Quick answer: Typical ranges and what drives them
Insured residential rehab costs typically range from $1,500 to $15,000 out-of-pocket, depending on plan design, network status, and treatment length.
Key variables that affect cost include:
- Insurance plan type (HMO, PPO, high-deductible)
- In-network vs. out-of-network rehab
- Length of stay and level of care
- Deductibles, copays, and coinsurance
- Prior authorization and medical necessity reviews
These factors work together to determine how much of the bill is paid by your insurer and how much becomes your responsibility.
How insurance pays for residential rehab
Understanding how insurance covers addiction treatment can make cost planning much easier. Here’s what determines your coverage and out-of-pocket responsibility.
Key terms
- Deductible: The amount you pay before insurance starts sharing costs.
- Copay: A flat fee you pay per service.
- Coinsurance: The percentage of costs you share after meeting your deductible.
- Out-of-pocket maximum: The most you’ll pay in a year before insurance covers 100%. (See the CMS glossary for detailed definitions.)
- Prior authorization: The process where your insurer confirms that rehab is medically necessary.
Thanks to the federal Mental Health Parity and Addiction Equity Act, insurers must cover mental health and substance use care at levels comparable to medical care—learn more from SAMHSA on parity and coverage.
In-network vs. out-of-network
In-network providers have contracted rates with your insurer, meaning you’ll typically pay less and avoid balance billing. If your plan includes out-of-network benefits, you may still receive partial coverage, but at higher coinsurance rates.
When the best clinical fit is outside your network, your insurer may approve a Single Case Agreement (SCA), which allows in-network level coverage for that specific rehab center.
Length of stay and level of care
Insurance approvals often follow the ASAM levels of care framework. Many residential stays last 30, 60, or 90 days, depending on progress and ongoing reviews.
Most insurers conduct concurrent reviews—regular check-ins with your treatment team—to determine if continued residential care is medically necessary.
Real-world cost scenarios
To make coverage easier to picture, here are sample breakdowns of how costs can look across different plan types.
Scenario A: HMO plan, in-network, $1,000 deductible, 20% coinsurance
Total billed: $15,000
Insurance pays: $12,000
Patient responsibility: $1,000 deductible + $800 coinsurance = $1,800 total
Coverage continues until out-of-pocket max is met.
Scenario B: PPO plan, out-of-network benefits, $2,000 deductible, 40% coinsurance, SCA approved
With a Single Case Agreement, the insurer reimburses the facility at in-network rates, reducing costs by nearly half.
Member pays: $2,000 deductible + $2,600 coinsurance = $4,600 total.
[Learn about our residential rehab in the Bay Area]
Scenario C: High-deductible plan
Participants pay full charges until meeting their deductible, which may range from $3,000 to $8,000. Afterward, coinsurance typically drops to 0–20% until the annual out-of-pocket max.
Many use Health Savings Accounts (HSA) or Flexible Spending Accounts (FSA) to offset costs with pre-tax dollars.
Scenario D: Union or Employee Assistance Program (EAP) referral
EAPs often cover part of the initial assessment or short-term stay, with the primary insurance plan covering the remainder. Coordination of benefits minimizes overlap and lowers out-of-pocket expense.
Scenario E: Medicare Advantage or Medi-Cal/Medicaid
Coverage varies widely by plan. Most require prior authorization and may include daily copays or per-stay maximums.
What affects your cost most
Medical necessity and prior authorization
Insurers only pay for care deemed “medically necessary.” Clinical teams provide documentation and progress updates during treatment to maintain approval. These initial and concurrent reviews determine how long your stay remains covered.
Plan design variables
Every policy handles cost-sharing differently.
- Deductible: Larger deductibles mean higher upfront costs.
- Copay and coinsurance: Set by plan; typically lower for in-network care.
- Out-of-pocket maximum: Caps yearly spending, after which insurance covers 100%.
According to the Kaiser Family Foundation’s 2025 Employer Health Benefits Survey, most workers now face an out-of-pocket maximum above $3,000 for single coverage, with one in five exceeding $6,000. Average family premiums have risen to nearly $27,000, and employee deductibles continue to climb.
