Using Health Insurance for Addiction Treatment

Using Health Insurance for Addiction Treatment

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Let’s face it, addiction treatment can be costly; even those who know little of the ins and outs of substance abuse treatment can assume this when they look at their own medical bills. And for those seeking recovery, it remains a serious barrier to treatment.

Approximately 10 percent of those who fit the criteria for substance use disorder ever receive treatment and one of the major reasons for this is the price tag of treatment and the belief that treatment was not financially feasible.

According to data taken recently, the cost of a residential inpatient rehab program can range anywhere from $5,000 to $80,00 dollars with the cost of detox is $560 on average a day.2 All in all, the out-of-pocket expenses of addiction treatment are not something most people have laying around.

According to a recent study, 24 percent of adults surveyed where unsure whether their insurance would cover mental health expenses like substance use disorder the same way that it covers their regular health expenses.3

If you are looking to start addiction treatment you may be surprised to learn that many Americans can save thousands of dollars by using their insurance for addiction treatment. Read on to discover more about the role of insurance in addiction recovery including what will be covered, what kind of insurance works best. If you are also wondering: “How do I verify my insurance,” we will also be discussing that at the very end.

Insurance Coverage for Addiction Treatment

Substance use disorder also called addiction, is classified as a mental disorder and under currently law is covered by most health insurance plans in the United States­. But it wasn’t always that way.

Before the Affordable Care Act and the Mental Health Parity Act of 2008 was passed, providers of health insurance were not required to cover mental health treatments they do medical procedures under their plans.4

Now a days, the likelihood that insurance will cover a portion of your substance abuse treatment is much higher. Here are some of the costs your insurance will likely cover5

  • Behavioral health treatments including psychotherapy and counseling
  • Inpatient programs for mental and behavioral health treatment
  • Substance abuse treatment which may include inpatient detox, inpatient rehab, and outpatient treatment

What Is Mental Health Parity?

Mental health parity laws mandate that insurance companies must provide similar coverage for mental healthcare treatment as they do for physical health services.6

Parity laws protect individuals with mental health and substance abuse treatment needs from being unfairly discriminated against by their insurance provider and protects employees from being discriminated against by their employers for seeking treatment.

Who Is Fully Protected Under the Laws of The Affordable Act?

  • People working for private sector employers with 51 or more workers6
  • Smaller businesses that restructured their insurance plans after the Affordable Care Act passed into law6
  • Those with healthcare plans being offered through the health insurance marketplace
  • People receiving Medicaid (state-funded) health insurance

Who Is Unlikely Receive Healthcare Benefits According to Parity Laws?

  • Those with healthcare plans made specifically for retirees
  • Individuals who work for private sector companies with fewer than 51 employees who have not updated their healthcare plans after the Affordable Care Law went into effect6

Benefits of Having Insurance

You Will Save Money

Going through your insurance to cover the costs of addiction treatment could end up saving you thousands of dollars–especially if your rehab center is in your insurance’s network. In fact, health insurance plans generally cover between 60-90 percent of expenses after your deductible is paid and plans purchased in the healthcare marketplace cannot place a yearly or lifetime limit on how much they will cover as long as it is deemed an essential health benefit.6,7

You Can Afford to Go to Treatment Longer

Nobody wants to stay in treatment forever, but recovery takes time. Depending on how severe your substance abuse issue is, having the financial flexibility of insurance to continue treatment as needed can be a blessing in a time of need.

Increases Your Likelihood of Success

As out of pocket expenses rise, many people choose to shorten or discontinue their treatment. A person may, for example, decide to go home after a medical detox program instead of continuing treatment due to lack of funds. Without the training and resources, they would gain in rehab, however, they are likely to fall back into their old cycles of use.

Conversely, a person that has addiction treatment insurance is more likely to be able to afford quality detox and rehabilitation services which will enable them to get the help that they need and with enough effort reach long-term recovery and sobriety.

Types of Insurance commonly accepted

While most insurance companies provide coverage for substance abuse and mental health, it is not always easy finding treatment that is in network. If you live in a rural area away from a major city, you may have to travel far–even out of state to find a quality program compatible with your insurance.

Another important factor is insurance type. Depending on the way your plan is structured, you have more­–or les flexibility when choosing a substance abuse treatment plan.

HMO (Health Maintenance Organization)

HMO plans limit their coverage to providers within their network who have agreed to their special rates. For this reason, it can be difficult to find a suitable addiction rehab center in network near you.

EPO (Exclusive Provider Organization)

EPOs similarly to HMOs, only cover providers within their network but their networks being larger than HMO’s can provide wider coverage and can even span several states.

PPO (Preferred Provider Organization)

PPOs provide the greatest amount of flexibility for those seeking substance abuse treatment. While their premiums tend to run on the higher side, they make up for it with lower co-pays, and coverage for out of network care.

How to verify insurance for addiction treatment

Verifying your insurance for addiction treatment is easier than ever as many rehab centers have e-forms to verify insurance on their websites. For those more technically challenged, you can also call your local rehab center to verify your insurance coverage as well. And if you want to be extra sure, you can also call your insurance and find out who is in network from them.

For those that require a referral from their primary care physician, finding an in-network substance abuse treatment center could be as easy as talking to your doctor.

Get Help Today

Looking for an effective way to overcome drug or alcohol abuse? Golden Road Recovery is an inpatient drug and alcohol rehab center in Los Angeles, California. To learn more about how we can help, call us today at (877) 372-0536.


Center for Behavioral Health Statistics and Quality. (2016). Results from the 2015 National Survey on Drug Use and Health: Detailed tables. Rockville, MD: Substance Abuse and Mental Health Services Administration.

Average cost of drug rehab [2022]: By type, state & more. NCDAS. (2022, April 6). Retrieved September 17, 2022

American Psychological Association. (n.d.). Few Americans aware of their rights for Mental Health Coverage. American Psychological Association. Retrieved September 17, 2022

Baumgartner, J. C., Aboulafia, G. N., & McIntosh, A. (2020, April 3). The ACA at 10: How has it impacted Mental Health Care? Commonwealth Fund. Retrieved September 17, 2022

Mental health and substance abuse health coverage options. (n.d.). Retrieved September 17, 2022

Parity of Mental Health and Substance Use Benefits with Other Benefits: Using Your Employer-Sponsored Health Plan to Cover Services. (n.d.). Retrieved September 18, 2022

Health coverage protects you from high medical costs. (n.d.). Retrieved September 17, 2022

Essential health benefits – glossary. Glossary | (n.d.). Retrieved September 17, 2022

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License Number: 191000AP
Effective Date: 06/01/2021
Expiration Date: 05/31/2025

License Number: 191000AP
Effective Date: 06/01/2021
Expiration Date: 05/31/2025

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