Learn / Everything You Need to Know About Rehab Costs
Cost is a major concern for people seeking addiction and mental health help. Thankfully, getting professional help for addiction is possible even without health insurance or lots of money in the bank.
Seeking help for addiction and mental health issues pays off in the long run and can ultimately end up saving you money in total healthcare costs. The U.S. National Institute on Drug Abuse (NIDA) reports that the total savings of addiction treatment can exceed costs1 by a ratio of 12 to 1. At the same time, concerns over the cost of rehab might still prevent many people from taking the step to enroll.
This guide takes you through everything you need to know about rehab costs, paying for addiction and mental health treatment with and without insurance, and medicare coverage.
Insurance Coverage for Addiction Treatment
Insurance Coverage for Mental Health Treatment
Addiction Treatment Without Insurance
Medicare Coverage for Addiction and Mental Health
It depends. There’s a huge variety of treatment options, levels of care, and therapies for alcohol or substance abuse, making it difficult to pinpoint a standard price for addiction treatment.
The most common levels of care include detox, inpatient (residential rehab), and outpatient programs. Each offers a different mix of intensiveness, clinical hours with staff, and time spent on-site, which affect total program costs.
We break down what you can expect to pay for different levels of care, including the price range for low-cost to high-end options. This information is curated from research articles and rehab centers directly.
For many people, detoxification is the first step in addiction treatment. Detox is the process of substances leaving your system. This often requires the management of withdrawal symptoms that may follow. You can detox at several different types of facilities at different price points. Keep in mind that detoxing from certain substances requires higher levels of clinical care, which influences final costs.
Inpatient Programs (Residential Rehab)
Inpatient programs offer the highest level of care and often cost more than other program options. In an inpatient program, you live onsite at a treatment facility for an extended period and receive daily care.
Outpatient Program Costs
Outpatient programs allow you to go home each day after treatment. Most outpatient programs still offer an intensive therapy schedule, but without the complete immersion and facilities access you receive at residential rehabs.
There are nonprofit substance abuse and mental health treatment agencies in the U.S. that offer addiction treatment scholarships to individuals who can’t afford it or don’t have insurance. Usually, they offer some form of payment assistance or a sliding fee scale, which means fees are based on your ability to pay.
Government-Funded Rehab Programs
Government-funded rehab programs also offer no-cost to low-cost treatment. To be eligible for these programs, you have to meet certain criteria and will likely be asked to provide proof of citizenship, residence, income, and other personal information. To get more information about qualifying for these programs, SAMHSA’s Directory of Single State Agencies3 offers a list of local contacts who oversee government-funded rehabs in each state.
Addiction Treatment for Veterans
Veterans can enroll in free addiction treatment programs in their state,4 provided by the Department of Veteran’s Affairs (VA) Alcohol and Drug Dependence Rehabilitation Program.
Level of Care
Rehab programs offer varying levels of care. The most common programs include detox, inpatient programs (also known as residential rehab), intensive outpatient programs (IOPs), and partial hospitalization programs (PHPs). They differ in whether you receive around-the-clock care for an extended period at a treatment facility (inpatient/residential rehab), or go home following treatment (outpatient and PHP).
Treatment Program Length
Treatment costs often correlate with the length of your program. The longer the program, the higher the costs. Inpatient rehab programs are usually 30, 60, or 90 days.
The location of a rehab can impact costs. Rehabs located in pricier cities like Malibu often come with a higher price tag. Rates are also likely to increase in more desirable settings, such as by the beach or in the mountains. If you don’t have insurance, traveling abroad for addiction treatment may be less expensive than treatment in the U.S., due to lower operation costs. Countries like Indonesia and Thailand, for example, have rehab programs at a fraction of the cost of rehabs in the U.S.
Added services can increase the cost of rehab. These include detox, complementary therapies, medication-assisted treatment (MAT), aftercare, and more. Some treatment centers offer these as optional “add-ons” for an extra cost.
Types of amenities offered can impact final treatment costs. Higher-end or luxury rehabs may provide amenities like a fully equipped gym, pool, lounge area, and a business center.
Mental health treatment costs can vary greatly. That’s because different mental health issues require different levels of care, treatment lengths, and therapies.
In an inpatient program, you live on-site at a treatment center and have access to 24/7 clinical support. Because inpatient programs offer higher levels of care, they often cost more than outpatient programs. In the U.S., inpatient programs for treating mental health issues range from $3,000 to over $80,000.
A sober living home (sometimes called a therapeutic community) is a supervised facility that residents stay in after their addiction treatment program is over, before they transition back into their daily lives. The goal is to offer a structured living environment and accountability for lasting sobriety after a formal treatment program.
The cost of a comfortable sober living home can be comparable to rent, plus administrative fees. Location will also influence final costs.
To give you an idea of costs, you can find a number of sober living homes at around $500 to $700 per month in pricier states like California. This can go all the way up to $10,000 and up at sober living facilities operated by luxury rehab centers. At that price point, you can expect more treatment and therapies than at traditional sober living environments.