Network status and Single Case Agreements
When a preferred rehab isn’t in-network, a Single Case Agreement allows your insurer to make an exception for in-network coverage. SCAs require documentation from the treatment team showing that the chosen facility offers unique or medically necessary services.
Ancillary services
Residential rehab often includes additional services billed separately:
- Medical detox before residential care
- Lab testing and medication management
- Psychiatry or pharmacy services
These may have separate copays or coinsurance but remain covered under behavioral health benefits.
Financial options and consumer protections
Mental health parity and appeals
The Mental Health Parity and Addiction Equity Act protects you from unequal coverage. If your insurer denies treatment, you can appeal by requesting an internal review and submitting medical documentation. Learn more from SAMHSA’s parity resource page.
Payment plans and HSAs/FSAs
Many rehab centers, including New Bridge Foundation®, offer payment plans for remaining balances. Participants can also use HSA or FSA funds to cover deductibles, copays, and coinsurance using pre-tax savings.
Charity care and sliding scale fees
Some nonprofit facilities offer reduced rates based on income. Participants typically provide income verification or tax documentation to qualify.
After residential: Step-down costs (IOP, outpatient)
Once residential treatment ends, participants often step down to IOP for continued support at lower cost. Insurance generally covers this level of care under the same behavioral health benefits.
This continuity of care—moving from medical detox before residential care to the 30-day residential program or long-term residential program—helps improve outcomes and prevent relapse.
A trusted partner in your recovery and coverage journey
Insurance details can be complex, but you don’t have to navigate them alone. Our admissions and financial counseling teams help participants verify your insurance benefits and understand every aspect of coverage before admission.
Voted one of America’s “Best Addiction Treatment Centers” by Newsweek five years in a row, New Bridge Foundation® provides affordable, evidence-based care to help participants heal with confidence.
If someone you love is ready to begin treatment, call today to check your benefits in minutes and take the first step toward recovery.
FAQs
Does insurance cover residential rehab?
Yes. Most private and employer-sponsored plans cover substance use treatment under mental health benefits.
What is my cost if I haven’t met my deductible?
You’ll pay the deductible amount first, then coinsurance for the remaining balance until you reach your out-of-pocket max.
How do prior authorizations work for rehab?
Your treatment provider submits documentation to your insurer confirming medical necessity before admission.
Will insurance pay for 90 days of treatment?
Yes, if continued treatment is medically necessary and approved through concurrent reviews. Learn more in our blog on how long should rehab be.
Are medications and detox included in coverage?
Yes. Detox, medication management, and therapy are typically covered under behavioral health benefits.
What if my plan only covers out-of-network rehab?
You may still qualify for a Single Case Agreement to access in-network coverage at a preferred facility.
What is a Single Case Agreement?
An SCA allows your insurer to treat a specific rehab center as in-network for your stay, reducing costs.
How quickly can benefits be verified?
New Bridge Foundation® offers same-day admission and benefit checks for most major insurance carriers.
Does parity law require insurance to cover rehab?
Yes. Under federal parity law, substance use treatment must be covered comparably to medical care.
Can I switch levels of care mid-stay without losing coverage?
Yes, with approval from your insurer through a concurrent review. Transitions from residential to outpatient are common.
Yes. Most private and employer-sponsored plans cover substance use treatment under mental health benefits.
You’ll pay the deductible amount first, then coinsurance for the remaining balance until you reach your out-of-pocket max.
Your treatment provider submits documentation to your insurer confirming medical necessity before admission.
Yes, if continued treatment is medically necessary and approved through concurrent reviews. Learn more in our blog on how long should rehab be.
Yes. Detox, medication management, and therapy are typically covered under behavioral health benefits.
You may still qualify for a Single Case Agreement to access in-network coverage at a preferred facility.
An SCA allows your insurer to treat a specific rehab center as in-network for your stay, reducing costs.
New Bridge Foundation®® offers same-day admission and benefit checks for most major insurance carriers.
Yes. Under federal parity law, substance use treatment must be covered comparably to medical care.
Yes, with approval from your insurer through a concurrent review. Transitions from residential to outpatient are common.
