Insurance Coverage for Substance Abuse Improving But Still Limited

By Ed Finkel 07/15/15

Legislation is beginning to expand options for families of addicted youth, but significant gaps remain.


Davis Owen, 20, died of a heroin overdose on March 4, 2014. Six weeks earlier, he had finished 21 days in an inpatient treatment facility, and at the time of his death he was enrolled in a nine-hour-per-week outpatient program. 

His mother, Missy Owen, said the family had “very good insurance” with Aetna from her husband Michael’s job. But Owen’s coverage limited inpatient treatment for substance abuse to 30 days per year, “meaning that if in 30 days you’re not better, you can try again next year,” Owen notes wryly. 

The Owens also discovered that while the “medical” part of inpatient care was covered, “housing wasn’t covered, this wasn’t covered, that wasn’t covered,” Missy adds. “But yet the rehab package had to include all these other things.” So while the family’s insurance might have been “very good” in general, when it came to drug rehab coverage, “it was very, very sorry coverage,” says Missy Owen. 

Aetna says that while treatment of drug and alcohol abuse traditionally amounted to a 28-day inpatient or residential program, that has given way to an “array of treatment settings.” In a written statement sent by spokesman Matthew Clyburn, the company continued, “We understand now that treatment of alcohol and drug abuse is a process that occurs over time…A person’s need for each particular type of treatment is determined by their individual condition, not by pre-determined program duration. Treatment recommendations and coverage also vary based on each individual’s health plan.”

Aetna’s records, released after Michael Owen agreed to sign a HIPAA waiver, show that Davis Owen spent 15 days in inpatient treatment and then the family twice declined an intensive outpatient option. “We approved all 15 days of treatment because the level of care was appropriate,” Clyburn says. “When he was discharged, no additional days were requested or recommended by either the facility or the patient. We twice recommended an intensive outpatient program, but the patient declined.”

Missy Owen recalls the sequence of events slightly differently: She says Davis spent 21 days in the inpatient setting and then the family was next referred to a “three-quarter house.” In this scenario, her son would have been living on his own in an apartment for the first time ever, and the Owens would have been paying more than $2,000 in rent per month, plus buying furniture and other necessities. 

“You’re trying to decrease their stress, and now you’re putting them into this situation where they’ve never lived alone,” says Owen, who, with her husband, has since co-founded the Davis Direction Foundation to combat heroin abuse. 

Aside from refusing the three-quarter house, the Owens did not question whether Davis was receiving the right treatment and has not pursued litigation against the providers or health insurance companies involved, Owen says.

“I wasn’t fighting with the insurance company” over the 30-day limit, she says, confirming that piece of Clyburn’s account. “We were following what they told us to do…I was a very young addict’s mother. I didn’t know what I didn’t know…When they told me my kid was good to go in 21 days, I was like, ‘Thank you, Jesus.’ I had no idea.”

Michael Owen remembers being jubilant at the sight of his son at the end of his inpatient stint. “I was like, ‘Wow, I’ve got my son back!’” he says. “But unbeknownst to us, as soon as he got home, he was into the throes of his addiction, and trying to hide it and cover it up very well.”

Missy Owen has since learned that a month or less in a rehab center doesn’t do much more than get the drugs out of your system. “They’re not giving you any rehabilitation” in that length of time, she says. “Doctors and treatment centers are now saying in order to heal your brain from damage you received from opioids and heroin takes six months. That’s when treatment can begin. You need a year-long [inpatient] program, minimum. Insurance doesn’t cover that.”

She notes that her family’s policy with Aetna was not at all atypical. “Most of the insurance companies will give you 21 to 28 days [for inpatient services],” she says. And to pay out-of-pocket for this treatment, like most families, “You don’t have savings for those kinds of things,” she says. 

Insurance picture brightening—but still hazy 

In his final months, Davis Owen was one of approximately 21.6 million Americans—8.2% of those aged 12 or older—who were classified as having a substance use disorder in 2013, according to the State Health Care Spending Project. Of those, only 4.1 million, about 18%, received any treatment, the Spending Project says.

While this gap no doubt came in part because many who are substance-addicted are in denial (40.3%, according to the 2013 National Survey on Drug Use and Health), a second leading factor (at 31.4% in the national survey) is “an inability of people with substance use disorders to afford the cost of treatment, in part because of a lack of health insurance coverage.” 

This comes from a report from the Spending Project, which believes the recent legislation—the Mental Health Parity and Addiction Equity Act of 2008 and the Patient Protection and Affordable Care Act of 2010, aka Obamacare—is likely to improve the picture.

The pathway to the juvenile justice system is often littered with substance abuse, notes Judith Glassgold, associate executive director for governmental relations for the American Psychological Association. “A lot of kids get into criminal justice problems through behavioral or emotional issues,” she says. “You need to get at the root of the problem, where you can provide services. It’s really relevant in many ways to the juvenile justice system.”

Although Davis Owen never ended up in the system, his family’s struggles and frustrations are typical of those trying to get insurance for youth who are hooked on drugs. Yet for decades, only those wealthy enough to afford residential treatment centers had access to services because neither private insurance nor Medicaid provided any, or at least sufficient, coverage. 

