Does Insurance Cover Drug & Alcohol Rehab?

Yes — health insurance covers drug and alcohol rehab. Under federal law, specifically the Affordable Care Act (ACA) and the Mental Health Parity and Addiction Equity Act (MHPAEA), all health insurance plans sold through the ACA marketplace must cover substance use disorder treatment as an essential health benefit, at the same level as other medical conditions. This represents a dramatic shift from before 2010, when many insurance plans excluded or severely limited addiction treatment coverage.

Federal Laws Requiring Insurance Coverage for Rehab

Two major federal laws govern addiction treatment coverage:

The Affordable Care Act (ACA) — 2010

The ACA, also known as Obamacare, revolutionized addiction treatment access by designating substance use disorder services as one of 10 essential health benefits that all marketplace plans must cover.

What the ACA requires:

Substance use disorder services must be covered, including:

• Screening, assessment, and diagnosis
• Outpatient services (individual and group therapy)
• Intensive outpatient programs (IOP)
• Partial hospitalization programs (PHP)
• Inpatient and residential treatment
• Medical detoxification
• Medication-assisted treatment (MAT)
• Recovery support services

No annual or lifetime limits on behavioral health benefits

Essential health benefit status means addiction treatment can’t be excluded or treated as optional

Impact: Before the ACA, an estimated 34 million Americans had no coverage for substance use disorder treatment. After the ACA, virtually all marketplace plans cover comprehensive addiction treatment.

Mental Health Parity and Addiction Equity Act (MHPAEA) — 2008

The MHPAEA, enacted in 2008 and strengthened under the ACA, requires parity — equal treatment of mental health/substance use disorder benefits and medical/surgical benefits.

What parity means:

Financial requirements must be equal:

• If your plan has a $2,000 deductible for medical care, it can’t have a $4,000 deductible for behavioral health
• If medical care is covered at 80% after deductible, rehab must also be covered at 80%
• Copays for therapy can’t be higher than copays for other specialist visits

Treatment limitations must be equal:

• If your plan doesn’t limit number of hospital days for surgery, it can’t limit inpatient rehab days
• Prior authorization requirements for addiction treatment can’t be stricter than for medical care
• Step therapy and fail-first requirements must be comparable

Quantitative limits (numerical) and qualitative limits (non-numerical, like medical necessity criteria) must both meet parity standards

Impact: Parity enforcement has dramatically reduced insurance denials and limitations on addiction treatment. Many insurers previously capped inpatient rehab at 30 days per year or required multiple failed outpatient attempts before authorizing residential care — practices now prohibited under parity laws.

Who These Laws Apply To

Marketplace plans (ACA exchanges): Must comply with both ACA and MHPAEA

Employer-sponsored plans (large employers, 50+ employees): Must comply with MHPAEA

Medicaid managed care: Must comply with both ACA and MHPAEA

Medicare Advantage: Must cover substance abuse treatment

Exceptions: Some grandfathered plans (purchased before March 2010) may have limited coverage. Small employer plans and self-insured plans have some flexibility, though most comply with parity.

What Insurance Covers for Rehab

All ACA-compliant plans cover the full continuum of care for substance use disorders:

Medical Detoxification

Coverage: Medically supervised withdrawal management Typical coverage rate: 60-80% after deductible (PPO plans) Duration covered: 3-14 days based on medical necessity Substances: Alcohol, opioids, benzodiazepines, stimulants — all covered

Detox is considered medically necessary for substances with dangerous withdrawal (alcohol, benzodiazepines) and dramatically improves outcomes for other substances. See detailed medical detox costs by substance.

