Insurance & Rehab
The addiction treatment industry has always had a fraught relationship with insurance companies. In fact, it’s not uncommon to hear of individuals getting kicked out of residential treatment centers because their insurance simply won’t pay.
That being said, the relationship isn’t all bad. Insurance companies fill the vital gap between someone needing treatment and being able to afford said treatment. In many ways, the two industries are symbiotic.
In no time in history has this symbiotic relationship become clearer than the last number of years. With the changes the Affordable Care Act rolled out, insurance companies and rehabs are now tied at the hip.
I’ll touch on the A.C.A. below, but first I’d like to examine the history of insurance and rehab, as well as some of the common myths about substance abuse insurance. Before looking at either, though, it’s important to make a quick disclaimer.
At the end of the day, both insurance companies and rehab facilities are businesses. They both have financial burdens and limitations to keep in mind. It seems like both industries are either painted as lifesavers or evildoers, when the truth is a bit subtler. They reside somewhere in between, seeking to help the largest amount of people without going broke in the process.
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The History of Rehab Insurance
Health insurance, as we know it today, has only been around since the early to mid-1900’s. So, when we talk about health insurance, we’re really talking about a fairly modern phenomenon.
The relationship between insurance companies and addiction treatment is even younger. It wasn’t until the late 20th century that the two industries began interacting. Around this time, the 80’s and later, rehabs began to accept insurance. Prior to this, they’d operated on a fee-for-service model.
In today’s world, most rehab facilities accept insurance. Indeed, the majority of treatment centers in America receive a large amount of their revenue from insurance companies. It doesn’t come, though, without some struggle.
From almost the start, insurance providers would commonly deny coverage to individuals in treatment. While this could prove catastrophic, and in some cases it was, it’s not nearly as cold hearted as it sounds.
In fact, as insurance and treatment became increasingly intertwined, insurance companies found ways to help many individuals receive treatment, without having to raise their premiums.
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Denial of Coverage
The basic logic behind insurance providers denying an individual addiction treatment is that if they approved everyone for intensive levels of care, they’d have to raise their premiums, deductibles, and out of pocket expenses to unmanageably high rates.
While that sounds very money driven, with a focus on only the bottom line, it isn’t always. Think about it like this – if a major insurance provider raised their premiums and deductibles significantly, then fewer people would be insured. In turn, fewer people would be able to afford substance abuse treatment or other medical care.
So, the solution that insurance companies came up with was to approve patients for lower levels of care. Instead of sending someone to residential treatment for a month, insurance would offer a month of intensive outpatient treatment. Instead of paying for long-term (three plus months) of treatment, they’d offer outpatient and aftercare.
While this solution isn’t perfect, in fact it does marginalize many who desperately need inpatient treatment, it’s better than the alternative – having to pay treatment centers out of pocket.
Now that we’ve explored the relationship between rehabs and insurance companies, let’s examine some of the major changes which have occurred recently.
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There have been a number of large upheavals in the insurance and treatment industry as of late. Undoubtedly the largest was the introduction of the Affordable Care Act, better known as Obama Care.
With Obama Care, substance use disorders and mental illness were reclassified as essential health benefits. That means that any and all insurance plans must offer some form of addiction and mental health coverage.
Obama Care did a few other things for addiction treatment. It got rid of yearly limits for addiction of mental health coverage. It ensured that no one could be denied coverage because of any preexisting addiction or mental health condition.
Finally, and perhaps most importantly, Obama Care establish parity in terms of mental health and substance use disorder coverage. This means that the coverage, treatment, care management, and cost of mental health and addiction services can’t be more restrictive than for any other ailment.
To say Obama Care shook up insurance companies would be an understatement. Remember, we’re trying to move away from looking at insurers as evil, money hungry corporations. Still, with the introduction of these new regulations, insurance companies will be forced to cover more rehab than they’d like.
One of the unexpected side effects of the Affordable Care Act is the move away from “traditional” rehab care, which focuses on twelve-step principles, and towards something called evidence based practices.
Evidence based practices are simply treatments that have a firm basis in science. It’s worth noting here that the move away from twelve-step based treatments doesn’t mean they don’t work, it simply means that insurance companies are more interested in seeing care that can be quantified.
The Future of Rehab & Insurance
And here we reach the part of the essay where I give my thoughts on what the future holds for insurance companies, rehab facilities, and the relationship between the two. Unfortunately, I don’t know what the future holds.
It’s safe to say there will continue to be tension between treatment centers and insurance providers. Rehabs will always seek higher levels of care for their patients. Insurance companies will always look for lower levels of care. That much is certain.
What isn’t certain, though, is everything else. How will the Affordable Care Act impact substance abuse treatment in five years? Remember, it’s only been in effect for two years. It’s still too soon to gather hard data.
I predict, and this is nothing more than a prediction, that as addiction medicine moves more and more towards ultramodern treatment (like, for example, developing vaccines for various addictions), insurance companies will seek alternatives for traditional rehab.
I’m sure a once monthly treatment like a vaccine is more attractive to an insurance company than an everyday, recurring expense.
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