In 2013, nearly 23 million Americans needed treatment for issues surrounding problematic drug and/or alcohol abuse; however, according to the National Survey on Drug Use and Health (NSDUH), just over 10 percent of these people actually received the care they needed in a specialized treatment facility.
The Affordable Care Act (ACA), or Obamacare as it is often called, was drawn up and passed into federal law by President Barack Obama in an attempt to increase healthcare coverage for more Americans. The U.S. Department of Health and Human Services (HHS) publishes that between the law’s passage in 2010 and early 2016, the ACA has provided health insurance coverage for 20 million previously uninsured Americans.
One of the provisions of the ACA, via the Mental Health Parity and Addiction Equality Act (MHPAEA), is that coverage for addiction and mental health concerns be treated the same as other medical and surgical procedures. This means that drug treatment must be covered by insurance in the same way that any other medical issue would be. With Obamacare, substance use disorders are classified as one of the 10 “essential health benefits” that must be covered equally under the law, the Office of National Drug Control Policy (ONDCP) reports. Obamacare insurance plans bought through health insurance exchanges or offered through Medicaid must therefore cover addiction treatment.
Using Health Insurance to Pay for Drug Treatment
Obamacare expands health insurance treatment to cover drug treatment and to provide treatment to individuals who may not have been able to afford it before. With Obamacare, Medicaid now provides federal (and/or state) health insurance coverage for individuals under age 65 who are at or below 133 percent of the federal poverty level (FPL), opening up coverage and eligibility for low-income Americans. Medicaid is income-based and ensures individuals receive free or low-cost healthcare.
While Obamacare is not mandatory, individuals who are deemed able to afford health insurance are required to have qualifying coverage or they will be faced with a tax penalty. Obamacare also has some limitations on coverage as drug treatment centers often only have a certain percentage of beds that can be filled by patients using Medicaid to pay for services. Public and federally funded facilities may fill up fast, and waiting times can be long for drug treatment funded by Obamacare as well.
Often, there are certain requirements and eligibility criteria that must be met in order for a person to use Obamacare insurance coverage to pay for drug treatment. Individuals may first need to be seen by a primary care provider for a referral, for example. Drug treatment may then need to be deemed “medically necessary” in order for it to be covered under insurance as well. Many insurance plans will require that an individual first attempt outpatient treatment and “fail,” before providing coverage for an inpatient program.How to use health insurance to pay for drug treatment depends on the type of insurance plan a person has. In general, health insurance works like so:
- A person makes an appointment with a provider and pays a copay upon receiving care. A copay is a small amount paid for each visit, usually around $15-$50 each time depending on the type of visit; emergency services generally cost more than preventative ones, for example. A referral for specialty services may be provided at this time for additional care and treatment. Due to parity, drug treatment services must be covered just like any other medical expenses.
- The provider bills the insurance company directly, and the individual may receive a bill later for any percentage of services not covered, called coinsurance. For instance, plans often cover 80 percent of services, and the individual will be responsible for the remaining 20 percent. There is usually an annual deductible amount as well, and people will be responsible for paying out of pocket for services until the deductible is met.
- Once a person reaches their annual out-of-pocket maximum cost, coverage usually kicks in at 100 percent for any remaining services. There is typically a limit on the amount and type of services allowed under the plan. For example, people may be allowed a certain amount of therapy or outpatient sessions each month or year and a specific number of days in an inpatient or residential facility.
- Services that are not covered, or exceed the coverage amounts, will need to be paid out of pocket, usually at the time the services are rendered. Before entering into drug treatment, families should work out a budget, understand costs, and determine how they will be paid for.
Depending on the type of health insurance plan and coverage a person has, there may be specifications as to which provider or facility a person can use to receive care that is covered. Some providers may offer services for a better rate for certain plans as well. Individuals are expected to keep up with monthly premiums, that is the cost for insurance coverage, in order to sustain coverage. With Obamacare, individuals may be eligible for a tax credit, or lower out-of-pocket costs for premiums, depending on their income level.
Professionals at drug treatment facilities can be very helpful when it comes to understanding what health insurance coverage is eligible for use on drug treatment services and how to apply it.
Types of Health Insurance Plans
Through the Health Exchange Marketplace, where Obamacare health insurance is bought and sold, there are four main categories of health insurance coverage and five main types of health insurance plans within these categories. The “metal” (Bronze, Silver, Gold, and Platinum) categories refer to the differences in out-of-pocket costs, percentage of services covered, and premiums. For instance, Platinum plans typically provide the most comprehensive level of coverage with the lowest out-of-pocket costs; however, the monthly premiums are higher. With a Bronze-level plan, the opposite is true; monthly premiums are lower, and coinsurance percentages and out-of-pockets costs are higher. These categories are only in reference to associated health insurance costs and not the quality of care provided.There are four main types of Obamacare health insurance plans sold on the Marketplace, and typically, each will offer all four of the metal tiers within these plans as well. Obamacare Marketplace health insurance plans include the following:
- Health Maintenance Organization (HMO): This type of plan usually requires a person to live or work within a certain area and to use providers that are considered in-network. Services are not usually covered if individuals use out-of-network providers except in the case of an emergency. Doctors and providers contract with the HMO to provide services at a lower rate for individuals utilizing this type of plan. Integrated care is often provided, and individuals choose a primary care provider who then helps to manage care and provide referrals to specialists when needed.
- Preferred Provider Organization (PPO): When using providers that are within the plan’s network, individuals will pay less; however, they do have the option of using an out-of-network provider without a referral and for a higher cost.
- Exclusive Provider Organization (EPO): Individuals must stay in-network for coverage to be provided with this type of plan.
- Point of Service (POS): With this type of plan, individuals pay less for in-network providers, and a referral is often needed for specialty services.
The fifth type of health insurance plan offered on the Marketplace are Catastrophic plans, which have low monthly premiums but very high deductibles and out-of-pocket expenses. Not everyone is eligible for these plans, and they are designed to cover individuals in the event of a serious health problem, while they are expected to pay regular medical costs out of pocket as they arise. Individuals may also use a Health Savings Account (HSA), which is a special account used to pay medical expenses for those who have high deductible health plans (HDHPs). Employers or individuals may put money into these accounts, which offer a tax break. Employers may provide health insurance coverage options for employees, or individuals and families may obtain coverage on their own. When health insurance is not offered through the workplace, individuals are required to obtain health insurance coverage in order to avoid a tax penalty.
Obamacare is meant to increase access to drug treatment for more Americans, treating mental health concerns and addiction as disorders that should be covered the same as other medical conditions.
Many addiction treatment facilities accept health insurance as payment for at least some of the services offered. Staff members at the treatment facility can help families understand drug treatment costs and how to use insurance and other methods to pay for them.
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