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How Does Insurance for Outpatient Treatment Work?
March 27, 2017
Insurance for outpatient treatment typically covers mental health and behavioral health services, which includes treatment for substance use disorders. Outpatient substance abuse treatment, also sometimes referred to as a partial hospitalization program, is when you attend therapy sessions while living at home. You’re not monitored around the clock, as you would be in inpatient treatment.
Behavioral health services include treatment for mental health and substance use disorders. As of 2008, federal law requires private health insurance and government health care providers to cover behavioral health services at the same level they cover other medical services. Private and public health insurance carriers may not offer medical benefits at one level and offer a reduced level of benefits for mental health services.
Despite passage of these federal laws, most people are still unaware of them. A 2014 survey by the American Psychological Association revealed that more than 90 percent of people in the U.S. were not familiar with federal laws regarding mental health services.1
Does the Affordable Care Act Provide Insurance for Outpatient Treatment?
Any insurance sold under the Affordable Care Act, also known as Obamacare, must provide mental and behavioral health services, which are considered essential health benefits. Any plan sold through the ACA marketplace must include coverage for: 2
- Behavioral health treatment, such as outpatient psychotherapy and counseling
- Mental and behavioral health inpatient services
- Substance use disorder treatment
The ACA also prevents insurance companies from denying coverage based on pre-existing conditions, including addiction. If you don’t have insurance for outpatient treatment now, you can apply for coverage during the open enrollment period. Purchasing a health insurance policy through the federal or state marketplace can drastically reduce your out-of-pocket costs for treatment.
Does Your Employer-Sponsored Health Insurance Plan Provide Insurance for Outpatient Treatment?
Check your plan’s description of benefits that you should have received when you signed up for your insurance. The details of your plan list what’s covered for behavioral health services. If you still aren’t certain, contact your company’s human resources department, or you can ask your insurance company directly.
Most HMO (health maintenance organization), PPO (preferred provider organization), and POS (point-of-service) plans provide some level of outpatient treatment coverage.
What outpatient treatment benefits do HMO, PPO and POS plans provide?
All health insurance plans follow unique guidelines regarding benefits covered under insurance for outpatient treatment.
With an HMO plan, outpatient benefits are determined by the services that are included in your network. Most HMO insurance for outpatient treatment requires pre-approval. A referral from your primary care physician may also be required, along with proof that the treatment is medically necessary.
PPO or POS insurance for outpatient treatment may be broader, because these plans allow you to go outside the network to find the right provider for services. PPO and POS plans typically do not require pre-approval, although a referral may be required.