Everything You Need to Know About Rehab Costs

Insurance Coverage for Mental Health Treatment

Does Insurance Cover Mental Health Treatment?

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.

Does Insurance Cover Eating Disorder Treatment?

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

• anorexia nervosa
• bulimia nervosa
• binge eating disorder
• avoidant/restrictive intake disorder
• pica
• rumination disorder
• other specified and unspecified feeding or eating disorders including:

1. muscle dysmorphia
2. orthorexia nervosa (ON) proposed criteria

Addiction Treatment Without Insurance

How Much is Rehab Without Insurance?

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:

• a personal loan from the bank
• personal loans from family and friends
• financing assistance directly from a treatment center, including scholarships
• paying via credit card

Can I get Drug Addiction or Mental Health Help Without Insurance?

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:

• state-funded or nonprofit rehabs for eligible individuals
• rehab grants and scholarships
• loans from a bank or family and friends
• payment via credit card

What can I do if My Insurance Doesn’t Cover Addiction 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:

• free or low-cost treatment for eligible individuals
• a personal loan from the bank
• personal loans from family and friends
• financing assistance directly from a treatment center, including grants and scholarships
• paying via credit card

What Happens if My Insurance Stops Paying for My Addiction Treatment?

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:

1. Internal appeal: Ask your insurance provider to conduct a full review of their decision. Make sure you fill out all forms requested by your provider to file an internal appeal. Include any items that may impact your case, like a letter from your doctor. You need to file an appeal within 180 days (6 months) of notice that your claim was denied. Most appeals are done in writing, but if your case is urgent you can do this over the phone. If your claim is still denied and you need to speed up the process, you can file for an external review.
2. External review: You can seek an external review by an independent 3rd party. In this case, you may have as few as 60 days to file a request for an external review. With external reviews, your carrier won’t get the final say over whether to pay a claim. That means your carrier is required to accept the external reviewer’s final decision. If your case is urgent, you might be able to file an external review at the same time as your internal appeal.

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:

• interest-free payment plans
• a rehab scholarship
• a discount for paying off your balance

What Happens if I Lose My Job and Insurance While Attending Residential Rehab?

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:

• your group health plan must be covered by COBRA;
• a qualifying event (such as employee termination) must occur;
• you must be a qualified beneficiary for that event; and
• you must opt-in for COBRA within 60 days from the date you lose 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.

40 states have health insurance continuation laws that offer similar rights as COBRA, sometimes referred to as “mini-COBRA.”¹⁵ These benefits extend to businesses that have 19 or fewer employees.

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 Coverage for Addiction and Mental Health

Does Medicare Pay for Substance Abuse Treatment?

Medicare can help cover substance abuse treatment in both inpatient and outpatient settings if you meet certain criteria:

• Your provider declares the services are medically necessary.
• You receive services from a Medicare-approved provider or facility.
• Your provider sets up your plan of care.

Inpatient Coverage:
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:

• $1,484 deductible
• Days 1 to 60: $0 coinsurance
• Days 61 to 90: $371 coinsurance per day of each benefit period
• Days 91 and beyond: You will start using your lifetime reserve days at a cost of $742 coinsurance each.

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.

Outpatient Coverage:
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.

Does Medicare Pay for Mental Health Treatment?

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:

• $1,556 deductible
• Days 1 to 60: $0 coinsurance
• Days 61 to 90: $389 per day for each benefit period
• Days 91 and beyond: You will start using your lifetime reserve days at a cost of $778 coinsurance each
• Beyond lifetime reserve days: you will need to cover all costs out-of-pocket

Out-of-pocket costs stay the same whether you receive care at a general or psychiatric hospital.

Browse our comprehensive list of rehabs and filter by price to find centers within your budget.

Reviewed by Rajnandini Rathod

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