Insurance

How your insurance impacts your rehab options

Insurance plans often cover addiction treatment; however, even with coverage, some things can affect which rehab options are available to you and how much you’ll pay out of pocket for treatment. Insurance coverage generally depends on the following:

• In-network vs. out-of-network providers: Some plans require in-network treatment, but other plans allow out-of-network care at a higher cost.

• Insurance plan type: Plan types like PPO, HMO, and others vary widely in things like referral requirements and prior authorization needs (see more below on plan types). 

• Level of care needed: Coverage may change for the level of care you need, such as if you are seeking withdrawal management care or residential treatment. 

• Medical necessity: Insurance companies will typically review clinical assessments and progress to approve and continue coverage for treatment.

Find rehab options based on your specific insurance provider

One of the best ways to explore viable treatment options is to start with your specific insurance provider. Each insurer has its own coverage rules and provider networks. Choose your insurance company below to learn how coverage typically works and explore rehabs that accept that insurance in a given region:

• UnitedHealthcare 

Insurance basics for addiction treatment

Terms that often impact rehab coverage

Navigating coverage for addiction treatment can be confusing. The basic information on insurance below can help.

• Deductible: A fixed amount you spend out of your own pocket before your insurance benefits kick in. Although some routine screenings are usually covered regardless of your deductible, addiction treatment generally requires you to meet your deductible first. The law allows this, provided the deductible is comparable to what you'd pay for other medical procedures.
• Copay: This is a fixed and flat amount you pay for a specific service — for example, $50 for therapy sessions. Copays usually apply both before and after you’ve met your deductible.
• Coinsurance: This is the percentage of the cost you are required to pay after meeting your annual deductible. For example, in an 80/20 plan, your insurance pays 80%, and you would pay 20%.
• Out-of-pocket maximum: This is the most you are expected to pay for care in a single year. Once you reach this ceiling, your insurance pays 100% of the remaining covered services for the rest of the year.

How to estimate potential out-of-pocket costs for care

The following steps can help you estimate what you might pay out of pocket for treatment:

1. 1. Confirm whether the facility is in-network: This is a major factor of cost as in-network care is usually significantly less expensive because your insurer has negotiated rates with those particular providers.

   • A 30-day residential program that costs $20,000 may actually only cost a few thousand dollars out-of-pocket at an in-network facility, while the same level of care at an out-of-network facility could cost $10,000 or more depending on your specific plan. Learn more about the cost of addiction treatment, including cost ranges by level of care and how insurance impacts what you'll pay.

2. 2. Check your deductible: Look at how much your annual deductible is and whether you’ve already met any portion of it. You usually need to pay your deductible amount first before your insurance kicks in and shares the cost.
3. 3. Find your coinsurance or copay: After your deductible, you may be responsible for a percentage of the cost (coinsurance) or a flat fee (copay), depending on the type of plan you have.
4. 4. Apply those costs to the insurer’s allowed amount: Insurance does not base your costs on the facility’s full list price; instead, it uses a negotiated or “allowed” amount (see more below). Your share of the cost is based on that lower amount.
5. 5. Compare your total cost to your out-of-pocket maximum: Once your total spending reaches your out-of-pocket maximum for the year, your insurance typically will then pay for 100% of covered services for the rest of the year.

Because plans vary widely, the most accurate way to estimate your cost is to request a verification of benefits (VOB) (a review done by the facility that states your deductible, copays, coinsurance, out-of-pocket maximum, prior authorization requirements, and whether the facility is in or out of network with your insurance) from a treatment provider or call your insurance company.

How the “allowed amount” impacts what you pay for care

Insurance companies usually negotiate lower rates than the typical facility list price with in-network providers. This negotiated rate is called the “allowed amount”. For example:

• A facility may charge $50,000 for their list price.
• Your insurance may set an allowed amount of $35,000.
• Your deductible and coinsurance are based on that $35,000 and not the full $50,000 listed price.

For out-of-network care, the allowed amount is often lower, and providers may charge you the difference. This is one of the main reasons costs can increase significantly outside your network.