Inpatient/Residential Treatment

Coverage: 24/7 residential care in treatment facility Typical coverage rate: 60-80% after deductible (PPO), often higher for HMO Duration covered: Varies; typically 7-14 days initial authorization, extended with concurrent review Preauthorization: Required by all carriers

Carrier-specific details:

• Aetna: 1,800+ facilities, 60-80% coverage
• Blue Cross Blue Shield: 2,000+ facilities, varies by state company
• Cigna: 1,900+ via Evernorth, broad network
• UnitedHealthcare: 2,200+ via Optum, largest network
• Humana: 1,400+ facilities, strong Medicare Advantage
• Kaiser Permanente: Integrated model, copay-based
• Molina: Medicaid focus, $0 copays
• Oscar Health: Tech-forward, 800+ facilities

Partial Hospitalization Programs (PHP)

Coverage: Intensive day treatment 6+ hours daily Typical coverage rate: 70-90% after deductible Duration covered: Based on medical necessity, typically 2-4 weeks Step-down: Often used as transition from inpatient to outpatient

Intensive Outpatient Programs (IOP)

Coverage: Structured treatment 9-15 hours weekly Typical coverage rate: 70-90% after deductible Duration covered: Typically 8-12 weeks Use: Primary treatment or step-down from higher levels

Outpatient Therapy

Coverage: Individual and group counseling Typical coverage rate: 80-90% after deductible Copays: $25-$75 per session (varies by plan) Limitations: Rarely have visit limits under parity laws

Medication-Assisted Treatment (MAT)

Coverage: All FDA-approved medications Medications covered:

• Buprenorphine (Suboxone, Sublocade, generic)
• Methadone (via opioid treatment programs)
• Naltrexone (Vivitrol injection, ReVia tablets)
• Acamprosate (Campral)
• Disulfiram (Antabuse)

Typical copays with insurance:

• Generic buprenorphine: $10-$75/month
• Brand Suboxone: $25-$150/month
• Vivitrol injection: $50-$250/month

Parity impact: Many insurers previously required prior authorization for MAT, creating barriers. Parity enforcement and opioid crisis response have led most insurers to remove or reduce prior auth requirements for buprenorphine.

Learn more about treatment types and costs.

PPO vs. HMO vs. EPO: Coverage Differences

Your plan type significantly affects addiction treatment access and costs:

PPO (Preferred Provider Organization)

Network: Broad national network Out-of-network: Covered at reduced rate (typically 50-60%) Referrals: Not required Preauthorization: Required for inpatient/residential

Best for: Maximum flexibility in facility choice

Typical out-of-pocket for 30-day inpatient: $6,000-$22,000

Carriers with strong PPO networks:

• Aetna PPO
• Cigna Open Access Plus
• UnitedHealthcare Choice Plus

HMO (Health Maintenance Organization)

Network: Regional network Out-of-network: Not covered (except emergencies) Referrals: Often required from PCP Preauthorization: Required

Best for: Lower premiums, don’t need out-of-network

Typical out-of-pocket for 30-day inpatient: $5,000-$17,000

Example: Kaiser Permanente HMO — integrated model with copay structure

EPO (Exclusive Provider Organization)

Network: Similar to PPO Out-of-network: Not covered (except emergencies) Referrals: Not required Preauthorization: Required

Best for: PPO convenience without out-of-network costs

Typical out-of-pocket for 30-day inpatient: $5,500-$18,000

Example: Oscar Health EPO — tech-forward approach

Medicaid Managed Care

Network: Must use in-network Out-of-network: Generally not covered Referrals: Varies by state Copays: Typically $0-$5

Best for: Income-eligible individuals (up to 138% FPL in expansion states)

Typical out-of-pocket for 30-day inpatient: $0-$100

Example: Molina Medicaid — operates in 15 states

Preauthorization: How It Works

Nearly all insurance plans require preauthorization for inpatient and residential treatment. Understanding the process helps avoid surprises:

Step 1: Assessment

Before authorization, you need clinical assessment showing:

• Diagnosis (substance use disorder type and severity)
• ASAM level of care determination
• Why chosen level of care is medically necessary
• Treatment plan and goals

Step 2: Authorization Request

Who submits: Treatment facility’s utilization review department (not you)

What’s submitted:

• Clinical assessment
• Medical history
• Previous treatment attempts
• Current substance use patterns
• Co-occurring conditions
• Psychosocial factors (housing, employment, family support)

