Who Answers?
It can be frustrating when you are ready to enter substance addiction treatment but find out it may not be affordable. The cost of paying for rehab can be a deterrent for some who believe they will never be able to afford to get help. The good news is that this is not true. Options are available for everyone, including using private insurance to pay for addiction treatment, buying a cheap plan on the Marketplace, using Medicaid or Medicare, or choosing a state-funded free rehab.
In this article:
- Does Insurance Cover Rehab?
- Expansion in Insurance Coverage
- Do Medicare and Medicaid Cover Rehab?
- Finding Financing Options for Rehab
- Alternative Options for Paying for Rehab
- Takeaway on Paying for Rehab
Does Insurance Cover Rehab?
Thanks to the Affordable Care Act (ACA), insurance companies must cover substance abuse treatment services, such as detox, outpatient treatment, inpatient rehab, and therapy. ACA forced changes in insurance coverage to allow those needing substance misuse treatment the same privileges given for medical and surgical treatment services. Each state can make these changes through several expansion options.1
If you don’t have insurance, you can also purchase an affordable plan through the Marketplace. All you have to do is input your basic information and income and then the search results will show you available plans, as well as the price of the available plans.
Expansion in Insurance Coverage
Expansions in insurance coverage for addiction treatment are available through Medicaid and state health insurance exchanges, including adult children to the age of 26 covered by their parent’s insurance. In addition, people with pre-existing conditions cannot be denied insurance.
Insurance Reforms
Insurance reforms require the inclusion of addiction treatment screening and brief interventions. Each state can assess the treatment needs and gaps and apply regulations accordingly.
Enhanced Parity
Enhanced parity or equality in coverage for treatment is a result of the 2008 Mental Health Parity, and Addiction Equity Act prohibits insurance from restricting coverage for substance use disorders. Instead, they must consider it just as they would medical or surgical procedures.
Integration of Treatment
Creating new opportunities to combine substance use treatment and mainstream health care. The idea is that integrating addiction, mental health, and physical health services is a better way to treat the whole person.
Insurance Limits
Insurance coverage for substance use disorders (SUD) still has limitations. The 2008-2015 National Survey on Drug Use and Health examined 11,732 participants with substance use disorders who were privately insured. The goal was to find out what private insurance SUD coverage is like and how it is most used. The results put a spotlight on insurance limitations, including:2
- 37.6% of participants did not know if their insurance plan covers SUD treatment.
- 13.4% of participants who knew they had coverage received SUD treatment.
- 24.9% of participants reported they do not have coverage.
- 4.7% of participants received inpatient treatment.
- 5.7% of participants received residential treatment.
- 7.5% of participants received outpatient specialty treatment.
- 7.8% of participants received treatment at a doctor’s office or the emergency room.
Lack of knowledge about insurance coverage is a barrier, but it is not the only one. Other barriers to receiving SUD treatment include:3
- Preauthorization requirements
- Copays
- Maximum number of visits
- Providers required to be in-network and out-of-network denials
- Step therapy or fail-first protocols
- Restrictions on facility location, provider specialty, type of facility, etc.
- Provider licensure requirements
- Exclusions of higher-level treatment programs
- Required treatment plans and updates
- Refusing future coverage if a participant leaves treatment against medical advice
- Separation of medical, mental health, and substance use disorders
Limits will vary significantly because each state can determine what is covered and what is not covered regarding private and public health insurance.
Do Medicare and Medicaid Cover Rehab?
Medicare is a federal health insurance plan for people over the age of 65. Medicare also covers people of any age with a disability or end-stage disease.
Medicare Coverage and Limitations
Three parts to Medicare assist in paying for rehab.4
Part A covers hospital stays, including inpatient rehab for substance use disorders. You will be responsible for a copay like a copay for other hospital stays.
Medicare Part B covers medical insurance and outpatient substance use disorder treatment. The following are covered:
- Substance use disorder therapies
- Education
- Follow-ups after hospitalization
- Assessment and brief interventions
Medicare Part D covers prescription drugs, including outpatient and inpatient hospitalization drugs, such as methadone.
On a limited and proven need, Medicare also covers services including telehealth and home health for substance use treatment.4
Medicare requires certain factors to be in place before coverage begins, including a statement from your provider stating the services are necessary. You must also receive services from a Medicare-approved facility and have a plan of care created by your provider. This eliminates many community-based organizations. In addition, opioid treatment programs must be certified by the Substance Abuse and Mental Health Services Administration (SAMHSA) and enrolled in the Medicare program. You will also be expected to pay 20% of the total cost of outpatient services after you meet the required deductible.5
Medicaid Coverage and Limitations
According to research, 12% of Medicaid recipients over 18 have substance use disorders. In recent years, the expansions of Medicaid coverage have helped millions of people get coverage. In the states that expanded Medicaid services, treatment for SUD increased by over 100%. Medicaid benefits have expanded to the following:6
- Outpatient SUD services
- Intensive outpatient SUD services
- Recovery services
- Detoxification
- Medication-assisted treatment
Limitations of how to pay for rehab with Medicaid exist. Although more people have Medicaid and access to substance use disorder treatment, many are still not engaging in treatment. One reason may be that treatment facilities are not hiring new staff to take on an increase in Medicaid clients. Therefore, a person seeking SUD treatment may be on a waiting list or stop trying to get help when they are denied acceptance into a program.5
Finding Financing Options for Rehab
You may be surprised to learn that you have many more options for paying for rehab than insurance coverage, even though Medicare, Medicaid, and private health insurances are the top three payees.6
Substance use disorders are part of a larger mental health category. They are listed in the Diagnostic and Statistical Manual for Mental Disorders. Research reveals four out of five mental health treatment facilities offer some form of payment assistance to help those who need and deserve help paying for rehab.
