How Obamacare Is Killing AA’s Membership

By Matthew Leichter 09/15/14

Under Obamacare, insurance will only pay for evidence-based treatment. Consequently, rehabs are eliminating 12-step groups in favor of harm reduction and other statistically strong methods.


There is a section of the Affordable Care Act of 2008 called the Mental Health Parity and Addiction Equity Act. The Mental Health Parity Act of 2008 requires that insurance pay equally for mental and addiction treatment as  general medical treatment. It ensures that if a person requires a 30-day inpatient program, insurance must pay for it.

On the surface, the Mental Health Parity and Addiction Equity Act looks extremely promising for those in the rehabilitation industry and perhaps a return to the glory days of the 1980s where 30-day inpatient drug rehabilitation was the norm. Alcoholics Anonymous very heavily depends on drug treatment centers as one of their main gateways for new membership and nearly 100% of drug rehabilitation programs treat patients with the Alcoholics Anonymous abstinence-based model. In fact, Steve Slate in his article, It’s All Twelve-Step – So Stop Talking About Science Already discusses that 98.6% of all rehabs in the United States are at least in part 12-step oriented with 78.8% directly using the 12-Step Facilitation Model.

Counting AA’s Membership: Historical Trends and Controversy

Alcoholics Anonymous uses a self-reporting system to count membership along with surveys to randomly assigned people to gather demographic information. Consistency within Alcoholics Anonymous reporting exists on the group level. Group establishment must go through a rigorous process of displaying staying power over time before being considered an official group of AA. Once a group is established, membership within a group is then reported as a group estimate of those who are regular attendees or “homegroup members.” This number is vastly overstated in most cases because many people who sign up for a homegroup fail to show up or drop out of AA without reporting. A lag of six months or more can exist before a group removes a member from its roster. This system, therefore, gives accurate reporting of groups in existence and not so accurate reporting of actual membership. 

Many people have mistakenly claimed that in 1992 Alcoholics Anonymous saw its peak in membership and if we are to take these numbers at face value that is most certainly the case. Alcoholics Anonymous has a report of yearly membership and groups since its inception. However, these numbers do not add up with any mathematical consistency. From year to year, if we divide the number of members by the number of groups, on average, we see a value ranging from 18 to 22 members per group. This value significantly changes in the years 1990 to 1993. Values ranged in these years from 23 members to a whopping 28 members per group in 1992. It is simply unreasonable to believe that nearly 750,000 members showed up for those years and then suddenly dropped off the map without any new groups reporting in those years.

If we compare these values to a more consistent statistic of 19 members per group per year, however, we find those years where membership reporting was inflated. We also see some other interesting trends in the data. First, AA membership most likely did not peak in 1992, what actually occurred is the rate of membership began to diminish. According to the trend of actual group count, however, AA continued to see added membership up until 2008. It is possible based on the current trend that AA actually peaked in 2008. In fact, from 2000 to 2008, AA saw an average group count increase of 1,785 groups per year. However, from 2008 to 2011, the latest AA survey published shows an actual loss of 676 groups per year. For the past six years, AA has seen a smaller group count than they did in 2008. This is the first time in AA’s history that they have shown a consistent loss of actual group count which can then imply a significant loss in membership. As a relative value of comparing membership from year to year, it is clear that group count is much more consistent than actual membership reported. 

Health Insurance and Historical Trends in AA

The rate of membership in Alcoholics Anonymous, and group count, has been shrinking over the past 20 years primarily due to health insurer’s resistance to paying for drug treatment admissions. Insurance has reverted to detox-only for inpatient, usually resulting in an average seven or more days for a form of outpatient treatment. After a few returns to detox, the health insurance industry refuses to pay for treatment altogether. The reduction of the rate at which Alcoholics Anonymous gained membership can be graphed as a direct correlation to the amount of inpatient dollars the health insurance industry was spending.

In 1992 there was a significant change in the healthcare industry where a majority of insurance companies began to place people in HMOs and began a serious crackdown on insurance payments. The first in line to go was addiction treatment, due to the high cost and low efficacy. The gradual decline in insurer’s refusal to pay for addiction treatment has been a constant trend all the way up to the Affordable Care Act of 2008. Relative to the American population, which saw an increase of 20% over the past 20 years, Alcoholics Anonymous’ numbers did not increase at the same rate. At an estimated 2.1 million members, which we know to be inflated, AA is now showing a relative decline in membership of 16% in comparison to the growing US population. That’s a serious drop in numbers over the last 20 years. 

