Things you should know about insurance covering rehab and why you shouldn’t wait until the first of the year to get help.
As we approach the holidays and the end of the year, many people struggling with an addiction to drugs or alcohol may want to wait until the new year to get help for their addiction. That’s understandable—who wants to miss holiday time with family and friends? The problem is, the holidays can be stressful and there’s always a risk in waiting to get help. The emotional and physical price you’ll pay for delaying treatment can be enormous. But there’s another simple and practical reason for not waiting to get help until after the first of the year: if you are using insurance, It will probably cost less to get treatment before the new year.
Why it costs less to go to treatment before January 1st:
Most insurance policies run on a calendar year—January through December—which means that your deductible and your out of pocket maximum will reset on January 1st.
The first thing to understand is what insurance companies mean by the deductible and out of pocket max. The deductible is the portion of the medical bill you are responsible for before your insurance starts paying, and the out of pocket maximum is the limit on how much money you will have to pay before you are covered at 100%. The standard rule of thumb is the higher your premium (the monthly fee you pay to have insurance) the lower your deductible, and conversely, by increasing your premium you can lower your deductible. It’s becoming increasingly more common for drug rehabs and hospitals to ask patients to pay their deductible in advance so that the facility or hospital be stuck with any unpaid bills.
Let’s say that you have a $2,000 deductible. In January you had an MRI which cost you $1200—you would have to pay that bill in full. Then in August, you had another procedure for which you were billed $800—once that’s paid you’ve have met your deductible.
Ok you’ve met your deductible, but that doesn’t mean that 100% of your charges are covered—your insurance will, most likely, cover a percentage of the costs. That is your co-insurance. A standard co-insurance would be that 20%. This means that 20% of billed charges are your responsibility. Now that may sound like a lot. A catastrophic illness could result in a million dollars worth of medical bills, but don’t worry, you won’t be responsible for 20% of a million dollars. Most policies have something called an out-of-pocket maximum which is a limit on how much of the bill you will be responsible for before your insurance begins to pay at 100%. The Affordable Care Act (ACA ) limits how high in-network out-of-pocket costs can be, but the limit itself is fairly high. In 2019, health plans can have out-of-pocket maximum as high as $7,900 for an individual and $15,800 for family. If your out-of-pocket max is $4000, you will owe a percentage of billed charges until you reach $4000, then your insurance pays 100%.
The most important thing to remember is that by the end of the year there is a good chance you’ve accrued a big part toward your deductible and out-of-pocket maximum and it may cost you little or nothing to come into treatment—of course, this depends on which type of insurance you have and which benefits are covered. But if you’re on a calendar year plan—and you most likely are—come January 1st your deductible and out of pocket maximum reset and you’ll again be responsible for your deductible and a percentage of billed costs.
DOES MY INSURANCE COVER REHAB?
In most cases, the answer is yes. In 2010 President Obama signed the Affordable Care Act (ACA) into law which listed mental health and addiction treatment as an essential health benefit or EBH, meaning it must be included in policies sold on the exchange. Also, addiction and relapse are no longer considered pre-existing conditions—you can use your insurance for treatment without fear of losing substance abuse benefits should you change your insurance provider. The government recognizes that treatment for mental health and substance use disorders is far less expensive than treating addiction-related issues down the road.
If you have a commercial policy through your employer, you will probably have coverage for substance abuse. With the exception of Arizona, Georgia, Indiana, Iowa, Idaho, Oklahoma, and Wyoming, all states currently require commercial group health insurers to cover addiction treatment services.
HOW MUCH DOES DRUG TREATMENT COST WITH INSURANCE?
There is no one answer to that question. There are many different types of policies and not all of them cover the same services. Policies have stipulations, provisos, and small print, for example; you may have to go within a specific “network” for care; detox may be allowed only in an acute hospital setting; there may be a limit on the number of days allowed for treatment; only out-patient services are covered.
Ultimately, any money spent on recovery will be a bargain compared to the costs you’ll incur by continuing to use. When you consider what you spend daily on drugs and alcohol, add up lost wages, and consider how much a decline in your overall health will cost you, you’ll see that you come out ahead by paying for treatment. But to avoid being hit with big bills in the first of the year, why not seek treatment now, over the holidays, and give yourself the gift of your life.
Laguna View Detox has insurance experts standing by who will call your insurance provider for you and let you know exactly what your coverage is for substance abuse treatment. With a simple call to (866) 819-7187 an insurance specialist will work on your behalf to determine how much, if any, your medical insurance provider will pay for substance abuse treatment or mental health treatment.