By insurance to pay addiction treatment

With the passing of the Affordable Care Act (more commonly known as Obamacare) in 2010, all insurance providers were mandated to provide coverage for addiction treatment. Many people took this to mean that insurance would have to pay for all inpatient treatment for as long as the treatment provider deemed necessary, but that isn’t the case. Since 2010, the treatment industry has grown to a $40 Billion industry with a 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 left 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 of dollars since the mandates. 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, so too have deductibles and co-pays. Even after those are met, the average insurance provider will only pay a percentage of the remaining treatment bill leaving patients and their families to pay the rest.  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 a heavier weight on that treatment’s efficacy 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. 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 before enrolling in their treatment program. If they won’t, buyer beware. And if you’re going to be making a financial investment in addiction treatment, it’s a good idea to ask them about their long-term success rates. Sadly almost no treatment providers keep track of their success rates, and many will admit that the best you can hope for is 20% success, with as many as 80% of their treatment patients going back to heavy use within a year post-treatment.

Here is some good news; 90% of people who fit the criteria for addiction get over the problem, and most do so without treatment. So the odds are heavily in your favor that you can get over your substance use problem on your own and move on with your life.

Crossposted with Liberty Hub


Michelle Dunbar is the co-author of The Freedom Model for Addictions: Escape the Treatment and Recovery Trap and The Freedom Model for the Family. She is the Executive Director of the Saint Jude Retreat. If you or someone you know is struggling with a substance use problem, there is an empowering solution that has proven to be three times more effective than addiction treatment and twelve times more effective than 12 step meetings. Go to for more information or call 888-424-2626.

insurance to pay addiction treatment