Private insurance plan types

The type of plan you have determines how much flexibility you have in choosing treatment at a specific rehab facility. Below are common private insurance plan types:

• HMO (Health Maintenance Organization): You will most likely need a referral from your primary care provider to access treatment under an HMO plan, and you must stay in-network.
• PPO (Preferred Provider Organization): For PPOs, you do not need a referral for care, and you have the flexibility to select out-of-network providers, though you will face higher costs if you do so.
• HMO - Open Access: These plans offer a degree of flexibility in between traditional HMO and PPO plans. Usually, this means you can see an in-network specialist without a referral, but you still must stay in-network for coverage.
• EPO (Exclusive Provider Organization): Similar to an HMO plan in that you must stay in-network, but you usually don't need a referral to see a specialist.

Level of care impact on cost and coverage

The level of care you need can also greatly impact how much you pay and how your insurance covers treatment.

• Withdrawal management (detox): You receive short-term, medically supervised care to help you safely stop using alcohol or other drugs and manage withdrawal symptoms. Withdrawal management may take place in a hospital, residential, or outpatient setting, depending on your withdrawal symptoms and risk of complications, and is often the first step before ongoing treatment. Withdrawal management should always be directly linked to longer-term treatment. Some programs may be connected to longer-term inpatient treatment or a residential program. In other cases, outpatient treatment may be appropriate after completion of withdrawal management.
• Inpatient: You stay overnight and receive 24/7 care in a structured setting. This can be in a hospital or a nonhospital residential program, and can be especially helpful if you need intensive support for substance use and other health concerns. Inpatient care often follows withdrawal management when additional stabilization or intensive treatment is needed.
• Hospital: You stay in a hospital and receive medically managed, highly structured care, including 24/7 nursing for substance use and other serious biomedical or mental health conditions. Hospital care often focuses on stabilization and may be short term.
• Outpatient: You live at home and go to a clinic or facility regularly for individual, group, or family sessions with addiction treatment professionals. Outpatient care can range from an hour or less per week to several days per week. Depending on your needs, outpatient treatment may include a partial hospitalization program (PHP), an intensive outpatient program (IOP), or standard outpatient therapy. Typically, higher intensity treatment is advised initially, and once you’ve achieved recovery, sessions can be shorter and/or more spaced out. Some people may also complete withdrawal management on an outpatient basis before continuing treatment.
• Telehealth: You meet with addiction treatment professionals by phone or secure video instead of in person. Outpatient care may be delivered exclusively via telehealth or through a combination of virtual and in-person visits. Telehealth can also supplement  residential or hospital-based care.

Insurance companies often review medical necessity to determine which level of care is appropriate and how long it will be covered for. In some cases, coverage may change as your needs change.

When in-network options aren’t actually available

Under the law, your insurance must provide you access to treatment. However, some people encounter ghost networks, which are directories that list providers who aren't actually available, no longer accept the plan, or have extended wait times. If you’re unable to access an in-network provider:

• Request your Evidence of Coverage: This will outline your insurer’s contractual obligations to you and if in-network options aren’t available, your plan may be required to cover out-of-network care at in-network rates.
• Reach out to your Behavioral Health Subcontractor: Many major insurers outsource their mental health networks to partners (for example, Optum is the partner UnitedHealthCare uses). Calling these companies directly can provide more accurate data on availability. See individual insurance pages for details on subcontractors.

Prior authorization and coverage reviews

Many insurance plans require prior authorization before you can start certain types of treatment and receive coverage. This means your provider must get approval from your insurance company before treatment begins. Insurance companies may also conduct ongoing reviews during treatment to determine whether continued care is medically necessary. If coverage is reduced or denied, you may become responsible for a larger portion of the cost.

In most cases, the treatment facility handles the prior authorization process on your behalf, but it's important to confirm this before admission.

Prior authorization requirements vary by level of care. Withdrawal management and residential care usually require the most extensive clinical documentation, while outpatient services may have fewer requirements depending on your insurance plan.

Before admission, ask the facility the following questions:

• Does my plan require prior authorization?

• Will your admissions team handle the authorization process?

• What clinical information will my insurance company require?

• How long does approval typically take?

• What happens if my insurance approves fewer days than my treatment team recommends?

• Will you help appeal a denial if coverage is reduced or denied?