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The Difference Between Insurance and Private Pay Drug Rehabs

Information on what differentiates drug rehab centers that accept PPO or HMO insurance plans versus those that only accept out-of-pocket private payments

Most licensed residential & outpatient drug rehabs and treatment centers work with at least a few of the major health insurance providers nationwide.  Examples of such companies would be; Blue Cross/Blue Shield, Aetna, Pacificare, Humana, Kaiser Permanente, Cigna, United Healthcare and several others.  In most cases clients with PPO plans will have many more options than those with HMO plans.

Most health insurance providers have very stringent standards and are extremely tight with their payouts when a client requires treatment services.  As a result, it is quite rare that one’s health insurance coverage will cover the cost of rehabilitation in its entirety.  In most cases there is a standard deductible or copayment required upon intake that can range anywhere from several undred to as much as several thousand dollars.  Beyond that, it may also be the case that your health insurance provider caps out at a certain monthly or annual payout and thus, any residential or outpatient treatment center charges above that mark are the client’s responsibility.

The real question remains, in a scenario of a treatment center only accepting private payments versus one that contracts with health insurance providers, which tends to offer a higher and/or more effective level of care?  The truth is, that when it comes to things like drug addiction, alcoholism, substance abuse and dual-diagnosis issues, so many variables exist that it’s difficult to truly assess which treatment center is in fact more or less effective.  What we can say, however, is that facilities charging higher rates or solely funded through private pay clients have more flexibility and thus, typically offer a broader array of both, clinical as well as non clinical services.  Private pay rehabs often have expanded holistic and ancillary components like yoga, pilates, personal training, private coaching, naturous activities and so on.  All this is of course in addition to primary elements like group & private therapy, counseling, relapse prevention, etc.

Health insurance companies always have what are termed “contracted rates” which means that they pay far less for the same program that the client would otherwise spend on an out-of-pocket basis.  A drug rehab charging 22 thousand dollars per month for non insurance clients might only receive half that amount from the provider of an insurance pay client.  Whether or not the client has the ability or is required to make up the difference is entirely on a case by case basis.

In the final analysis, there is no set equation as to determining the effectiveness and success rates of drug rehabs accepting health insurance versus those that don’t.  One word of caution though, if a facility does not accept any type of health insurance provider it is extremely important that you verify their state licensing during your initial inquiry.  While some addiction & alcoholism treatment centers are fully licensed yet opt to not accept insurance in lieu of their elite, high-end environment, others will commonly avert licensing restrictions and operate as a “recovery environment” as opposed to a bona fide “treatment center” which means they essentially have no governing body being held accountable to.


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