Most private health insurance policies in the U.S. cover the costs of substance use disorder treatment.7 Depending on your policy, your carrier might cover some or the entire cost of treatment. Providers are likely to cover a greater portion of the costs for treatment centers that are within their network versus out-of-network centers.
Since the Affordable Care Act (ACA) was passed, there’s now even greater coverage for substance use disorder treatment. Still, several privately insured individuals don’t know whether their plan covers addiction and mental health rehab.
It may seem difficult to understand all the benefits of your insurance plan, but it’s useful to do so, to make sure you’re taking advantage of them. A good place to start is to call your insurance provider and check the details of your plan with a customer service agent. You can also get more information about insurance coverage details from a rehab center admissions specialist.
Since the passing of the Affordable Care Act in 2010, most rehab centers accept insurance in addition to providing multiple payment options. Your insurance provider may cover a majority of treatment costs, depending on your plan and whether the center is within their network. Insurance for addiction treatment is usually on a case-by-case basis and is influenced by several factors including the level of care you need, your policy, your medical history, and more. It’s best to check directly with your insurance carrier and someone from a rehab center’s admissions team about whether your policy covers treatment costs and to what extent.
The Affordable Care Act included substance use disorders8 and mental health services as an essential health benefit in 2014. That means today, most private health insurance policies in the U.S. cover substance use disorder treatment.
Still, because there are numerous treatment plans for different types of substance use disorders, it’s hard to point to one “best” insurance policy for addiction treatment.
One way to find out if an insurance policy is a good fit for your situation is to talk to a rehab admissions specialist to understand what type of treatment plan you may need. You can then speak to different insurance carriers to see how well their coverage policy matches your treatment needs.
Some questions to ask insurance companies include:
Yes, you can. But keep in mind that before your policy is active, health insurance providers will not cover any portion of your treatment expenses. This means you’ll likely have to pay out of pocket for any treatment received before your policy start date.
If you need to receive treatment before your policy is active, some rehabs offer their own financing options or scholarships or work with a 3rd-party lender to offer affordable loan packages. You can speak to an admissions advisor about ways to pay for treatment before your insurance policy is active.
Any kind of medical illness or injury that you’ve had before your insurance policy start date is considered a pre-existing condition. However, insurers can no longer deny coverage or charge extra for pre-existing conditions. This includes coverage for mental health issues or substance use disorders.
A majority of individual and small group health insurance plans cover some level of treatment for mental health and substance use disorders.
The Affordable Care Act declared that these plans must adhere to laws under the Mental Health Parity and Addiction Equity Act (MHPAEA).9 An important clause in MPHAEA is that coverage for mental health services can’t be more restrictive than coverage for medical or surgical services.
If you have an employer-sponsored health insurance policy that includes mental health and substance use disorder services, which many plans do, they are subject to MPHAEA laws.
Since every individual’s mental health background and treatment path varies, it’s best to check directly with your insurance provider regarding your plan’s benefits and coverage levels.
Some, but not all private health insurance, covers eating disorder treatment.
If your insurance company offers coverage for eating disorder treatment, they’ve likely established a set of guidelines that will impact your level of coverage. These guidelines are usually called “level of care guidelines” or “medical necessity guidelines.”
Oftentimes, you need to meet your insurance company’s “medical necessity” requirements in order to receive coverage for inpatient programs or partial hospitalization programs specifically for eating disorder issues. Factors that play into these requirements can include your weight, vital signs, medical history, and more. Since health insurance companies can be strict about you meeting certain requirements, you should speak directly with a customer service agent about your policy and ask them about their guidelines, if they have any.
Insurance plans that do offer eating disorder benefits typically cover the following feeding and eating disorders, as listed in the DSM-5:10
This depends. Rehab program costs can vary greatly and are influenced by factors like the level of care you receive, program length, the location of the center, and services and amenities offered.
You can find low-cost rehab programs at around $3,500 per month. On average, inpatient rehab programs cost between $4,000 to $13,000 for a 30-day program. If you have private insurance, many plans cover treatment for mental health and substance use disorders, bringing down your out-of-pocket expenses.
For people without insurance, you can cover rehab expenses using different financing options:
Yes, you may get substance use disorder or mental health help without insurance.
If out-of-pocket treatment costs are a concern, an admissions team member can help provide more information on choosing a health insurance plan or point you towards any financial assistance they may offer.
If you meet certain requirements like income criteria, you may qualify for free to low-cost addiction and mental health treatment.
You can also find various financing choices for treatment:
A majority of private health insurance policies in the U.S. cover substance use disorder treatment.11 Some policies provide treatment coverage only at centers that are within their network. Before you take the steps to look for a new plan, you should check your current plan’s benefits with your insurance carrier first. It’s possible that your plan already covers a portion of substance use disorder treatment costs.
