Whitney Houston’s Death Underscores Complexities of Health Insurance for Rehab

By Gina Roberts-Grey

InsuranceQuotes.com

Almost every day, it seems, a celebrity enters rehab to kick an addiction to drugs, alcohol or both. Like so many other celebrities, singer Whitney Houston wrestled with drug problems. The music superstar died Feb. 12 after what appears to be an accidental overdose of prescription drugs.

Houston’s tragic and rocky relationship with drugs — prescription and otherwise — provides a fresh focus on drug and alcohol rehab and its costs. Houston, who reportedly underwent treatment for substance abuse three times, could afford her stints in rehab. But for thousands of other Americans, treatment for drug or alcohol abuse comes at a high price, even with health insurance.

Rehab costs thousands of dollars a month

The cost of drug and alcohol treatment varies based on the facility and the type of treatment (inpatient or outpatient). The average price tag runs $8,000 to $12,000 a month, says Lisa Lannon, co-founder of Journey Healing Centers, which runs drug and alcohol treatment facilities in Arizona and Utah.

Lannon says some health insurance policies may cover a portion of the costs for inpatient treatment for a minimum of 28 days. Others, however, may not cover inpatient treatment at all.

“I hope the recent tragic deaths of celebrities like Michael Jackson and Whitney Houston encourage lawmakers to reform the way health insurance treats addiction,” says Bill Ryan, a recovering prescription-drug addict from Illinois.

Ryan says he’s been “clean and sober” for more than four years.

“On top of dealing with the process of getting clean, I had to deal with mountains of forms and denials that eventually were reversed, and had to place dozens of calls,” Ryan says. “There were times when it felt like my insurance company was working against me instead of wanting me to get treatment.”

Lannon cautions against hoping that Houston’s death will prompt a change in the way substance abuse is covered by health insurance.

“While there have been changes regarding how doctors are being trained or learning about addiction and prescribing addictive medicines, the insurance companies won’t necessarily change the way they cover treatment for abuse because of a celebrity death,” Lannon says.

Laws improve insurance coverage

Since Ryan underwent treatment for substance abuse in late 2007, things have changed for the better. The Mental Health Parity & Addiction Act of 2008, which took effect in January 2011, improved coverage of drug and alcohol treatment under employer-sponsored group health insurance plans.

Shana Sweeney, a health benefits representative in San Francisco who previously worked for health insurance giant Aetna, says that before 2011, most insurance plans imposed limits of 10 to 30 days for treatment of substance abuse in both inpatient and outpatient settings. Despite the Mental Health Parity & Addiction Act, she says, hospitalization for substance abuse requires authorization from a health insurer. Furthermore, most insurance plans still exclude residential treatment, Sweeney says.

“Most plans do not cover the transition care between the round-the-clock inpatient hospital and the one- to two-hour visit with a counselor on an outpatient basis,” Sweeney says.

John Cerasani, president of Northwest Comprehensive Inc., an employee benefits consulting firm in Illinois, says that under federal health care reform, insurance plans can’t place dollar limits on substance abuse treatment. However, he says, many employer-sponsored plans have gotten around this by establishing a maximum number of treatment days or visits within a one-year span.

“Insurers often encourage this to help prevent abuse of coverage for substance abuse,” Cerasani says. “Oftentimes, employers are unsympathetic in thinking their health insurance coverage should fully cover people with substance abuse issues who are constantly in and out of rehab.”

What’s covered?

As it stands now, if a health insurance plan covering more than 50 insured employees offers mental health and substance abuse coverage, federal law requires that coverage to be on par with what’s offered for other maladies. Therefore, a group plan cannot offer less coverage for addiction than it does for conditions like cancer and diabetes, says Ankeny Minoux, president of the Foundation for Health Coverage Education, which helps Americans sort through their health insurance options. So, for instance, co-pays and inpatient treatment must be equal for substance abuse and other medical conditions.

Under the federal health care reform law, which was passed in 2010, substance abuse coverage got even better. Now, anyone with a health insurance plan that took effect on or after Sept. 23, 2010, must be covered for preventive services, including screening and counseling for alcohol abuse.

But experts say more progress is needed. Smaller group health insurance plans with fewer than 50 employees, as well as plans for people who are self-employed or unemployed, don’t have the same rules. Those plans can set different coverage limits for substance abuse from those for illnesses like cancer and diabetes. Several states, including Alabama, Arizona, Illinois, Florida and Utah, do not require health insurers to cover substance abuse treatment.

Not sure whether you’re covered for drug and alcohol treatment? Check your health insurance provider’s summary plan description, which you should have received when the policy went into effect. Your employer’s human resources department also should have this information.

What if you’re not covered?

Lannon outlines several options if you need treatment but your current health insurance doesn’t cover substance abuse or you don’t have insurance at all:

  • The federally created Pre-Existing Condition Insurance Plan. Available in every state, this coverage rivals that of private plans in terms of coverage and cost. One wrinkle: You must have been without health coverage for six months before you’re eligible.
  • State high-risk pools. This coverage varies by state. To be eligible, you typically must have been denied any health care coverage, had an insurer refuse to cover a condition like substance abuse, or had your health insurance dropped for reasons other than failing to pay premiums.
  • Medicaid. Coverage under this government program varies from state to state.
  • Federally run health care centers. The U.S. Department of Health and Human Services’ Health Resources and Services Administration offers a free online tool to find these centers, which treat substance abuse patients regardless of whether they carry insurance.
  • Negotiated rates. Lannon says many people who have little or no insurance can haggle with providers of substance abuse treatment to get price breaks. “Some facilities offer a sliding-scale fee based on your income,” she says.

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