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Factors in Treatment Pricing

There are many different factors when pricing treatment including insurance coverage and parity law.

A significant percentage of people who suffer from addiction do not receive treatment, for a variety of reasons. One is that the cognitive effects of drugs or alcohol often include impairments to judgment, which can make it more difficult to associate cause and effect. People may therefore have trouble understanding that they are addicted. Fear of being unable to afford treatment is another factor, especially for those without health insurance or those whose insurance does not cover substance abuse treatment. In a 2010 publication, the Substance Abuse and Mental Health Services Administration (SAMHSA) reported that those in that situation noted financial considerations as their primary reason not to seek help.

Factors Affecting the Cost of Addiction Treatment

The cost of treatment varies significantly, due to a wide range of factors, including the following:

  • Whether the program is outpatient or residential – Addiction treatment programs can be divided into two broad categories. Outpatient programs are those in which patients remain in their homes or live somewhere other than the treatment facility. Some programs offer therapy during the day and others on the evenings or weekends. Inpatient, or residential programs are those in which patients live in the treatment facility. They are often the best choice for those with significant or long-standing addiction, but because patients are paying for meals and lodging as well as for treatment, the costs are higher.
  • Length of treatment – In a publication entitled Principles of Drug Addiction Treatment: A Research-Based Guide, the National Institute on Drug Abuse (NIDA) recommends treatment of at least 90 days duration. Unfortunately, because longer treatment means higher costs, people are often treated for much shorter periods of time. It is sometimes possible to follow a short residential treatment stay with ongoing outpatient treatment, and it is generally wise for patients to supplement treatment with support group attendance.

One intensive treatment model designed for high-need patients (such as those with multiple addictions, significant psychiatric problems, previous histories of unsuccessful treatment, or involvement with the legal system) is the therapeutic community, or TC. NIDA notes that the TC length of stay was originally open-ended, but the reality of financial considerations and managed care has led to an expected treatment length. This was once about 24 months and is now 12 months. Studies compared two 12-month programs. In one, patients received nine months of residential and three months of outpatient treatment. In the other patients received six months of each. The programs produced similar results except that the one with the longer residential phase led to better employment outcomes. Financial considerations are also leading providers to offer outpatient TCs, which utilize a community approach and are more intensive than typical outpatient programs. NIDA reports that outpatient TCs may be an acceptable and more cost-effective option for patients who do not have severe mental health or social functioning challenges.

  • Staffing – Treatment programs vary widely in the types and educational and experience levels of their staff. Counselors can have no college degree or can have bachelor’s, master’s, or doctoral-level education. Some programs offer extensive medical care, with physicians, registered nurses, and other medical personnel in their employment. Because more educated and experienced staff tend to receive higher wages, those programs that employ them are generally more expensive. This is true for both residential and outpatient treatment. Outpatients programs that offer medication management (methadone or similar drugs) are generally more expensive than those that do not.
  • Location – Cost-of-living expenses vary by location, and this may affect a program’s charges. Insurance coverage also varies by location, which is often due to differences in state regulations.
  • Patient diagnosis – It is very common for substance addiction to co-occur with mental health conditions such as anxiety, depression, or post-traumatic stress disorder. For best treatment outcomes, it is wise to treat all identified conditions concurrently, in an integrated manner. Treatment should always be individualized, and the particular diagnosis of each patient will affect cost.

Paying for Addiction Treatment

There are a variety of ways to pay for treatment. Health insurance often covers a significant portion of the cost. This is true for both private insurance (whether offered through an employer, a school, or privately purchased) and public (such as Medicare). Medicare and most private insurance policies cover addiction treatment that a doctor believes to be medically necessary. Some insurance companies have preferred provider networks, and treatment from a physician or program within the network will be covered at a higher rate. Patient costs may vary depending on the amount of a policyholder’s deductible, the amount of the co-pay, and whether or not the policy caps the total dollar amount allowed.

Those without health insurance may be able to access treatment from a program that charges on a sliding scale based on income. There are also programs, primarily run by private non-profit organizations, which offer free treatment to those who qualify. Although treatment may seem like a financial strain, recovery often greatly improves an individual’s financial health due to increased employment opportunities, lower medical bills, and a freeing up of resources once spent on drugs or alcohol.

We Can Help

If you are ready to address addiction, we can help you find a treatment program that fits your personal and financial needs. The phone counselors who staff our toll-free helpline can answer your questions and can check your insurance coverage for you if you wish, at no cost or obligation. The helpline is available 24 hours a day, so there’s never a wrong time to call. Invest in your future and take a step toward recovery today.