Tag: Obama Care

The Future of Insurance in the Rehab Industry

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.

rehab insurance

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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Major Changes

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.

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.

Evidence-Based Practices

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.

substance abuse insurance benefits

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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The End of Rehab?

The End of Rehab or the Start of a New Chapter?

As 2014 fades into the history books and 2015 looms right around the corner, we’re poised to see some major changes occurring in healthcare.

obamacare and rehab

Since its inception in 2008, The Affordable Care Act, better known as Obamacare, has shaken up the world of medicine. From its promise to insure every American to its promise of affordable copays and deductibles, the ACA has some big shoes to fill.

So far, with the exception of the temperamental Healthcare.gov website, Obamacare has done pretty well. It got rid of preexisting conditions. It expanded Medicaid coverage. Between 2013 and 2014, it’s estimated that 3.8 million people received health insurance thanks to the ACA. Estimate or not, that’s nothing to scoff at.

Okay, the Affordable Care Act has, generally speaking, brought positive change. What about addiction medicine, though? How does that factor into President Obama’s insurance overhaul? More importantly, why are some people proclaiming the end of rehab as we know it?

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How Obamacare Already Changed Rehab

In the brief two years it’s been around, Obamacare has already brought some major changes to addiction treatment. First and foremost, it got rid of preexisting conditions. This means that insurance companies can’t deny people coverage based on any illness they already have.

Today, substance use disorders are considered one of the ten elements of “essential health benefits.” Score one for addicts and alcoholics across the country!

Next, the ACA expanded parity rules. These are the rules governing how insurance companies cover mental illness and addiction treatment. This expansion took the form of the 2008 Mental Health Parity and Addiction Equity Act.

This law evened the playing field for addicts, alcoholics, and those with mental illness. Prior to this, deductibles, copays, and annual visits to treatment centers were held to a different standard than non-addiction medicine. After the law was passed, both the financial and treatment components of addiction medicine must be equal to any type of non-addiction medicine.

According to a 2013 estimate by the U.S. Health and Human Services Department, this expansion of parity rules will increase mental health and substance abuse benefits for as many as 31 million people. That’s a lot of people!

It’s plain to see that the ACA has already brought some significant change to how addiction is treated in America, but what does the future hold for Obamacare and rehab?

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How Obamacare May Change Rehab

Here’s where things start to get controversial. This is also when we leave the world of concrete facts and venture into educated guesses.

Now that substance use disorders fall into the category of essential health benefits, some sources suggest that rehabs will change how they operate. Kevin Kunz, the Vice President of the American Board of Addiction Medicine, is quoted as saying,

“We could put a ‘rehab’ center on every corner in America and it would not treat this problem…What will change it is the integration across health care of the knowledge this is an expensive in all ways, preventable and treatable illness” (from the KCRW site).

This “integration across health care” may take the form of treatment centers moving from spiritual and twelve-step modalities to a cut and dry scientific approach. It’s also thought that treatment will shift from specialty facilities to individual’s primary care doctors.

affordable care act and rehab

What’s cotton fever?

While there’s nothing wrong with incorporating science and spirituality, it’s sure to ruffle some feathers. After all, a spiritual and twelve-step approach offers some significant benefits. Consider that Alcoholics Anonymous has helped millions of men and women recover from addiction and alcoholism. Consider they boast a membership that’s upwards of two million people.

Now, what about the shift away from treatment centers in favor of primary care physicians? There’s nothing wrong with this on paper. In fact, it appears to offer some benefits. Primary care doctors know their patients, their patient’s family, and their patient’s history. They should be able to offer more insight than a doctor who knows nothing about a particular patient.

Sounds good…in theory. In practice, these general care doctors may not know enough about addiction to offer meaningful care. They haven’t been trained in addiction or mental health medicine. This could lead to things like overprescribing potentially dangerous medications (think Suboxone and the like) and misdiagnosing mental illness.

After all, what good is having access to addiction treatment if the treatment itself stinks?

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