To whom: Your insurance company’s behavioral health division

• Aetna → Aetna Behavioral Health
• Cigna → Evernorth Behavioral Health
• UnitedHealthcare → Optum Behavioral Health
• BCBS → Varies by state company

Step 3: Medical Necessity Review

Insurance reviews using ASAM criteria (American Society of Addiction Medicine), evaluating six dimensions:

1. Acute intoxication/withdrawal potential — Need for medical detox
2. Biomedical conditions — Medical complications
3. Emotional/behavioral/cognitive conditions — Mental health
4. Readiness to change — Motivation
5. Relapse/continued use potential — Risk factors
6. Recovery environment — Support system, living situation

Step 4: Authorization Decision

Timeline:

• Urgent requests: 24-48 hours
• Standard requests: 3-5 business days

Initial authorization: Typically 7-14 days

Concurrent review: Every 3-7 days during stay, facility provides progress updates

Step 5: Continued Stay Reviews

Insurance doesn’t authorize entire stay upfront. Concurrent reviews determine if continued stay remains medically necessary based on:

• Progress toward treatment goals
• Clinical stability
• Appropriateness of current level vs. step-down
• Evidence-based treatment planning

State-Specific Protections

Some states restrict preauthorization:

New Jersey: Prohibits prior authorization for first 28 days of substance abuse treatment

Other states: Various parity enforcement and prior auth limitations

Check your state insurance department for specific protections.

How to Verify Your Insurance Covers Rehab

Before entering treatment, verify your specific coverage:

Step 1: Call the Behavioral Health Number

Important: Use the behavioral health/mental health number on your insurance card, not main member services

Examples:

• Aetna Behavioral Health: 1-800-424-3627
• Cigna Behavioral Health: 1-877-622-4327
• UnitedHealthcare/Optum: 1-855-204-4058
• Blue Cross Blue Shield: Varies by state company

Step 2: Have Information Ready

• Member ID number
• Group number (if employer plan)
• Facility name and location you’re considering
• Your date of birth

Step 3: Ask Specific Questions

Network status:

• “Is [facility name] in-network for my plan?”
• “What is the negotiated rate with this facility?”

Financial responsibility:

• “What is my individual deductible for behavioral health?”
• “How much of my deductible have I met this year?”
• “What is my coinsurance percentage for inpatient behavioral health?”
• “What is my out-of-pocket maximum, and how much have I met?”
• “Do I have a separate behavioral health out-of-pocket maximum?”

Coverage specifics:

• “Does my plan require preauthorization for inpatient treatment?”
• “What’s the preauthorization process and timeline?”
• “How many days will be initially authorized?”
• “How often does the insurance company conduct concurrent reviews?”
• “Are there any annual limits on inpatient days?”

MAT coverage:

• “Does my plan cover medication-assisted treatment?”
• “Which MAT medications are covered (buprenorphine, methadone, naltrexone)?”
• “What are the copays for MAT medications?”
• “Is prior authorization required for MAT medications?”

Step 4: Get It in Writing

Request written confirmation of benefits, including:

• Reference number from call
• Name of representative
• Date of verification
• Coverage details discussed

Step 5: Have Facility Verify

Most facilities offer free benefits verification:

• They call your insurance
• Get detailed breakdown
• Provide estimated out-of-pocket costs
• Identify any coverage issues before admission

This is often easier than self-verification since facilities navigate insurance processes daily.

What to Do If Insurance Denies Coverage

Despite parity laws, insurance sometimes denies coverage. You have appeal rights:

Internal Appeal (First Level)

Timeline: File within 180 days of denial

Process:

1. Request internal review from insurance company
2. Submit additional clinical documentation from treatment team
3. Include letters from treating physicians explaining medical necessity
4. Request peer-to-peer review (physician-to-physician discussion)

Response time: 30 days for standard appeal, 72 hours for urgent

Success factors:

• Strong clinical documentation
• Evidence of ASAM criteria satisfaction
• Demonstration that denialis parity violation
• Previous failed treatment attempts at lower levels of care

External Review (Second Level)

When: If internal appeal is denied

Process:

