Rehab can cost $1,000 or more per day. For most people, it is worth the cost, but the out-of-pocket expense may be unmanageable. Under the Affordable Care and Mental Health Parity and Addiction Equity Acts, insurance plans are required to cover behavioral and mental health services, including inpatient rehab. However, the reality of insurance coverage for rehab is not always consistent with the promises of mental health care parity.
Insurance Coverage for Rehab: The Basics
Insurance plans must cover mental health care, including inpatient treatment, under the same rules the plan applies to other health services. This means that insurers can establish certain criteria that insured people must meet before receiving rehab coverage. They may have to seek a referral from a physician, exhaust less expensive options, or receive a mental health diagnosis.
The practical effect of these policies is that not all rehab is covered. And when it is covered, people with insurance may have to meet certain criteria to get coverage. When facing a mental health emergency, this isn’t always practical. Someone with a severe opioid addiction, for instance, might need immediate inpatient treatment. Waiting on an appointment to get a referral or going to therapy first might not be practical.
It is wise to look at your insurer’s requirements as soon as you think you might need rehab. This may give you time to research insurance policies, or to find policy exceptions.
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Covered Treatment Doesn’t Mean Free Treatment
Cynthia Turner, LCSW, LSATP, MAC, a Virginia therapist who helps people manage substance addiction, cautions that even when insurance does cover rehab, people seeking treatment can be left with large bills.
“A person might need to meet a deductible before insurance will cover any amount. They might have co-insurance where they are responsible for a portion of treatment, sometimes 50%. Insurance might only cover what they call ‘reasonable and customary,’ which is an amount they determine, not what treatment actually costs. Insurance also requires you to meet certain ‘medically necessary’ criteria for them to pay, and people often have to have utilized other less restrictive options before going to an inpatient setting,” she says.
Mental Health Parity: Still Not a Reality
There is another complicating factor in the world of insurance coverage for rehab. Many reports suggest that insurers fail to comply with mental health parity laws. They may require insured people to jump through hoops that they do not require for physical health. In other cases, they simply deny claims without explanation. People denied coverage for mental health benefits have a right to appeal the denial first to the insurer, and then to an independent third party. But keep in mind that fighting denials can be costly and stressful.
Navigating Mental Health Coverage
According to Siobhan A. Morse, MHSA, CRC, division director of clinical services at Foundations Recovery Network, there are manageable ways to access good mental health coverage. For example, some insurance companies require you to prove that your treatment is “medically necessary.” In these cases, specialists at your rehab facility can speak with the insurance company directly and negotiate better coverage for you. Morse explains that these services are confidential, cost-free, and can even help you access the documentation required to satisfy your insurer.
- Gold, J. (2015, July 29). Health insurers face little enforcement of federal mental health parity law. Retrieved from http://www.npr.org/2015/07/29/427464632/health-insurers-flout-federal-parity-law-for-mental-health-coverage
- How to appeal an insurance company decision. (n.d.). Retrieved from https://www.healthcare.gov/appeal-insurance-company-decision/appeals
- Mental health and substance abuse health coverage options. (n.d.). Retrieved from https://www.healthcare.gov/coverage/mental-health-substance-abuse-coverage
- The Mental Health Parity and Addiction Equity Act (MHPAEA). (2016, October 27). Retrieved from https://www.cms.gov/cciio/programs-and-initiatives/other-insurance-protections/mhpaea_factsheet.html