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Addiction Treatment and Insurance Coverage: Know Your Options

By Neha Kashyap
Medically Reviewed by Arpan Parikh, MD, MBA on August 02, 2021
Addiction treatment can be complicated with or without insurance, but there are many resources available to those seeking financial help.

Addiction recovery can be a lifelong effort, and getting adequate insurance coverage for the process can be a challenge. While most insurance plans are required to cover mental health treatment, getting coverage for addiction treatment can get complicated. It's important to know what is covered,and where to go when insurance doesn't meet treatment needs.

Does Insurance Cover Addiction Treatment?

Affordable Care Act (ACA) plans, Medicare and Medicaid are all required to provide mental health coverage, which includes some addiction recovery services.

The initial phases of recovery, including detoxification, are usually covered for at least two weeks. After that initial period, some outpatient services can be covered. However, it usually depends on diagnosis, cost and frequency of treatment sessions.

Targeting the mental health issues underlying an addiction could be an important factor when seeking insurance coverage for addiction treatment. Experts say conditions like depression are more likely to be covered.

“While insurance is likely to cover a residential stay for someone who is being admitted for the first time or demonstrates continued medical need, it will more likely approve the less expensive options,”  Matt Glowiak, PhD, a licensed therapist in Brooklyn, tells WebMD Connect to Care. “For this reason, many professionals find themselves listing a mental health diagnosis as the primary and substance use as a secondary.”

A dual diagnosis might also help with addictions that aren’t normally covered by insurance. And it might help to be open to alternative therapy options, like community counseling centers that charge on a sliding scale, experts say.

“Right now, many insurance companies are trying not to pay for treatment for addictions to cannabis, tobacco, vaping, gambling, pornography and video games,” Dr. Irene Little, a family therapist in Frisco, Texas, said. “Some providers are forced to either find a different diagnosis or refer to interns or counselors willing to provide a sliding scale fee.”

What Can I Do If My Insurance Doesn't Cover Addiction Treatment?

According to Jennifer Musselman, a California-based psychotherapist, it's important that patients and their families advocate for themselves through appeals and referrals if coverage is denied.

“Push for a peer review, in which one of the clinicians at the treatment center talks to the insurance company doctor, so they’re both speaking the same language,” Musselman said.

When it comes to treatment centers, scholarships might also be available, and it's important to ask for referrals if appeals are denied, according to Musselman. Support groups like Alcoholics Anonymous can also help with the long-term costs of addiction recovery. And the options don't stop there. Community resources for addiction treatment can include everything from charities to local public assistance offices.

“In Texas, there is assistance through Texas Workforce Commission for individuals who are under-employed or unemployed due to substance abuse and mental health disorders,” Dr. Little said. “There are organizations like Salvation Army, Soul's Harbor and Cenikor where you work and live there and the treatment is included.”

Life After Treatment: General Information