The End of Obamacare and the Threat to Addiction Treatment

A conversation with Mitchell Sunderland, Managing Editor of Vice Media’s ‘Broadly’.

How Did Obamacare Affect Your Business?

Alo House really started right around the same time that the Affordable Care Act — ‘Obamacare’ as it’s fondly referred to (and sometimes not so fondly, depending on who you’re talking to). The timing couldn’t have been more perfect, because we absolutely depend on Obamacare in order to help our clients.

What is especially crucial to our business is the ‘Parity Act’ of 2008. Although it had already existed, before Obamacare came into law, the Parity Act was not being enforced. The Parity Act states that mental health and substance use disorders have to be covered in the same way that any medical problem would be covered.

So between the Parity Act and other key provisions of Obamacare: namely, that you can’t bar someone from buying insurance because they have a pre-existing condition, or can’t charge them more if they do; and, that young people can stay on their parents’ insurance until they’re 26, instead of 21.

These very important healthcare reforms couldn’t be more important to those suffering from addiction.

How has Obamacare Helped Addicts?

Considering that probably 99.9% of our clients either have a pre-existing condition, or are under the age of 26, I’d say that Obamacare is crucial to helping these people. I don’t even know what they’d do without it.

As far as the pre-existing condition piece goes, imagine being prescribed Zoloft one time, or being admitted to the emergency room for an overdose or alcohol poisoning, and because of that, you could never ever get insurance, or if you did, not being covered for your mental health problems, or if you are, having to pay more than you could ever afford.

And given the young age of the typical person who struggles with hard-core IV drug use these days – and it is an epidemic – the ‘26 year old’ provision is also obviously crucial to the majority of addicted people.

Is it an Issue That it Pushes Insurers to do Outpatient Treatment Instead of Inpatient? What are the Benefits of Inpatient Treatment?

It’s an interesting phenomenon that I’m not totally against. Inpatient addiction treatment is extremely expensive. The old 28-day residential program doesn’t work, particularly for young people. We see young people all the time, in their early-twenties, who — no exaggeration — have been to inpatient treatment 15 to 20 times. More residential treatment isn’t necessarily what they need.

And these days, there’s a huge problem with ‘program hoppers,’ which may definitely be one of the unintended consequences of Obamacare, where young people jump from treatment program to treatment program, using high-quality commercial insurance to live in a mansion for a few weeks, relapse, and re-start the whole process over at a new location. We need to be getting these young people out of that cycle.

The move toward more outpatient treatment, I think, is good. At Alo House, approximately 75% of our clients are enrolled in the outpatient level of care, where we put a very large emphasis on finding jobs and life after treatment. It’s a more realistic level of care, and prepares people for life’s challenges because they’re not living in the inpatient ‘bubble.’

There are definitely benefits to inpatient. Safety and containment, probably our two most important goals in the delivery of treatment, are much, much easier to achieve in an inpatient setting. It fills a crucial role for cases where someone is very unstable, has medical issues, or is a threat to their own safety or that of others.

But, for most cases, there’s a risk-reward element that must be considered. We like to say that with our system of treating people at the lower levels of care, “It’s structured enough to keep you safe, but free enough to challenge you.”

How Important is Long-term Therapy/Drug Counseling?

The insurance companies definitely seem to believe that long-term therapy and counseling are a good idea.  Our whole business is based on us billing for these exact things. They’ll even cover therapy long after the person leaves treatment. I’m sure they’re right.

I think that the accountability aspect of the therapeutic relationship is very important. And there has to be a really positive bond for it to work well. I believe community and a sense of connectedness is maybe even more important.

Unfortunately, there’s not enough of that in this world. You can find some of that camaraderie in places like AA, where there are actually a lot of cool young people’s meetings. We’re trying to create some of this as well, too, where our alumni could come and hang out with one another. You might call this an informal ‘therapeutic community.’

What Would Happen to Addicts if Obamacare was Repealed?

van Haines, Alo House Co-Founder
Evan Haines, Alo House Co-Founder

Putting aside all the other concerns around a Trump presidency, to me, the prospect of losing the Affordable Care Act terrifies me, frankly. I’ve heard from friends who’ve been working in treatment a lot longer than I have that it was okay before. But for us, our whole business has been built around it since day-one.

Speaking of Trump, I heard that he wants to keep the parts he likes, particularly the pre-existing conditions and 26 year-old provisions. Those two things cost insurance companies a lot of money. So by him saying he wants to keep those things, but get rid of the unpopular individual and employer mandates, which were meant to basically pay for those two provisions, he demonstrates an almost childish lack of understanding of what things cost. Everything has a price tag. So how are we going to pay for it?

Even though our relationship with insurance companies is very adversarial, and mostly entails us fighting all day to get coverage for our clients, I also happen to believe that they’re right about a lot of things.  I share their beliefs about the use of less expensive, and just as effective, lower levels of care. I share their concern about poor outcomes, industry-wide.

If it were repealed, we would have to shift gears and look at ways of collaborating with the insurance carriers, and building on the common ground we have, to turn that adversarial relationship into a symbiotic one. To start with, we’d want to come up with a fair price for our services, then we’d want to look at ways to improve outcomes, which might involve totally overhauling the old 28-day ‘Minnesota Model.’

I really do get where the insurance companies are coming from. I know that the ACA has definitely led to the creation of a lot of shady treatment centers. And with the insurers having to cover all these addicted young people with pre-existing conditions, they legitimately have experienced near-catastrophic financial losses. 

Some carriers, like Cigna, have had to pull out of markets entirely, like they did with Florida, explicitly because of the insurance fraud associated with drug treatment. It was just too expensive for them. So if there’s a silver lining to Obamacare being repealed, it may be that these bad actors would be eliminated from the industry.

Addiction isn’t going away any time soon. We seem to be stuck with Trump for the next four years. Insurance companies need to make money. Like it or not, we’re all in this together. It’s hard to say what’s going to happen. All we can do is continue to provide high quality care, keep working to improve outcomes, ensure we’re totally compliant and safe at all times, and remain compassionate. Other than that, we’ll have to see what happens.

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Alo House

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