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Guide to Paying for Addiction Recovery

Just over 20 million Americans struggled with addiction in 2016, per the National Survey on Drug Use and Health (NSDUH), but only about 1 out of every 10 people who needed treatment actually got it.

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There are many barriers to treatment, and cost is a major one. While addiction treatment can save you money in the long run, as well as significantly improve your quality of life, it can be expensive.

There are many ways to pay for addiction treatment:

  • Insurance
  • Loans
  • Financing
  • Sliding scale options
  • Grants and scholarships

There are also public addiction treatment programs that provide free or low-cost services if you just can’t afford treatment or don’t have insurance to offset some of the costs.

Using Insurance to Pay for Addiction Treatment

If you have health insurance, the Affordable Care Act (ACA) ensures that you have equal coverage for mental health and substance abuse treatment services as you would for medical and surgical procedures and services. This is called parity.

Every insurance provider and specific plan is a little different in how they provide coverage, the level of coverage, and what services are going to be covered. Insurance coverage varies from state to state, provider to provider, and plan to plan. The best way to find out more about your specific coverage is to contact your insurance provider directly. They can walk you through your coverage and how to use it.

In-Network vs. Out-of-Network

Much of the time, your coverage will depend on whether or not the provider is considered in-network or out-of-network.

In-network providers often have contracts with insurance providers to offer services for a discounted rate. This means that you may have more coverage and fewer out-of-pocket expenses if you use a provider that is within your network. Some insurance plans will also only offer coverage if you use a provider who is considered in-network. Any services you get from an out-of-network provider will not be covered, or if they are covered, it will be at a lower rate.

An HMO (health maintenance organization) plan will typically expect you to use providers that are within a specific network, while a PPO (preferred provider organization) will often allow more flexibility to use the provider of your choice. However, you will typically pay more if you use a provider that is out-of-network than one who is in-network.

Plans and Level of Coverage

There are many different types of plans to choose from. The plan type will dictate your level of coverage, what services may or may not be covered, and the rate of coverage.

In general, most insurance providers offer coverage through a set of “metal” tier plans like these:

  • Platinum
  • Gold
  • Silver
  • Bronze

Typically, higher level plans cost more monthly, but they offer the best coverage. For example, a platinum plan may have more coverage than a bronze plan, but you will pay a higher monthly premium. Higher level plans may provide more coverage for addiction treatment services than lower level plans as well.

Again, your specific plan details can be best explained by your insurance provider.

Out-of-Pocket Expenses and Deductibles

Even when you are using insurance to pay for addiction treatment services, you will still have some expenses that are not covered, and you’ll be responsible to pay these. They are called out-of-pocket expenses.

Most plans will have deductibles that need to meet before coverage kicks in. You will need to spend a certain amount of money on your medical expenses — up to your deductible amount — before coverage kicks in.

For example, if you have a plan that has a $500 deductible and then offers coverage at 80 percent, you will have to pay for all services before that $500 deductible is met. You will also need to cover the remaining 20 percent of costs after the deductible is met.

Deductibles are usually annual, so after you reach the minimum amount, services are covered for the rest of the year. There is usually an out-of-pocket annual maximum amount. Once you reach that amount, all services are covered.

Using Insurance for a Dependent

You can usually keep a dependent child on your insurance plan until they turn 26. If your dependent is covered through your insurance plan, you can often use your coverage to help pay for addiction treatment services.

Dependent coverage is offered through a family insurance plan, and services that are covered will vary from plan to plan and by provider. Your insurance provider can help you determine if you can use your coverage for your immediate dependent.

Filing a Claim

To use insurance coverage to pay for addiction treatment, you will often need to pay for services up front and then file a claim to get reimbursed. Most insurance providers have forms and the ability to do this online. You will need to make sure you get an itemized bill from the addiction treatment services provider and include it with your claim.

Some insurance plans will ask that you first obtain a referral before receiving addiction treatment services. You may need to see your in-network primary care provider (PCP) first to get a referral.

You may also need to obtain prior authorization before you get help. Your insurance provider will have the forms and information you need to make sure you can use your coverage to pay for services.

Can You Be Kicked Off Your Insurance Plan for Attending Rehab?

You can’t be turned down for health insurance for a pre-existing condition, such as addiction, under the ACA. As a result, you can’t be kicked off your insurance plan for getting treatment services.

Addiction is a disease, and treatment services fall under one of the 10 essential health benefits that must be covered by insurance plans in some capacity.

