The American Medical Association (AMA) classified alcoholism (alcohol use disorder) as a disease in 1956, but it took them until 1987 to classify substance addiction (substance use disorder) as a disease. Before these classifications, insurance companies did not cover the costs of addiction treatment programs. Even after the classifications, it has taken decades for insurance companies to sufficiently cover addiction treatment.
The Affordable Care Act (ACA), which passed in 2010 and was implemented in 2014, expanded mental health and substance use disorder benefits and federal parity protections for 62 million Americans. The ACA was designed to make health insurance coverage more affordable and inclusive, including covering pre-existing conditions and addiction treatment.
What is the ACA?
The ACA combines the Patient Protection and Affordable Care Act with the Health Care and Education Reconciliation Act of 2010. These were signed into law in 2010 under the one name, The Affordable Care Act or ACA. Although passed in 2010, the ACA was fully implemented in 2014 and expanded health care coverage for individuals, families, and small businesses who previously could not afford it.
Prior to the ACA, not only did insurance companies exclude mental health and rehabilitation, but many Americans with pre-existing conditions — such as diabetes, cancer, Parkinson’s, and even pregnancy — would not qualify for individual health insurance. For those with pre-existing conditions who did attempt to get health care coverage, a 2016 Kaiser Family Foundation study estimated that “18% of individual market applications were denied.” According to the survey, in 2016, 52 million American adults under the age of 65 had pre-existing conditions. Without the ACA, if these adults did not have health care coverage through an employer or Medicaid, they would likely not have been able to get individual coverage.
The Basics of the ACA
The ACA is a health care reform program to ensure more comprehensive health insurance for Americans. To educate the public and facilitate enrollment, the ACA created the Health Insurance Marketplace, a resource for individuals, families, and small businesses looking for affordable health care plans. The Marketplace, available on HealthCare.gov, has tools to help evaluate if an applicant is eligible for health care tax credits, to compare plans offered by various insurance companies, and to enroll in a health care plan.
According to HealthCare.gov, “All plans must cover:
- Behavioral health treatment, such as psychotherapy and counseling
- Mental and behavioral health inpatient services
- Substance use disorder (commonly known as substance abuse) treatment”
HealthCare.gov further clarifies that “plans can’t deny you coverage or charge you more just because you have any pre-existing condition, including mental health and substance use disorder conditions.” Additionally, these plans may not place dollar limits on what are considered to be 10 essential health benefits. As listed on HealthCare.gov the 10 essential health benefits include:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Mental health services and addiction treatment
- Prescription drugs
- Rehabilitation services and devices
- Laboratory services
- Preventive services
- Pediatric services
ACA requires parity between medical benefits, including surgery, and the benefits for mental health and substance use disorder. In other words, benefits must be equal for medical treatment and behavioral health treatment. This new standard of coverage includes protection for costs, including restrictions on deductibles and out-of-pocket expenses, limits on the number of days or visits, and care management.
In order to meet these parity requirements, insurance policies may deny coverage for substance use disorder treatment if it is not found to be medically necessary. According to the Surgeon General, there remains some controversy over what qualifies as a medically necessary treatment.
What If My Plan Doesn’t Meet the Parity Requirement?
If you believe your policy does not meet the ACA’s Parity requirement, MentalHealth.org suggests you verify the exact coverage outlined in your policy materials to double-check the coverage levels for the plan’s benefits. Even though health insurers are required to provide a plan summary that is easily understood, you may still need to contact your insurer or outside experts for assistance.
Three helpful resources are:
- Mental Health and Addiction Insurance Help
- Consumer Assistance Program for your state
- Know Your Rights: Parity for Mental Health and Substance Use Disorder Benefits available on the Substance Abuse and Mental Health Services Administration website.
Will Medicaid or Medicare Pay for Addiction Treatment?
The quick answer, is yes, both Medicaid and Medicare provide some level of coverage for substance use disorder. Each state determines its Medicaid services coverage for adults, which often includes counseling, medication, support groups, and substance use disorder treatment. The Children’s Health Insurance Program (CHIP) provides its beneficiaries with full benefits. To be sure about the coverage provided in your state, visit the Medicaid page for behavioral health services.
Medicare provides a variety of services broken into three categories: Hospital, Medical, and Prescriptions.
- Medicare A covers the inpatient services received during a hospital stay.
- Medicare B coverage provides assistance with outpatient care, such as visits to a psychiatrist’s office, visits with social workers and counselors, and any lab tests required.
- Prescription drugs are covered by Medicare D.
If your health coverage is provided through Medicare C, a Medicare Advantage Plan such as an HMO, or a PPO plan provided by a private insurance company, it’s important to verify the coverage by checking the plan’s website or calling to find out about mental health and substance use disorder benefits.
Do the ACA Requirements Apply to Private Insurance?
The ACA stipulations apply to private insurance companies as well as plans on the state-run marketplaces. Therefore, all insurance companies must offer coverage for mental health and substance use disorder services that is generally comparable to coverage for medical and surgical care.
Health insurance companies have a variety of policies, so each plan offers different coverage amounts for medical, mental health, behavioral, and addiction treatments. Check your plan’s materials, the company website, or call the company’s customer care center to verify the levels of coverage for mental health and addiction treatment.
Check with Your Preferred Facility
While health insurance companies do cover some of the cost for addiction recovery programs, patients should also research if their specific insurance plan includes the center or facility they wish to use. Similar to the coverage for doctors and specialists, the agreements health insurance companies have with treatment centers will vary with each plan, including the length of stay permitted.
Improvement is Still Needed
Since its implementation in 2014, the ACA has succeeded in increasing the number of Americans with health care coverage. For example, in 2013, 16.8% of adults under sixty-five were uninsured, compared to 10% in 2016.
Despite the significant reforms in health care provided by the ACA, coverage is not yet perfect. Uninsured adults report that the cost of insurance is still too high, and the 2017 National Survey on Drug Use and Health found that the most common reason that adults with mental illness did not seek treatment was cost. In that same survey, 13.1% of insured adults said their insurance did not cover enough of the cost of their treatment.
An additional complication is the capacity to meet the growing need for treating substance abuse disorder. In 2014, the year the ACA was fully implemented, the Baldwin Research Institute reported that in 2012, “23 million Americans needed treatment for an alcohol or drug problem,” however, “only about 11% received” the necessary treatment. The gap between the number of Americans with substance use or addiction issues and the number of available treatment programs continues to widen.
Although there is room for improvement, the current situation is an improvement over a decade ago. Acknowledging mental health illness and substance use disorder as diseases was an important first step. The next step is to reduce the gap between substance use treatment and the number of Americans in need of help.