Other results include:7
- 69.5% of residential treatment facilities offer payment assistance.
- 89% of treatment facilities in rural areas and 77% in urban areas offer payment assistance.
- 88% of outpatient treatment facilities offer payment assistance.
Researchers also found that 62% of substance use treatment centers offered recovery services on a sliding fee scale, determining a charge for services. Sliding fee scales consider a person’s income when determining how much to charge for substance use disorder treatment services.8 Contacting various treatment programs will give you multiple estimates of what treatment may cost and suggestions on how to pay for rehab.
Alternative Options for Paying for Rehab
County organizations receive funding to assist residents in paying for rehab and other services, including housing, crisis services, prevention programs, and substance use disorders treatment. Some local organizations receive block grants allowing them to help individuals pay for rehab. Reaching out to your local drug and alcohol county program administrator is a great way to discover what is available.7
Federal funding is often distributed to local organizations in the form of grants. You can find out which agencies received funding that can help you in paying for rehab or individual services such as screenings and assessments. Other places to seek help in paying for rehab include:9
- Hospital crisis prevention programs
- State representatives who may know of local or state taxes earmarked for SUD services
- Local churches and nonprofit organizations who are often willing to raise money and donate
- County commissioners who often have access to funding for special projects
State and Local Government Rehab Programs
Substance use disorder treatment programs owned and run by state or local governments know how to pay for rehab, including access to their inpatient and outpatient services. It is through their substance use services. Examples of state and local government programs include:9
- The Department of Veterans Affairs and the VA Hospital
- Tax-exempt hospitals
- Federally Qualified Health Centers
- County mental health and substance misuse centers
- Drug Courts for those in legal trouble or incarceration
Another example of a free addiction rehab program is the free Salvation Army’s 180-day work-therapy program. Criteria for acceptance are that you must be between 21 and 65, pass a drug test upon arrival, perform work therapy duties for eight hours a day, attend classes and workshops, and have appropriate work-related documents.10
The Directory of Single State Agencies for Substance Abuse Services lists contact information for your state-run programs. Typical criteria to qualify for a program include having proof of residence, proof of income, and complete addiction history.11 Each federally or state-funded substance misuse treatment program will vary based on how much money they are given and determine which services will help the most people in your community.
Paying for Rehab with a Scholarship
If you can’t reasonably afford to pay for drug or alcohol rehab, rehab scholarships are available. Scholarships, which are offered by individual rehabs as well as third-party organizations, cover the cost of addiction treatment.
Every rehab scholarship is different. Some cover outpatient and inpatient rehab programs, while others may cover one or the other. Because inpatient rehab is more expensive than outpatient, there tend to be more rehab scholarships for inpatient available.
To find a rehab scholarship, you can call rehabs directly to find out if they offer scholarships. If they don’t, they may be able to refer you to a treatment program that does. You may also want the treatment provider who conducted your substance abuse assessment. They may be able to refer you to a treatment program that offers scholarships.
Lastly, you can also check out 10,000 Beds, a nonprofit that provides rehab scholarships to those who can’t afford addiction treatment.
Takeaway on Paying for Rehab
You can access substance use disorder treatment in many ways other than a private insurance company, Medicare, or Medicaid.
The key to paying for rehab is never giving up trying to find resources. Ask for help. You deserve the treatment that can lead to the healthy, happy lifestyle you once knew. Start by asking the rehab centers directly about how to pay for rehab. You may be pleasantly surprised to learn how willing people will be to help you get into treatment. All they want in return is for you to succeed in recovery.
Resources
- Abraham, A. J., Andrews, C. M., Grogan, C. M., D’Aunno, T., Humphreys, K. N., Pollack, H. A., & Friedmann, P. D. (2017). The Affordable Care Act Transformation of Substance Use Disorder Treatment. American journal of public health, 107(1), 31-32.
- Mojtabai, R., Mauro, C., Wall, M. M., Barry, C. L., & Olfson, M. (2020). Private Health Insurance Coverage of Drug Use Disorder Treatment: 2005-2018. PloS One, 15(10), e0240298.
- Department of Health and Human Services. (n.d.). Warning Signs- Plan or Policy Non-Quantitative Treatment Limitations (NQTLs) that Require Additional Analysis to Determine Mental Health Parity Compliance.
- Center for Medicare Advocacy. (2022). Medicare Coverage of Mental Health and Substance Abuse Services.
- Medicare Interactive. (2022). Treatment for Alcoholism and Substance Use Disorder.
- Andrews, C. M., Pollack, H. A., Abraham, A. J., Grogan, C. M., Bersamira, C. S., D’Aunno, T., & Friedmann, P. D. (2019). Medicaid Coverage in Substance Use Disorder Treatment After the Affordable Care Act. Journal of Substance Abuse Treatment, 102, 1-7.
- Smith K, Kuramoto-Crawford J, Lynch S. (2016). Availability of Payment Assistance for Mental Health Services in US Mental Health Treatment Facilities. The CBHSQ Report. Rockville (MD): Substance Abuse and Mental Health Services Administration (US).
- Strashny A. (2014). Recovery Services Provided by Substance Abuse Treatment Facilities in the United States. The CBHSQ Report. Rockville (MD): Substance Abuse and Mental Health Services Administration (US).
- US Department of Health and Human Services. (2016). Chapter 6, Health Care Systems and Substance Use Disorders. Substance Abuse and Mental Health Services Administration (US). Office of the Surgeon General (US). Facing Addiction in America: The Surgeon General’s Report on Alcohol, Drugs, and Health [Internet]. Washington (DC).
- The Salvation Army. (2022). Adult Rehabilitation Center.
- Substance Abuse and Mental Health Services Administration. (2016). Directory of Single State Agencies (SSA) for Substance Abuse Services.
