Substance Abuse Treatment & Private Insurance

In the year 2002, 22 million Americans, roughly 9.4 percent of the total population, was estimated to either abuse substances, or be addicted to them. 14.9 million of those who abuse substances are addicted to alcohol, a legal, and socially accepted drug, yet private insurance has drastically decreased as the payment source for working individuals who have both private insurance and a substance abuse problem. The reduction in coverage to working substance abusing individuals by private insurance companies poses a dilemma for both the individual involved, and for the taxpaying public, as the burden of treating substance abuse is being carried almost completely by publicly funded treatment facilities, often applying a sliding scale fee determined by the individual's ability to pay.

Decreasing Coverage

• According to Mark and Coffey, from 1987 through 1997, private insurance has reduced coverage for substance abuse treatment by an average of 1 percent per year. While research statistics have shown no notable reduction in substance abuse by the employed population, the percentage of workers covered for substance abuse treatment by private insurance policies has decreased by 23 percent since 1992, according to a report made in 2001.

Catagories Effected

• Mark and Coffey report that all categories of substance abuse treatment have been impacted by the reduction in coverage by private insurance policies. Inpatient residential treatment, outpatient treatment and pharmaceutical coverage have all taken a dive related to coverage by private insurance, though brief therapy and outpatient treatment have been encouraged by practitioners to reduce treatment costs. In general, the intensity of all treatment levels dropped by 5 percent, though there was no reported difference in the need for treatment services at each level by substance abusing individuals.

Residential Treatment

• Residential treatment, the most expensive level of substance abuse services, predictably, has been the most effected by the reduction in private insurance coverage. While intensive treatment within a residential facility is actually necessary for those addicted to certain drugs, in order to receive informed treatment from a licensed psychiatrist, psychologist and other members of a multilevel treatment team, and form new habits with time to have them successfully take hold in the individual, it is no longer readily available, even for working people with private insurance. Most coverage covers no more than the cost of detoxification from the substance involved, a procedure substance abuse professionals view as highly inadequate, and only the first step of treatment for the disease of addiction.

Outpatient Treatment

• Outpatient and brief therapy levels are most often recommended in order to reduce the cost of treatment for substance abuse, even when they have not been demonstrated to be the most effective in many cases; however, the coverage of outpatient treatment by private insurance groups has also been decreased, and the time allowed in outpatient treatment reduced by an average of 10 days per person. Outpatient treatment that has not been traditionally believed by many professionals to be intense enough to successfully counter relapse tendencies of newly recovering addicts and alcoholics, has now been reduced to an even less effective intensity.

Pharmaceutical Expense

• Many substance abusing individuals also have other mental disorders that contributed to their addiction disorder initially, and increase the likelihood of relapse for them, in spite of appropriate treatment by counselors for substance abuse disorders. These individuals require personalized treatment from a trained and licensed medical staff, knowledgeable of both mental health and addiction treatment issues. Medication is often required for both mental health problems initially present, and chemical imbalances created through abuse of the related substance. Coverage for these medications has been reduced by private insurance organizations, leaving those served more vulnerable to mental health disorders and relapse.

Public Cost

• The cost of substance abuse treatment services for the working public is being regularly allocated to the public treatment sector, due to the reduction of private insurance coverage for those insured. Public substance abuse treatment facilities were already overloaded with the treatment needs of uninsured individuals, the homeless and other indigent clients who could not financially cover the cost of their own treatment. Many financially overloaded state governments are reducing their own budgets in today's troubled economy to offset the cost of substance abuse treatment and mental health treatment to taxpayers. Governor Sonny Perdue of Georgia recently reduced the budget for substance abuse treatment services by a grueling 24 percent in his state, putting thousands of master's level counselors out of work, and leaving many vulnerable populations without the availability of substance abuse services.