Navigating your health insurance is challenging under any circumstance—and trying to assess your options when it comes to treating a substance use disorder is no exception. The law (under the Affordable Care Act and the Parity Law) now requires that insurance plans cover mental health and substance use issues the same way they cover medical treatments like chemotherapy or surgery, but the treatment must be considered medically necessary.1
According to Healthcare.gov, a website managed by the US Centers for Medicare & Medicaid Services, medically necessary is defined as “health care services or supplies needed to diagnose and treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of care.”2 Every insurance plan must meet the requirements of the law, but each company interprets “medically necessary” individually to provide different coverage, and copayments and deductibles may apply.
Working with Insurance
To find out exactly what your insurance company covers, call the number on the back of your Member ID card. Be sure to have your policy, member, or group ID number available.
Keep records of your conversation. Ask the name and ID number of the representative with whom you speak, and write down the date and time of the call. Many insurance companies will notify you that your call is being recorded, but you may not have access to that recording, so be sure to take your own detailed notes about the information you receive.
During your call, ask specific questions about the kind of coverage that’s available for substance use disorder treatment, such as:
- Are referrals or approval required before you enter treatment?
- Which treatment centers are in-network and which are out-of-network?
- Which specific treatment options are available under your policy? Will your policy cover the assessment? Detox? Inpatient or outpatient facilities?
- What percentage of treatment will be covered?
- What are your copayments and deductibles for each type of treatment?
- How many days of inpatient or outpatient treatment are covered?
- What is the out-of-pocket maximum on substance use disorder treatment?
- What is deemed “medically necessary” by your insurance company and how is that determined?
- What are your medical policies related to substance use disorder treatment?
Medicare and Medicaid
As government-funded insurance programs, both Medicare and Medicaid offer substance use disorder treatment coverage. These benefits are pre-established—although Medicaid benefits vary from state to state, aside from the mandatory coverage required by the federal government. For both Medicare and Medicaid, you must choose a treatment center that accepts this kind of insurance. You can find more information about the coverage and benefits offered under each program by visiting the Center for Medicaid and Medicare Services website or by checking the Substance Abuse and Mental Health Services Administration's (SAMHSA) Medicare/Medicaid integrated information.
Types of Treatment Covered By Insurance
Treatment for substance use disorder usually includes some combination of the following components:
- Outpatient treatment
- Inpatient treatment
- Behavioral therapy
- Medication Assisted Treatment
Coverage will vary by plan, and you should contact your insurance company to find out exactly which benefits will be paid by your insurance. Medicare and Medicaid may also cover some combination of these types of treatments. Below, you’ll find an overview of the types of treatment that may be covered by your insurance plan.
Most insurance policies will cover your initial assessment. This is the appointment you make with your doctor or other medical professional to diagnose a substance use disorder and set up a treatment plan. It will include a wide range of questions, a physical examination, and drug and disease testing. This assessment is important because it will provide an official diagnosis, which may be important in determining which treatments your insurance company will decide are “medically necessary.”
Detoxification is often fully-covered by insurance, except in the case of rapid detox or ultra-rapid detox. Detoxification is the process by which your body is weaned off the drugs to which it has become addicted, and includes medical support and monitoring to ensure that the you are safe during the acute withdrawal phase. Depending on the patient’s medical condition, detoxification might take place in a hospital, a residential rehabilitation facility, or in an outpatient program.
Which portion of your detoxification your insurance company will cover may depend on where you receive treatment. Before treatment begins, contact your policy holder to find out about any restrictions on where detoxification may occur. Also clarify if a referral or other precertification from your doctor is needed.
Treatment Centers: Inpatient and Outpatient
Insurance coverage usually includes benefits for both inpatient and outpatient treatment—but there are often rules and limits. Most plans require some kind of verification that the treatment is medically necessary, so you may need to complete a preauthorization process with your insurer and/or obtain a referral from your doctor. In order for your treatment to be covered, you must choose a facility that accepts your insurance—and in some cases, that facility must be considered “in-network,” or part of a special group of doctors that accept your insurance. If you choose an “out-of-network” facility, you may be required to pay a higher deductible.
Coverage for inpatient or outpatient treatment is usually covered on a “limited days” or a “percentage” basis. That means your insurance company may only pay for a set length of time, or they will only pay for a portion of your costs no matter how long you stay. You can find out specific details about how your coverage works by talking with a representative at your insurance company.
Navigating treatment options can be challenging
Mental Health/Behavioral Treatment
Under the Affordable Care Act and the Parity Law, insurance companies are required to treat mental health conditions in the same way they do physical health conditions, offering the same level of care at the same cost.3
The costs for any mental health or behavior treatment you receive while attending an inpatient or outpatient treatment facility are covered as part of that treatment, so you won’t pay for it separately. After you leave, any treatment you receive must be deemed medically necessary—and that includes therapy or other behavioral treatments. You may need a referral to get substance use disorder therapy, and your insurance company may limit your number of visits and then reassess your condition and progress made toward treatment goals.
As with all treatments for substance use disorder (and other conditions), your insurance may require you to pay copayments or meet a deductible. Talk with your insurance company to find out what’s covered, and then talk with your doctor or addiction specialist to formulate an affordable recovery plan that works for you.
In some circumstances, a patient who has completed a substance use disorder treatment program may still need medications to support ongoing recovery. This is often the case for people with opioid use disorders, as these drugs cause chemical changes in the brain that may last for some time even after the person has stopped using the drug.4 Some users of alcohol also benefit from the use of medication as part of their recovery.5
As with all aspects of substance use disorder treatment, an insurance company has to agree that a treatment is medically necessary in order for the cost to be covered. The FDA has approved several medications for treatment of substance use disorders and many experts recommend that insurance plans cover medication assisted treatments. Still, coverage varies by plan.
To find out if your plan covers medication assisted treatment, contact your program administer to ask about which therapies are covered and what kinds of copayments and deductibles apply.