Loans for Drug Treatment

It may seem like a good idea to use a credit card to pay for addiction treatment services and then pay back the debt later. Credit cards often have limits that may not be high enough to fund the cost of treatment; interest rates can be high; and it can be difficult to make monthly payments.

A private loan can help to save you money in the long run, and it can offer competitive interest rates with more flexible payment options. Lenders such as Prosper offer loans to cover health care expenses. A recovery-based health care lender, My Treatment Lender, also offers loans between $5,000 and $100,000 to cover addiction treatment and recovery services for qualified individuals.

  • Types of loan lenders: There are several different ways you can secure a loan to pay for addiction treatment. Private lenders, credit unions, and banks all offer loans that allow you to borrow money up front to pay for services and then pay back the loan on a set schedule. You may also borrow money from a family member or friend as a loan.
  • Types of loans: You may take out a private unsecured loan if you have great credit and a low income-to-debt ratio. Another option is to use something as collateral, such as your car or home. A bank is more likely to offer you a home equity loan at a lower interest rate than a private unsecured loan, for example. A home equity loan uses your house as collateral to ensure that you can pay the funds back. Other lenders may let you use your car in a similar fashion.
  • Expected interest rates: Interest rates for private unsecured loans can range between 5 percent and 36 percent. Typically, loans to help pay for addiction treatment have competitive and low interest rates. Home equity loans offered by a credit union or a bank generally have some of the lowest interest rates on the market.
  • The fine print: To qualify for a loan, you will typically need to show proof that you will be able to pay it back. Lenders will often ask for a lot of personal and financial information, including income, your current debt level, and any collateral you can offer. You will need to set up a payment plan you can adhere to over time.

Do Rehab Centers Offer Financing?

Many rehab centers will offer financing themselves. You can work with a professional at a treatment facility to set up a payment plan that will fit within your budget to get you the treatment services you need when you need them. This can break up the total cost of care into smaller chunks that are more manageable.

Oftentimes, loans from treatment facilities will offer extended payback timelines. This ensures you can focus on treatment and not worry about payments until you are stable in recovery.

Sliding Scale: How It Works

The American Psychological Association (APA) publishes that a sliding scale can be used as a payment option when you may not be able to cover the complete costs of treatment services. Usually, a sliding scale will take into account your income and financial situation as well as your number of dependents to determine how much you can afford to pay and then adjust the total costs accordingly.

Specific facilities may offer this sliding scale pricing option. Make sure to inquire beforehand so you know what to expect.

Grants for Hardship Cases

Scholarships and grants are sometimes available for low-income and hardship cases. If you can’t afford treatment services and meet eligibility requirements, you may be able to qualify for a specialty grant.

These options are preferable to loans since you don’t have to pay back grants or scholarships. Treatment providers can provide more information on these offerings.

Finding Quality Care Within Your Budget

Cost can often be a barrier to getting effective treatment, and it is important to budget for quality care.

Intensive treatment generally costs more, with inpatient services being the most expensive. Outpatient treatment is often more affordable since it doesn’t require around-the-clock services. A step-down approach can be a great way to budget for care, as these programs allow you to move between levels of care as you progress through treatment.

The Substance Abuse and Mental Health Services Administration (SAMHSA) provides a Behavioral Health Treatment Services Locator tool to help you find addiction and recovery services near you. Trained professionals at an addiction treatment center can go over payment and financing options with you to help you get the most out of your care and figure out how to pay for it.

Resources for Free or Low-Cost Treatment and Support

If you don’t have insurance, you can access free or low-cost treatment as well as other sources of community support.

  • Medicaid: If you don’t have private insurance, fall below the federal poverty line (FPL) and, are a U.S. citizen, and/or suffer from a disability, you can qualify for federally and state-funded health care that can help pay for addiction treatment services.
  • SAMHSA’s national helpline: SAMHSA provides information and referral services to treatment and community-based programs that can provide public, free, and low-cost services.
  • State Department of Public Health: Your individual state’s public health office can provide information on local public treatment service providers that will generally provide resources for you even if you can’t afford to pay or don’t have any form of health insurance coverage
  • Alcoholics Anonymous: This 12-step program is supported by its members. It is free to join, and meetings are held around the world on a daily basis.
  • Community-based programs: There are often free and low-cost prevention services, referral resources, and addiction and recovery services provided by local nonprofit organizations. These groups are committed to improving local communities.

You Have Options

A lack of insurance or financial difficulty does not mean that you can’t get help for addiction and ongoing support in recovery. As you can see, there are many options to help you offset the cost of rehab.

Treatment providers can be great resources to help you figure out how to finance addiction treatment. Start the conversation today.

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