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What Recovery Services Will Insurance Cover?

rehab-treatment-servicesInsurance coverage for substance abuse and addiction treatment is a somewhat complicated issue. Many insurance carriers cover treatment services, but the level of coverage varies by companies, policies and state laws where the coverage is in place. Government funding at the federal and state levels also covers treatment, but this varies from state to state.

Private Insurance Coverage of Addiction Recovery

Coverage for addiction treatment varies widely and is subject to state laws. Many insurance providers cover treatment for substance abuse, which is defined as a mental illness by both the World Health Organization and the American Psychiatric Association. The federal Mental Health Parity Act of 1996 requires insurance providers to provide an equal level of coverage (parity) for mental illness as for physical conditions. However, certain loopholes allow insurance companies to maintain coverage at levels that existed prior to the law, or to exclude benefits for substance abuse treatment. And, of course, insurance carriers who do not offer coverage for mental health are exempt.

In response, some states attempt to to increase mental health insurance parity, but these efforts have met resistance from the insurance industry. To date only nine states—Connecticut, Indiana, Kentucky, Maine, Maryland, Minnesota, Oregon, Rhode Island, Vermont and Washington—have laws requiring full parity for insurance coverage of substance abuse treatment. These laws require equal coverage in terms of inpatient and outpatient treatment, co-payments and annual and lifetime dollar limits. Two states—Idaho and North Carolina—offer full parity for substance abuse in state employees’ health plans. Check the provisions of your particular insurance plan to determine if and to what extent you are covered for substance abuse treatment.

Medicaid and Federal Block Grants for Addiction Recovery

Federal, state and local governments subsidize treatment for substance abuse, with state governments being the largest single purchaser of treatment services. Statistics provided by the Substance Abuse and Mental Health Administration (SAMHSA) indicate that 76% of the money spent on substance abuse treatment comes from the public sector, with approximately 40% of that provided by the federal Substance Abuse Prevention and Treatment Block Grant to states. Various federal agencies, from the Centers for Medicare and Medicaid Services to the Department of Defense, also provide block grants to states for substance abuse treatment.

Medicaid, Medicare, TRICARE, social security income (SSI) and social security disability insurance (SSDI) all have provisions for substance abuse treatment. However, in 1996 the Contract with America Advancement Act eliminated addiction as a qualifying disability for SSI/SSDI benefits.

Other sources of state revenue used for addiction treatment include the following:

  • General state revenues
  • Taxes
  • Fines for drug offenses
  • Assets seized in drug offense cases

Addiction Insurance Help

Although there is plenty of funding available, there are no hard and fast rules across the board regarding which treatment services are covered by insurance. You are well advised to check into the details of your particular insurance plan to see exactly what you are covered for. If you have any other questions about treatment, call our 24 hour, toll-free helpline now.

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