The process of accessing treatment for a drug or alcohol addiction is generally faster and more seamless when the person seeking care has health insurance. Although coverage varies depending on the insurance provider, plan tier, and other factors, plans could be said to fall under one of two categories: high deductible health plans (HDHPs) and low deductible health plans (LDHPs).
Seeking addiction treatment with an HDHP may require higher upfront costs, depending on the deductible. However, engaging cost-saving benefits, such as a health savings account (HSA), can help mitigate the costs of treatment. This article includes more information about HDHPs, including how to receive addiction treatment with high deductible plans.
What Is A High Deductible Health Plan (HDHP)?
An HDHP is a health insurance plan with a lower monthly premium and a higher deductible. A monthly premium is the cost-per-month that an insured person pays to receive coverage. People with HDHPs pay less per month for coverage than people with LDHPs.
A deductible is the out-of-pocket expense for healthcare services before insurance coverage kicks in. For example, if a policy has a $1,000 deductible and the insured person receives a $2,000 medical bill, then he or she must pay $1,000 and insurance will provide coverage for the remaining $1,000. The Internal Revenue Service (IRS) recognizes insurance plans as HDHPs if they carry a deductible of $1,600 or more for single policyholders and $3,200 for families.
The deductible resets annually. Once fulfilled, the deductible is met for that fiscal year. Then, coinsurance kicks in, which is the percentage of a covered expense that must be paid for covered services. For example, your plan may pick up 80% of the cost of a particular medical service and you are responsible for the rest (20%). Once the deductible and out-of-pocket maximum are met—also known as the catastrophic limit—the HDHP covers 100% of all in-network expenses.
Health Savings Account (HSA)
People with HDHPs can contribute to a health savings account (HSA), also known as a high deductible health plan with a savings option (HDHP/SO). People with HDHPs are eligible for HSAs, which allow for pre-taxed dollars to be entered into a savings account for healthcare-related purposes. The funds are then used to offset the costs of premiums, copays, and coinsurance.
Some employers offer to contribute to their employees’ HSAs per year, up to a certain amount. If a person has an HSA through their employer, then it may be particularly economical to choose an HDHP. However, there is a limit to the amount of funds that can be contributed to an HSA in a fiscal year. In 2024, a maximum of $4,150 was permitted for individual (non-family) HSAs, according to Fidelity.
Should I Consider An HDHP?
An HDHP can be a great choice for people who are generally healthy and interested in having insurance for preventative care. These policyholders are people who aren’t sick or injured, and don’t anticipate becoming so, but want insurance in the event that the unexpected occurs, and can afford the high upfront deductible.
This plan can also be a good choice for those planning to receive costly services that exceed that of the deductible and coinsurance amounts. If such is the case, it’s important to review the details of your plan prior to making a decision. For many health insurance plans, preventative care and screenings require a copayment (copay): a set amount that an insured person pays for specific services, like a visit to the general practitioner or emergency room. These services don’t typically count towards the deductible. However, many providers that are in-network for HDHPs will offer discounts to policyholders that utilize their services, some of them as high as 50%.
HDHPs may not be ideal for people managing chronic conditions that require consistent, ongoing treatment. Keep in mind that certain conditions may require appointments with specialists that are out-of-network, which carry higher costs.
Cost Of HDHPs
The monthly premium and deductible vary based on the health plan chosen. In 2023, the average monthly premium for an HDHP was $684.75 for single coverage and $1,867 for family coverage, according to KFF.
Pros And Cons Of HDHPs
There are a few advantages to choosing an HDHP for people who feel the option is applicable to their needs.
Some of the benefits of HDHPs include:
- lower monthly premium
- HSA
- catastrophic limit
- often encourages policyholders to be more cost-conscious and more thoroughly research providers and services
Although there are positives to consider, there are potential disadvantages associated with choosing an HDHP.
Some of the drawbacks of HDHPs include:
- higher deductible
- high catastrophic limit that most plan holders won’t meet
- may discourage policyholders from seeking care, since insurance takes a while to kick in
- limited coverage for certain medications and care services
- HSA contributions are capped
Using An HDHP To Pay For Addiction Treatment
It’s important for people thinking about accessing addiction treatment with high deductible plans to know what to expect prior to receiving care, as well as potential ways to mitigate costs. Take note of the following suggestions to prepare for receiving treatment with an HDHP.
Verify Benefits Before Beginning Treatment
It’s impossible to know exactly which treatment services you’ll need before speaking with a licensed healthcare professional. However, you may have a vague idea, which can offer a starting point for gathering information on your plan’s range of coverage. For example, the average cost of a 60- to 90-day stay at a residential rehabilitation center can range from $12,000 to $36,000, according to the National Center for Drug Abuse Statistics.
Some of the treatment services that you may need include:
- medical detoxification
- inpatient rehabilitation
- intensive outpatient program (IOP)
- medication-assisted treatment (MAT)
- one-on-one therapy
- group therapy
- sober living
Information about your plan can typically be found online or in an associated phone application, but you can always call the customer service number on the back of your insurance identification card for answers to specific questions. At Bedrock Recovery Center, professionals on staff can provide help to those interested in treatment, free of charge, with finding out what their HDHP does and doesn’t cover, as well as anticipated costs for services.
Look Into Options To Offset Anticipated Costs
When selecting a facility or specialist for substance abuse treatment, choosing in-network providers is most cost-effective; however, there may be an out-of-network provider with a reputation for higher-quality care. Even if you’re certain that you’d rather choose an in-network provider, it’s important to collect as much information as possible to best prepare.
When you’ve reached the point of putting together a payment plan, consider a few ways to manage the cost.
Some ways to manage the cost of treatment include:
- using funds from an HSA
- discussing payment plans or discounts for upfront cash payments with the treatment provider, as well as sliding scale fees
- exploring government-backed sources, such as Medicaid and state-funded treatment facilities that receive grants such as the Substance Abuse and Mental Health Services Administration’s (SAMHSA) Substance Use Prevention, Treatment, and Recovery Services Block Grant (SUBG)
- exploring nonprofit scholarships, e.g., 10,000 Beds, CLEAN Cause Foundation, Daniel Copersino Foundation, and Shatterproof
Get Help With Keeping Your Job
Many people who enter treatment are concerned about returning to work post-treatment. You may have questions about whether your employer will understand your decision to seek treatment, and whether you’ll remain employed throughout treatment. Since HDHPs are associated with high upfront costs, and because many people have health insurance coverage through their employer, it can be relieving to have certainty about keeping your job.
If a person is interested in receiving treatment for substance abuse, the individual is required to submit a request to human resources prior to entering treatment. By doing so, the individual is permitted, by law, to take up to 12 weeks of unpaid leave to receive treatment or help a loved one with a substance use disorder, without being fired. If a person is also in a labor union, there is certain information that must be submitted to the labor union as well. Under FMLA, the employee’s decision to seek treatment must remain confidential.
At Bedrock, professionals on staff can help those in treatment keep their jobs by submitting necessary paperwork and serving as a liaison between the client and the employer.
Find Freedom From Addiction At Bedrock Recovery Center
If you or a loved one is interested in receiving treatment for drug or alcohol abuse, help is available. Contact BRC for information about our comprehensive services and programs, or to learn about your specific health insurance coverage.
