Using Small Insurance Providers to Pay for Drug Treatment

Content Overview

How can I pay for drug treatment?

Most insurance policies, including those provided by small companies, will cover drug rehab, if specific conditions are met. Typically, people who want to use their insurance benefits must choose a provider approved by the insurance plan, and they must get a level of care that closely matches the addiction symptoms they have. It can seem complicated, but most addiction providers have fulltime staffers who are trained to parse insurance plans and provide enrollment assistance to people in need of help.

The decision to seek drug or alcohol addiction treatment is often a difficult one, complicated by the fact that some recommended treatments can be very expensive.

According to the National Institute on Drug Abuse, the therapies that are more likely to result in long-term recovery from addiction include methods that address medical, psychological, social, vocational, and legal challenges that the individual struggling with addiction faces.

Residential programs provide this detailed, inclusive treatment, but such programs are sometimes too expensive for the affected individuals to obtain without financial support. This is where insurance can come in, to help provide financial relief for those seeking treatment. However, if a person is unemployed or uninsured, or even if they have large company-based group insurance through an employer that doesn’t cover these treatments, there are still options, such as smaller insurance companies that provide temporary insurance or coverage through the Affordable Care Act (ACA) marketplaces and exchanges. These options are worth looking into if it means being able to get needed care.

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Insurance Options for Individuals

Most insurance policies will cover drug or alcohol addiction rehab, provided certain conditions are met. If individuals have insurance coverage through their employer or through Medicare or Medicaid, they should consult with their providers and check their policies to see what is included for medical detox, addiction treatment, and other therapies.

For those who do not have coverage for addiction treatment through their insurance, or for those who are unemployed or otherwise uninsured, there are ways to get affordable insurance through smaller insurance carriers or providers. Options include:

  • Supplemental fixed-benefit coverage
  • Temporary or short-term insurance
  • Public insurance options

What Are Small Insurance Providers?

Often, the companies that provide this sort of insurance coverage are smaller, state or local providers, rather than large national health insurance corporations. They are often independent, not-for-profit organizations committed to providing needed health care to local populations. Some provide both group and individual, or single family, healthcare plans, while others may also provide group plans for businesses. Some of the providers may be lesser known or smaller companies that do provide insurance nationwide.

For example, some of these companies include:

  • Rocky Mountain Health Plans in Colorado
  • HCC Medical Insurance Services nationwide
  • CCHP Health Plan in California
  • Arise Health Plan in Wisconsin

The key is that they are smaller, lesser-known companies than the major national firms that are more visible. The smaller firms are often focused on providing nonprofit health care coverage for local people. Because they are more locally focused, and because they are often not for profit, they are often able to offer plans that are more affordable and still provide the right kind of coverage.

Many times, these companies can be found by working with an insurance broker or agent in the state in question.

These services are often free. Help can also be found through the state’s ACA marketplace or exchange.

What Small Insurance Providers Cover

The challenge in using small insurance carriers to help pay for addiction recovery programs is that many types of insurance simply do not provide that benefit. As an example, short-term or temporary insurance is designed to protect the insured during emergency situations, not to cover typical healthcare, so these plans are unlikely to provide benefits that cover rehab treatment. As described by the insurance information resource eHealth, temporary insurance often excludes preventive care, pre-existing conditions, and maternity coverage.

Similarly, supplemental fixed-benefit insurance, such as a critical illness plan, will pay fixed amounts of money to help deal with a reported illness. However, many of them will not provide coverage for events that involve rehab or treatment for addiction.

For this reason, these types of insurance are not likely to be helpful in the case of drug or alcohol addiction recovery.

On the other hand, privately purchased major medical policies from small insurance companies can include coverage for addiction treatment. Even more certain are plans purchased through the ACA, which requires any plan sold through the exchanges or marketplaces to provide coverage of addiction and behavioral health care. As stated by the Office of National Drug Control Policy, treatment for substance use disorders is part of the “ten elements of essential health benefits” that must be provided through the law that governs the ACA.

Deductibles, Premiums, and Out-of-Pocket Costs

This is not to say that drug treatment through insurance plans from small providers is free. First of all, insurance is paid for by the customer through monthly premiums. These can vary widely in cost, depending on the level of services provided and the other costs that the customer agrees to pay. These additional costs include deductibles and copayments for services, among other items.

A deductible is an established amount that the customer must pay completely before coverage begins. Then, once the deductible is met and coverage is initiated, copayments are the part of the cost that the insured person covers.

Generally, the lower the deductible and copayments, the higher the premium. For example, a person with a $2,000 deductible and $25 doctor visit copayments is likely to pay a much higher monthly premium than a person who has a $10,000 deductible and a $50 copayment for a doctor visit.

Plans also may have out-of-pocket maximums during a calendar year, meaning that after a certain point, the plan will pay for everything.

This provides protection to the customer in case a major medical event occurs.

A study by the website HealthPocket found that not-for-profit health insurance plans may or may not have lower premiums than for-profit plans; however, they are more likely to have lower out-of-pocket maximums, which can help the insured handle higher costs of care, depending on the benefit. This should always be investigated when choosing a plan.

The Affordable Care Act

Small insurance providers are found in most states, and they are now often part of the state’s health exchange or marketplace program under the ACA. This increases the level of competition for insurance customers and has helped to lower prices. According to a study by the Commonwealth Fund, competition from small insurance companies has increased in states that have implemented the marketplaces and exchanges, helping to offer people lower prices for effective health care coverage.

Add to this the fact that the ACA requires addiction treatment coverage as one of the benefits of these plans, and that they may be less expensive or provide better out-of-pocket cost protection, and insurance through the ACA marketplaces or exchanges seems to provide a good option to help an individual or family afford the cost of addiction treatment centers and recovery programs.

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