With the passing of the Affordable Care Act (more commonly known as Obamacare) in 2010, all insurance providers were mandated to provide coverage for treatment for addiction. Many people took this to mean that insurance would have to pay for all inpatient treatment for as long as the treatment provider deemed was necessary, but that isn’t the case. Since 2010, the treatment industry has grown to a $36 Billion industry with rapid increase in revenue fueled by the ACA mandate.
Seeing huge dollar signs, investors jumped into the treatment business and a couple large investment firms began buying up rehabs around the country. Now there are just a few very large players in the treatment industry, American Addiction Centers and Hazelden Betty Ford being two of the largest. Both have locations around the country and both have made tens of millions. Both tell potential patients/clients that their insurance providers will pay for their treatment; perhaps at 100%, but in reality there are usually significant out of pocket costs for inpatient treatment. This leaves patients with bills that can range into tens of thousands of dollars, that they are left to pay long after they’ve left the treatment program and are trying to rebuild their lives.
As the cost of insurance has risen, many providers now have high deductibles and co-pays that must be met, and even after those are met the average insurance provider will only pay a percentage of the remaining bill and patients are left to pay the difference. Some insurance providers will only pay for the initial medical detox portion of treatment which may be only 3-7 days. This makes sense as withdrawal from certain substances can be a serious medical problem; and in some cases it is life threatening. With these insurance providers, patients who were told by the treatment provider upon intake that their insurance would cover the full cost of their treatment, are subsequently discharged when their detox is completed which may be as short as 3 days. If they want to stay for the “rehab” portion of their stay, they must pay for that out of pocket or they are sent home.
If you have a life-threatening illness such as cancer or heart disease, while cost and insurance coverage may be a factor in choosing a healthcare provider, it will likely not be the sole determining factor in what treatment you choose. You will most likely place heavier weight on the efficacy of that treatment and if it will actually provide a solution or cure to your illness. In these cases you will seek a treatment provider that will help you to meet your medical goals. This is not the case for addiction treatment. If you are going into the hospital for surgery whether routine or even emergency surgery, if you have insurance, you are told up front what your out-of-pocket expenses will be. But in the addiction treatment industry, this is not the case at all. Far too many times the treatment you’re provided has far more to do with how much you and your insurance provider are willing to pay, than what kind of treatment and how much of the treatment is needed to help you.
Want to avoid this treatment financial trap? Ask your addiction treatment provider to put in writing what your out-of-pocket costs will be prior to enrolling in their treatment program. If they won’t, buyer beware.