2020 has been a trying year for us all. With the increase in substance abuse during the global pandemic, the need for comprehensive, reliable addiction treatment services is greater than ever. However, the cost of care can be a roadblock to treatment for thousands of Americans. Many don’t realize addiction treatment becomes more affordable as the end of the year approaches, making this the best time to get help.
With the year finally drawing to a close, it may be tempting to wait until the new year to seek addiction treatment. Things like upcoming holidays or wanting to start fresh at the beginning of the year may seem like good reasons to postpone care, but doing so may cause you to miss out on the chance for low cost or no-cost drug or alcohol rehab services. How? It depends on your insurance plan.
Depending on the terms of your policy and how frequently you’ve used your insurance this year, you may be close to or have already met your deductible and maximum out-of-pocket limit for 2020. This means any medical costs that exceed this limit could be 100% covered by your insurance company with no additional costs to you. Even if you haven’t met this limit yet, you are only responsible for covering expenses up to that point. Once met, your insurance kicks in and takes care of the rest. However, the window for taking advantage of these end of year savings is small: January 1st, 2021 marks a new year and a reset of plan premiums for most people.
If you or a family member are in need of addiction treatment, now is the time to take a look at your insurance policy and get familiar with the terms. Insurance lingo can be confusing, so we’ll break it down for you:
Insurance Premium: this is the overall cost of your insurance policy. If you are insured through a job, this is likely split between you and your employer, with the cost coming out of each paycheck. For those who self-pay for insurance, your premium can be paid in one lump sum, quarterly, or monthly.
Deductible: this is the money you owe a healthcare provider, clinic, or hospital for use of services before your insurance starts to pay eligible expenses. For example, if your health insurance plan has a deductible of $2,000, you will have to pay all of your medical expenses until you have met that $2,000 deductible. At that point, your insurance will start paying for the services you use. Any approved medical charges you pay out of pocket will usually go towards your plan's deductible for the year.
Co-Insurance: this is the percentage you pay for medical services once you've met your deductible and your insurance provider begins to pay for eligible expenses. For instance, if you have a 30 percent co-insurance, you are responsible for paying 30 percent of your medical bill and your insurance will cover the other 70 percent.
Out-of-Pocket Maximums: this is the limit for how much you will pay for medical services under your insurance plan. Once you’ve reached this number (say, $5,000) your insurance company will cover all medical costs beyond this maximum per the terms of your policy. Your Out-of-Pocket Maximum resets each year on January 1st (or the date specified in your policy), so taking advantage of this benefit requires the right timing.
Here’s how it works:
Paul has a substance abuse problem. Over the course of the year, Paul has visited his primary care physician and a few specialists for other health concerns, spending a total of $5,000 in deductibles. Now that Paul is ready to get help for his substance use, he checks the terms of his insurance policy to see that his out-of-pocket maximum is $5,000. This means when Paul goes into treatment, he pays nothing and his insurance covers the entire cost of treatment. However, because it is November 1st when Paul makes the decision to seek treatment, he only has until December 31st to use this benefit before it resets and he has to pay up to the $5000 limit once again.
A Flexible Spending Account (FSA) is a tax-advantaged savings account which uses pre-tax earned income to pay for out-of-pocket medical expenses. In most cases these accounts are set up through an employer with a specific agreed upon amount contributed monthly or bi-weekly. You can use these funds at your discretion and greatly reduce out-of-pocket costs for most medical services, including addiction treatment.
Funds in an FSA can be used toward medical treatment for you and any dependents listed under your insurance plan. This includes spouses and underage children. Adult children may also be covered with these funds if they will be 26 years old or younger as of January 1st, 2021.
The most important thing to remember with FSAs is that those funds are use it or lose it: You must spend all money placed in an FSA by the end of the calendar year. If you don’t, that money disappears. Some employers can choose to allow a grace period of up to two and a half months in the following year for employees to use FSA funds, or they can allow employees to carry over up to $500 of FSA funds into the next year, but not both.
If you’ve been considering addiction treatment for yourself or a loved one and have unused FSA funds, this could be a good time to get help and reduce the cost of rehab.
Still not clear on what all of this insurance lingo means? Our Chief Financial Officer, Sam Shrivasta, breaks it down for you in easy to understand terms here:
Don’t let this opportunity pass you by. Begin the new year with a clear, sober mind-- enter treatment now for little to no cost to you. Call (888) 699-1409 now to speak with our admissions team for more information.