The Mental Health Parity Act of 2008 and the Final Rule

So the rehabilitation industry is in trouble. Big trouble. The recent Hazelden-Betty Ford merger should be a big clue as to how much trouble they are in. When Betty Ford had to merge with Hazelden just to survive under the new healthcare law and switch its treatment primarily to outpatient care, it shows how vulnerable the industry is. As the stats show, as the rehab industry goes so does AA. 

Originally, the Mental Health Parity Act gave rehabilitation medical practitioners hope that access to their facilities would increase under the law. The problem is a part of the law called the Final Rule, which most of the industry missed when making their initial projections. The Final Rule states that all treatment must be evidence-based medicine. This means that the treatment applied must be proven to work and the level of treatment must be in accordance to what is deemed necessary by scientific studies. Unfortunately for 12-step methods of treatment, it means that insurance can and will flat out refuse to pay for inpatient 12-step facilitation simply because it is not proven to be effective.

In light of this new rule, it is no wonder that Hazelden quickly switched to adding naltrexone to its treatment model. What this means is that the 12-step model in treatment centers must now take a backseat to actual evidence-based medicine or insurance will refuse to pay for it. How bad is it? Cigna has refused 47% more inpatient treatment claims than general inpatient treatment claims citing a lack of evidence-based treatment. United Healthcare under the new law has also significantly increased their denials of addiction treatment. Both insurance companies ended up in class action lawsuits over the issue (Cigna settled). The law is still being tested in court and the debate will continue simply because inpatient treatment using the Minnesota Model or Alcoholics Anonymous is simply not proven to be effective. This, while seeming bleak to many Alcoholics Anonymous proponents, is encouraging to those who promote evidence-based medicine. The American Mental Health Counselors Association hailed the Final Rule as a serious step forward for addiction medicine. 

Ironically, the anonymity of Alcoholics Anonymous may be its own demise. As the law requires proof of 12-step treatment effectiveness, AA has traditionally resisted any direct involvement in studies. The same follows for 12-step rehabs. Many do not publish their efficacy most likely because it isn't encouraging. As the law requires evidence-based treatment for drug and alcohol addiction, many rehabs will be forced to switch to an evidence-based model, at least in part, in order to survive. This could be a very harsh awakening to Alcoholics Anonymous which previously saw the majority of treatment centers as private facilities that promoted their philosophy and encouraged their membership. Consider the statistics of drug and alcohol treatment admissions from the Substance Abuse and Mental Health Administration in comparison to the group count of Alcoholics Anonymous. It is undeniable seeing the two datasets together that they are correlated (see chart above) and the drop in admissions is staggering since 2008. In fact, the number of drug treatment admissions has fallen below the level of admissions in 2000. This means 2012 marked the lowest rate in drug treatment admissions for the past 12 years. 

The majority of drug treatment denials have been on the basis of “medical necessity.” John T. Seybert, Esq. and Edward Stump, Esq. of the American Bar Association define medical necessity in their article, Will the Mental Health Parity and Addiction Equity Act of 2008 Successfully Encourage Employers to Provide Benefits for Inpatient Mental Health Treatment? They also clarify why health insurance is now no longer paying for non-evidence based treatment:

“Most insurance companies, however, will not provide coverage for residential treatment for mental illness or addiction unless the services are deemed ‘medically necessary.’ In general, a plan defines ‘medically necessity’ as ‘accepted medical practice or community standards of care; not for the convenience of the patient or provider; not experimental or investigational; and appropriate and effective.’”

The essential problem is that inpatient care has not been proven to be more effective than outpatient care and 12-step based models have not proven any efficacy at all. The prestigious Cochran review did a comprehensive study in 2006 and found no conclusive evidence that 12-step facilitation gave any results more favorable than no treatment. This does not bode well for inpatient treatment facilities that depend on health insurance for survival.  

As a result of this law, evidence-based medicine will become the forefront of addiction treatment in America. As admissions to treatment facilities are significantly dropping, drug treatment centers will be required to change their model to a more evidence-based approach in order to receive payment from insurance. As the number of admissions to 12-step facilities continues to drop, Alcoholics Anonymous’ membership will also continue to drop. The result of this single rule in the Mental Health Parity Act has been a profound change in the way insurance now supports addiction medicine. At the rate we are currently moving, this one line in the Obamacare law may very well be the death of the 12-step movement.  

Matthew Leichter is a writer based in Baltimore, Maryland. He is a published healthcare statistican and epidemiologist currently pursuing a doctorate in epidemiology from Capella University and has worked as an epidemiologist for Humana, Blue Cross Blue Shield, IMS Health, Cognilytics, and Walgreens.

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Matthew Leichter is a writer based in Baltimore, Maryland. He is a senior statistician, and lead epidemiologist for the financial and healthcare consulting firm Cognilytics, LLC. He can be found on Linkedin and Twitter.