A Glossary of Terms for Insurance Coverage for Substance Use and Addiction

Navigating the treatment system when your son or daughter has an addiction is unfortunately incredibly complex, and often is the most complex when it comes to insurance. Use the glossary below to ensure that you can have successful conversations with your insurance company to help your child get the help he or she needs to begin recovery:

Coinsurance

A financial (cost-sharing) requirement imposed by a health plan whereby a patient must pay a certain percentage of the total cost of health services. For example, a 30 percent coinsurance means that if a bill for health services is $1,000, then the health plan will pay $700 and the patient must pay $300.

Copayment (aka copay)

A financial (cost-sharing) requirement imposed by a health plan whereby a patient must pay a set amount when receiving health services (e.g., $25 per doctor’s visit or $100 per admission to a hospital).

Cost-sharing

The amount a patient has to pay for health services that are covered by the health plan (i.e., a co-pay, coinsurance or deductible), also called a financial requirement.

Deductible

A financial (cost-sharing) requirement imposed by a health plan whereby a patient must pay a specified amount out-of-pocket before the health plan will pay any money for health services. For example, a patient who has a $500 deductible must pay for all health services up to $500 before the health plan begins to pay for claims.

Essential Health Benefits

The 10 categories of benefits (e.g., mental health and substance use disorder services including behavioral treatment, preventive services, prescription drugs) that ACA Plans must cover.

Individual plans

Health insurance plans not sponsored by an employer or the government. These plans are purchased directly by individuals (typically on the Marketplaces or Exchanges) and must comply with the ACA (including the EHB requirement).

Medication-Assisted Treatment

The use of FDA-approved medications in combination with psychosocial therapies. MAT Is the most effective treatment for opioid use disorder.

Outpatient

Outpatient Services for adolescents and adults, this level of care typically consists of less than 9 hours of service/week for adults, or less than 6 hours a week for adolescents for recovery or motivational enhancement therapies and strategies. (Read more on the ASAM Criteria.)

Intensive Outpatient

Intensive Outpatient Services for adolescents and adults, this level of care typically consists of 9 or more hours of service a week or 6 or more hours for adults and adolescents respectively to treat multidimensional instability. It is an organized outpatient service that delivers treatment services during the day, before or after work or school, in the evening, and/or on weekends.

Partial Hospitalization

Partial Hospitalization Services for adolescents and adults, this level of care typically provides 20 or more hours of service a week for multidimensional instability that does not require 24-hour care. It is an organized outpatient service that delivers treatment services usually during the day as day treatment or partial hospitalization services.

Low-Intensity Residential

Clinically Managed Low-Intensity Residential Services, this adolescent and adult level of care typically provides a 24 hour living support and structure with available trained personnel, and offers at least 5 hours of clinical service a week. This encompasses residential services that are described as co-occurring capable, co-occurring enhanced, and complexity capable services, which are staffed by designated addiction treatment, mental health, and general medical personnel who provide a range of services in a 24-hour living support [DM1] setting.

Inpatient Care

There are different levels of inpatient, residential care; ranging from low-intensity to high-intensity. Medically Managed Intensive Inpatient Services for adolescents and adults, this level of care offers 24-hour nursing care and daily physician care for severe, unstable problems in ASAM Dimensions 1, 2 or 3. Counseling is available to engage patients in treatment.

Parity Act

Under the 2008 Mental Health Parity and Addiction Equity Act (Parity Act), private and public insurers are obligated to provide comprehensive and equitable coverage for substance use disorder and mental health benefits. The Parity Act requires a health plan’s standards for substance use and mental health benefits to be comparable to – and no more restrictive than – the standards for other medical benefits. Generally, this means that a plan cannot put more restrictive visit limits, impose higher cost sharing or apply more onerous prior authorization or concurrent review requirements on MH/SUD benefits as compared to similar medical benefits or surgical benefits.

In-network

Providers who have a contract to participate in a plan’s network. You may only be permitted to see an in-network provider. You may also pay less in cost-sharing for services from in-network providers.

Out-of-network

Providers who do not have a contract to participate in a plan’s network. Before receiving services from an out-of-network provider check with your plan to see if you have out-of-network coverage and if your plan has any requirements to receive services from an out-of-network provider (e.g., prior authorization). You may have higher out-of-pocket costs for services from out-of-network providers.

Out of pocket

The amount you pay for health care services. This includes services not covered by your plan or services from providers not covered by your plan; amounts that apply toward your deductible; copayments; and coinsurance.

Small group plans

Health insurance plans offered to employees of companies with less than 100 employees. These plans are subject to the ACA (including the EHB requirement).

What to Look for in a Treatment Provider – and What to Avoid

You want your insurance to help cover quality treatment, but unfortunately there are many so-called “treatment centers” that will not provide your child with quality care. Learn how to discern the good signs from the red flags.

red flag

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