Addiction Treatment & Insurance Coverage

Things You Should Know Before You Call

Among the more frustrating aspects of the health care system in the United States is, without question, insurance coverage. Dealing with insurance providers in this day and age is every bit as agonizing as acquiring an auto loan or enduring a root canal. As confusing as insurance benefits can be in general, how they apply to behavioral health and substance abuse can be even more confounding for policy holders.

In this part of my ongoing series on the ins and outs of accessing addiction treatment, I’ll share some insights on insurance coverage. Be advised, some readers will find this discouraging. But, it will be much easier to meet any challenges with eyes wide open and with some level of understanding.

The first thing I try to remind families is that insurance providers are not in the business of helping people get better. They do this to make money for their shareholders.

So, even treatment programs that are in-network with your insurance provider and covered by your policy will likely have to fight for every nickel of coverage they get for your loved one. And, the staff at the facility will have to justify every nickel of coverage.

In this process, you will likely become familiar with the term “medical necessity.” Policies may only cover the time a person is in treatment when the staff can show “medical necessity.” At the risk of sounding dramatic, that basically means it will cover the treatment if the person might die without getting it. This is another story, in and of itself. Again, insurance providers are in the business of making money.

Unfortunately, these circumstances create an atmosphere where it is nearly impossible for a high-quality program to survive on insurance alone, especially as an in-network facility.

The reimbursement rates (the amount of money your insurance company pays the program) are usually very, very low. They almost never pay well. So, most of the exceptional programs out there would prefer not to fool with insurance at all. Again, it is nearly impossible for a good facility, one that provides adequate staff and resources, to survive if the only revenue stream is insurance reimbursement.

That being said, if you find yourself on the phone with an admissions department at a substance abuse treatment facility, and they’re saying “come on in, your insurance will cover everything,” something isn’t right. Unless they are gaming the system (committing insurance fraud), there will just about always have to be money changing hands somehow.

The sad truth is this. The story of addiction treatment is a story of the “haves” and “have nots.” There is treatment. Then there is good treatment. People who are insurance-dependent get treatment. People with money get good treatment.

And, they almost always pay cash.

Think about the company names on the insurance cards you carry. I assure you, the board members of those companies are not sending their family members to in-network facilities. They are probably paying cash, and doing so to the tune of $30,000 to $60,000 per month.

Before the burst of the housing bubble in 2008, everyday people were acquiring second mortgages on their homes in order to pay for addiction treatment for their sons and daughters. They did that because it was the only way they could avail their loved ones of the quality of care they deserved.

When the market crashed, it became that much harder for working-class people to get good treatment services. Again, those board members . . . none of them were taking out loans.

So, it takes a group very innovative and dedicated people to create an addiction treatment program that the average American can afford. These programs do exist. But, they are increasingly difficult to find. There are far more agencies out there whose length of stay is determined completely by insurance coverage. If it covers five days, you’re in treatment for five days.

That isn’t treatment. It’s a set up for failure.

Before you pick up the phone to place a loved one in a substance abuse treatment program, know what you and your family can afford.

Understand that, no matter how good an insurance policy you have, you will almost certainly need to write a check, use a credit card, or shell out some cash.

Ask questions about how the facility in question is funded. Call someone who knows more than you about this process and who doesn’t have a dog in the fight.

If you have questions or need help, you can email me at tom@tomgentry.net.