And despite that recent legislation, the actual delivery of behavioral health care services remains spotty.

The Mental Health Parity and Addiction Equity Act mandated that health plans that cover substance abuse do so on equal footing with other types of diseases in terms of co-pays, deductibles, treatment limitations and other factors. But the act did not require coverage of substance abuse.

The Affordable Care Act then mandated coverage of mental health and substance abuse for both Medicaid and private plans offered on the state and federal health care exchanges. 

Employer-provided plans are not required to cover substance abuse and mental health, although “most large employers will offer some sort of mental health and substance abuse services,” Glassgold notes. 

Youth and young adults can get an expanded package of benefits under Medicaid due to ACA, and also can stay on their parents’ health insurance plans until they are 26, notes Maria Schiff, director of state health care spending at Pew. Most notably, Medicaid requires “early prevention screening detection and treatment,” referred to in the field as EPSDT. 

Benefits still "a little bit futuristic"

But struggles to actually obtain services remain, say providers and advocates. “I wish there were really easy answers...” says Becky Vaughn, vice president of addictions at the National Council for Behavioral Health. “Yes, things have changed quite a bit with the Affordable Care Act. The good things are still a little bit futuristic, but we’re moving in the right direction.”

Jeff Zornitsky, director of strategic initiatives with Advocates for Human Potential, a health-care consulting firm, says remaining challenges include continuing denials of coverage and provider shortages in some areas.  

"Doughnut hole"

Even with the Affordable Care Act in place, barriers remain, Vaughn agrees. While the law might say insurance coverage must provide access to services for adolescents, in rural areas in particular such services simply do not exist within a reasonable radius. And she sees a “doughnut hole” for college-age youth who don’t have access to on-campus services because adolescent providers don’t like to take anyone age 18 or older, while adult providers often don’t take anyone under age 21.

Given that employer-provided plans are not required to cover substance abuse, “It does pay for families to think about going into the exchanges instead of buying a plan outside the exchange,” Glassgold of APA adds.

Not all coverage is the same

For families like the Owens, Glassgold says, the ACA “has pretty robust processes for appealing the length or term of treatment. For group insurance through your employer, I would suggest folks approach their human resources or benefits departments to insure folks get the right services. 

“The challenge is, what is effective? You need robust, intensive outpatient services. The combination or step-down is really important...It’s important for people to advocate for themselves, to make sure they ask about medications, ask about outpatient care, try to find somebody very qualified.”

That’s partly because addiction is a very person-specific illness, she says. “It’s hard to find personalized treatment that fits the client best. It’s very important to shop around, find someone who is a good fit for the child and adolescent as well as the family.”

Groups like Alcoholics Anonymous or Narcotics Anonymous are also key, partly because they help to replace the social structure within which the patient became addicted in the first place, Glassgold says. “They provide social support,” she says. “We’re often asking someone to give up their friends, give up their habits. Finding peer mentors on how to interact differently is really, really important.”

“This is the only disease where the brain isn’t interested in getting well,” Vaughn adds. “It just wants more of that substance. The brain fights the person, every step of the way.”

Advice and Resources for Families

Top thoughts from providers and advocates for insurance coverage of drug abuse prevention and treatment for youth:

  • Recognize that you’re dealing with a medical issue—not a moral issue, says Michael Owen. “All the morals and values we had taught, they still mattered, but you somehow had to get beyond that with your child to get him to open up.” 
  • Primary care physicians or pediatricians can provide trusted referrals to behavioral health specialists, notes Zornitsky.
  • Talk to your insurance provider to find out how well you’re covered, Zornitsky says. They can also pass along names of providers, although you might prefer to ask your family doctor. Those on Medicaid can check with their federally designated Community Health Center to receive behavioral health services, he adds.
  • Even if your employer provides insurance, you might want to consider a plan on the federal or state health exchange because the latter are required to provide mental health and substance abuse coverage, Glassgold says. 
  • The ACA provides robust appeals processes for coverage denials, while those with employer-provided coverage can advocate for themselves with their human resources departments, Glassgold says.
  • Ask lots of questions about best practices in terms of treatments and medications and what’s being recommended overall for your youth, Glassgold says.
  • Youth under age 26 can stay on their parents’ health insurance policies under the Affordable Care Act, while those who are not can gain an expanded package of benefits under Medicaid, says Schiff.
  • State provider associations can help match people up, Vaughn says. And the Treatment Research Institute at the University of Pennsylvania has begun a Consumer Reports-like project to rate adolescent treatment providers. “Parents will have something to look at: How do I know what’s a good program?” she says. “It’s a matter of matching up the right kid with the right program. It is still a very difficult issue for many, many parents.”

Ed Finkel is a contributing writer for Youth Today. He is a writer, editor and Web content manager with 23 years of professional experience. 

This story was also published in Youth Today, a newspaper and website that covers the out-of-school time and youth service fields.

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Ed Finkel is a contributing writer for Youth Today. He is a writer, editor and Web content manager with 23 years of professional experience. You can find Ed on Linkedin.