The short answer is that many insurance plans cover rehab for addiction and mental health treatment, but benefits vary by insurance plan, level of care, and determination of medical necessity. How much of your rehab costs insurance covers depends on factors like in-network status, deductibles, copays, and whether your plan covers inpatient and/or outpatient services.
Mental health parity laws and the Affordable Care Act (ACA)
Insurance can make evidence-based treatment options accessible and affordable so patients can focus on recovery instead of money.
For this reason, the federal Mental Health Parity and Addiction Equity Act requires many plans to treat mental health and addiction treatment no more restrictively than medical or surgical treatments. The Affordable Care Act expanded access by making many substance use and mental health services an essential health benefit in individual and small-group plans.
Parity and ACA rules influence coverage, but each provider still has unique guidelines. To know exactly what your plan covers, be sure to verify your benefits before admission.
Private insurance and rehab
Under federal parity law, most employer and marketplace plans must treat addiction and mental health treatment as essential health benefits. Private insurance plans often cover inpatient or outpatient care when deemed medically necessary. Prior authorization or step therapy may apply, and deductibles and coinsurance can affect costs.
Public insurance and rehab
Medicaid often covers addiction treatment and mental health services, but eligibility and benefits vary by state. Washington and Oregon have broad SUD coverage through state networks.
Medicare can cover mental health and substance use treatment services, including inpatient and outpatient care, when criteria are met. Benefit periods, settings, and provider networks can affect coverage and costs.
Use FindTreatment.gov to locate public-network providers.
Factors that affect insurance coverage for rehab
Primary factors include:
- Plan and network: HMO vs. PPO; in-network vs. out-of-network
- Which settings your plan covers, such as inpatient, outpatient, detox, and aftercare
- How much of your deductibles you have met, your copay amounts, and coinsurance rates
- Prior authorization and medical necessity requirements
Commonly covered rehab services
Rehab can include a wide variety of services. Depending on the type of insurance, you may be covered for some or all of these:
- Inpatient or residential treatment programs: Intensive 24/7 care for stabilization and therapy
- Outpatient treatment options: Partial hospitalization programs (PHPs) and intensive outpatient programs (IOPs) that allow you to live at home.
- Medical detoxification services: Medically supervised withdrawal support
- Counseling and medication management: Individual, group, and family therapy for substance use and co-occurring mental health disorders
- Aftercare and relapse prevention programs: Continuing care, alumni support, or case management
Explore our addiction treatment programs for more information on levels of care. We offer medical detox and residential care in Camas and Long Beach, WA. PHP and IOP are available at our treatment center in Portland. We do not accept Medicare or Medicaid. We do accept most major private insurance, and we verify insurance before you start so you know what you’ll pay.
State-by-state rehab insurance variation
Medicaid benefits, marketplace rules, and oversight differ from state to state, which can change what a plan covers and affect your costs. Some states have robust parity enforcement and strong coverage, while others have tighter utilization controls.
FAQs about rehab and insurance coverage
What are the steps to verify coverage?
Call your insurance provider and ask about in-network rehab, deductibles, copays, coinsurance, pre-authorization, and how many days your plan covers. Have the rehab provider confirm coverage and explain your benefits and estimated costs for their program.
What do I do if my claim is denied?
Request the reason in writing, then appeal within the deadline. Ask your referring clinician to document medical necessity and provide supporting records. Your provider can also request a peer-to-peer review with the insurer.
Why do insurance providers deny rehab?
The most common reasons include lack of medical necessity, no pre-authorization, out-of-network providers, or non-covered levels of care.
Is addiction treatment a medical expense for tax purposes?
Many rehab costs are considered medical expenses. For tax guidance, see IRS Publication 502 and consult a tax professional.