1. Request external review through independent review organization (IRO)
2. IRO reviews case independently
3. Decision is binding on insurance company

Response time: 60 days for standard, 72 hours for urgent

Cost: Free to you

File Parity Complaint

If you believe denial violates mental health parity:

Federal level:

• U.S. Department of Labor (for employer plans)
• U.S. Department of Health and Human Services (for marketplace plans)

State level:

• State insurance department
• State attorney general (some states)

Legal Options

For systematic parity violations, consider:

• Insurance attorney consultation
• Class action lawsuits (some states have active litigation against insurers for parity violations)

Special Insurance Situations

COBRA Coverage

What it is: Continuation of employer coverage after job loss

Coverage: Same benefits as when employed

Cost: You pay full premium (employer share + your share) plus 2% admin fee

Duration: 18 months (longer in some circumstances)

For rehab: If you need treatment after job loss, COBRA maintains your existing coverage. Expensive but may be cheaper than self-pay for one month of intensive treatment.

Student Health Insurance

Coverage: Required to meet ACA standards if school participates in federal student aid

Typical coverage: Full continuum of SUD treatment

Consideration: Some student plans have limited networks; verify facility is in-network

Medicaid

Eligibility: Income-based (up to 138% federal poverty level in expansion states)

Coverage: Comprehensive with minimal cost-sharing

Out-of-pocket: Typically $0 for treatment

State variation: Benefits vary by state Medicaid program

Learn more: Molina Medicaid coverage example in 15 states

Medicare

Original Medicare: Covers substance abuse treatment with 20% coinsurance

Medicare Advantage: Often better behavioral health coverage with copays instead of coinsurance

Part D: Covers MAT medications

Learn more: Humana Medicare Advantage

Tricare (Military)

Coverage: Comprehensive substance abuse treatment for active duty, retirees, dependents

Cost-sharing: Varies by Tricare plan type

Network: Must use authorized providers

Veterans Affairs (VA)

Coverage: Comprehensive for veterans with VA benefits

Cost: Typically no cost for service-connected conditions

Access: Must use VA facilities or VA-contracted providers

What If You Don’t Have Insurance?

If you’re currently uninsured, obtaining coverage is often the most cost-effective path:

ACA Marketplace

Open enrollment: November 1 – January 15 annually

Special enrollment periods: 60 days after qualifying life events:

• Loss of other coverage
• Marriage or divorce
• Birth or adoption
• Relocation

Subsidies: Available for incomes 100-400% of federal poverty level

How to enroll: Healthcare.gov

Medicaid

Eligibility: Income up to 138% FPL in expansion states (39 states + DC)

How to apply: State Medicaid office or Healthcare.gov

Coverage start: Often same day or next month

Expansion states: Check Healthcare.gov for current list

Other Options Without Insurance

Treatment facility financial assistance:

• Sliding-scale fees
• Payment plans (6-24 months)
• Scholarships/grants

State-funded treatment:

• Community mental health centers
• County substance abuse programs
• State-operated facilities

Costs: Free or low-cost based on income

Limitations: Often waitlists, fewer amenities

Finding programs: SAMHSA National Helpline 1-800-662-4357

Insurance Specialist Consultation

A licensed insurance specialist can help you:

• Navigate ACA marketplace enrollment
• Determine Medicaid eligibility
• Identify qualifying life events for special enrollment
• Compare plan networks for addiction treatment
• Understand subsidy eligibility

Sources

• Healthcare.gov. “Mental Health and Substance Use Disorder Coverage.” 2026.
• Centers for Medicare & Medicaid Services. “Mental Health Parity and Addiction Equity Act.” 2024.
• U.S. Department of Labor. “Mental Health Parity Fact Sheet.” 2024.
• Substance Abuse and Mental Health Services Administration (SAMHSA). “Insurance Coverage and Treatment Access.” 2024.
• National Alliance on Mental Illness (NAMI). “Understanding Mental Health Parity.” 2024.
• Kaiser Family Foundation. “Mental Health and Substance Use Disorder Coverage in the ACA Marketplace.” 2025.