members often need to obtain a referral from their primary care provider first. Alcohol rehabilitation services may need to be deemed "medically necessary" in order for them to be covered by insurance, and only certain services may be covered.
Individuals may also have a health savings account (HSA) that they (and potentially their employer) put money into to use for healthcare expenses. HSAs are tax-exempt, and these funds may be used to pay for rehab. Examples of addiction treatment services that may be covered by insurance include:
- Detox and/or medical detox
- Medication management
- Outpatient services
- Residential treatment
- Intensive outpatient programs (IOPs)
- Treatment for co-occurring disorders
- Counseling and therapy sessions
- Transitional services
- Follow-up care and recovery services
In order to be eligible to use health insurance coverage to pay for rehab, individuals will need to be in good standing with their insurance company, meaning that they are current on their payment of monthly premiums. Most plans offer coverage at a percentage after a set deductible is reached. For example, a health insurance policy may cover services at 80 percent after a person has paid $500 out of pocket. This means that the individual will need to cover the additional 20 percent of the fees incurred. Generally, there is also an annual out-of-pocket maximum amount, and after that amount is reached, insurance policies will usually cover remaining services at 100 percent. In some cases, individuals will need to pay for treatment up front and then ask for reimbursement from the insurance company for covered services.
Some insurance policies may ask that a member enter an outpatient treatment program first and "fail" before authorizing coverage for a residential treatment program. Others may place limits on the number of covered sessions per calendar year or how long a person may remain in a treatment program. NIDA recommends that people remain in an addiction treatment program for at least 90 days, whether it be an outpatient or residential treatment program. Individuals should always check their insurance policies in order to determine what, if any, types of rehabilitation services are covered and how to go about using the coverage to pay for services.
Other Options for Financing Alcohol Treatment Programs
Not all insurance policies will cover all necessary treatment services, and some rehabilitation programs may be self-pay, meaning that they may not accept insurance as a form of payment. There are several other ways to finance treatment programs other than insurance, such as private loans and payment plans.
Many treatment programs and rehab facilities are able to work with families to set up payment plans that work within a family's budget to make payments manageable. These payment plans are generally set up before admission into a treatment program, and individuals are responsible for making payments in a timely fashion, often through automatic monthly payments or via a graduated payment plan. Treatment facilities may even offer a "sliding scale" for payment, allowing people to pay what they are able to for services.
Families can also decide to take money out of savings or borrow from a retirement account in order to pay for rehabilitation. Friends and loved ones can be a source to borrow money from as well. Some people opt to use crowd sourcing services or sell off personal items in order to raise money for treatment services. Credit cards are an option for payment as well; however, individuals should only resort to this if they will be able to get out from under the debt quickly and with minimal interest building up.
Another option is to take out a loan to help pay for rehab, either a private loan or a home equity loan. Home equity loans use your home as collateral for the loan, so these are typically considered low-risk and may therefore have competitive and favorable interest rates. Private loans may be offered by loan companies that cater specifically to those seeking finance for addiction treatment. These companies often offer affordable rates that take into account treatment needs and timelines. People can also take out a personal loan that is taken from a bank directly and based on credit history and assets.
Treatment coordinators at alcohol rehabilitation facilities can help families and prospective clients decide on how best to finance their treatment services.