If your policy doesn’t cover addiction treatment, you can purchase a new plan. Prior to canceling your insurance plan, keep in mind that you can’t simply enroll in a new one whenever you want. In most states, open enrollment for health insurance plans runs from November 1st until December 15th,12 and coverage starts January 1st.
There are also different financing solutions available directly with an addiction treatment center or through other avenues:
You can appeal their decision. This can happen through two formal avenues: an internal appeal conducted directly with your carrier or an external review by an independent third party.
If your insurance stops paying for your addiction treatment, you can take the following steps to make your case:
Step 1. Speak directly with a representative from your insurance provider to understand why your treatment isn’t covered. In some cases, insurance companies process claims incorrectly. The burden falls on the insured person to follow up with their provider and make sure no mistakes were made in processing their claim.
Step 2. If your health care plan denies all or parts of your claim, they’re legally required to notify you in writing within 30 days for any medical services you’ve received. In urgent care cases, they need to notify you within 72 hours.
You can request for your insurer to provide you with all the information regarding their decision. They must also provide information on the names of any Consumer Assistance Programs (CAPs)13 in your state. These programs can assist you with filing an appeal.
Step 3. Formally appeal the decision. You can do this through two channels:
Step 4. If the steps above didn’t work, you may be able to bring down treatment costs by working directly with your addiction treatment provider. Someone from your provider’s finance department can help you examine your options, for example:
Most group health plans are required to offer temporary insurance coverage for a limited time.
The Consolidated Omnibus Budget Reconciliation Act (COBRA)14 requires a majority of employers who provide health insurance to offer temporary continued coverage to employees who have been terminated for reasons other than gross misconduct. Most group health plans must offer continued coverage from the date of the qualifying event for a limited period of 18 to 36 months. During that time period, you have the same level of coverage that you did under your group health care plan prior to losing your job.
Who’s eligible for COBRA continued coverage?
The following qualifies individuals for COBRA continued coverage:
COBRA applies to a majority of private-sector employees with a minimum of 20 employees, state and local governments’ health plans.
Note that your employer may require you to pay for continued COBRA coverage. However, premiums can’t exceed the full cost of coverage plus a 2% administrative fee.
COBRA doesn’t apply to me. Do I have alternatives?
Yes, you do.
On top of that, you have the right to special enrollment under the Health Insurance Portability and Accountability Act (HIPAA).16 To switch health insurance plans, individuals typically need to wait for enrollment season (this is often between November and December each year). Under HIPAA, if you lose your job, you may be eligible to enroll in other plans without waiting for enrollment season. You need to request special enrollment within 30 days of losing your job-based coverage. After that, you need to choose a plan within 60 days after losing your job-based coverage.
Medicare can help cover substance abuse treatment in both inpatient and outpatient settings if you meet certain criteria:
Medicare will cover inpatient substance use disorder treatment for up to 90 days per benefit period after you’ve paid your deductible and coinsurance costs.17 A benefit period begins when you’re admitted into a program and ends 60 days after you haven’t received any inpatient care.
You’ll need to pay coinsurance costs during each benefit period:
Medicare offers 60 “lifetime reserve days,” or additional days of inpatient hospital coverage during your lifetime. Once those 60 reserve days have been used up, any time you exceed 90 days of inpatient treatment in a benefit period, you’ll need to cover treatment expenses yourself for the number of days you went over during that period.
Medicare Part B can help cover costs for outpatient alcohol and drug addiction treatment from a private center, hospital, outpatient department, or opioid treatment program. This can include any medications prescribed as part of your treatment plan.
Original Medicare, otherwise known as “traditional Medicare,” refers to the Medicare plan a majority of the population is enrolled in. Almost all hospitals and doctors accept Original Medicare. Original Medicare covers outpatient treatment for substance use disorders at 80% of the Medicare-approved amount. You’ll pay 20% coinsurance after meeting Medicare Plan B deductibles, only if you receive treatment from a participating provider.
Medicare Advantage, sometimes referred to as “Medicare Part C” or “Medicare Private Health Plan,” has to do with private health plans contracted by the government. If you have Medicare Advantage, you’ll need to contact your plan directly to learn more about your coverage for outpatient addiction treatment services.
Partial Hospitalization Program (PHP) Medicare Coverage:
If your doctor verifies that you need over 20 hours of therapeutic services per week, Medicare may cover a portion of your partial hospitalization program costs.18 You’ll pay a percentage of the Medicare-approved amount for PHP and coinsurance for each day of PHP services you receive in an outpatient setting.
Yes. Medicare Part A covers inpatient treatment in a general hospital or psychiatric hospital setting. Usually, your healthcare provider will point you towards the right setting for your needs.
Once you’ve settled your deductible for each benefit period ($1,556 in 2022), Medicare will cover inpatient mental health treatment for up to 90 days per benefit period.
With Original Medicare, you’ll need to pay for the following:
Out-of-pocket costs stay the same whether you receive care at a general or psychiatric hospital.
Reviewed by Rajnandini Rathod
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