By Bonnie Lane.
Families of loved ones with a mental illness or a suspected mental illness are often unaware of what their insurance covers. As we are now in open-enrollment periods for many insurance plans, it’s a good time to understand what the three levels of mental health care are so your clients can evaluate coverage options for 2026.
Yes, it may cost more for supplemental coverage on the front end, but it could save them a lot of money on the back end.
A person experiencing a mental health crisis or who is in danger of hurting themselves or others needs to be taken to a hospital emergency room. The ER is equipped to provide immediate safety, stabilization and assessment for urgent mental health needs. But when the individual leaves the hospital,what happens then?
This is very important: They should not let their loved one get discharged from the hospital without a plan of care. The Mental Healthcare Act 2017 mandates that proper discharge planning should be done and documented before any discharge is ordered to ensure continuity of care. Families should be involved in this planning.
Here are the three levels of care that may be recommended.
Residential
Residential treatment facilities provide the highest level of care, with around-the-clock supervision, medication administration and intensive therapy. Some facilities specialize in particular disorders; for example, severe mental illness, substance use disorder, eating disorder, process disorders (like a gambling addiction) and others.
An adolescent may remain in a treatment facility for 45 to 60 days. Adults are admitted for seven days at a time, and the facility has to document their progress and level of stability in order to advocate for more time.
Residential treatment starts at $27,000 a month and may go as high as $72,000, so insurance coverage is a critical consideration. The thing is, the most suitable residential treatment facility may be out-of-network for your insurance. It may even be in another state.
The insurance card has a phone number on the back. They should call to clarify what their current policy covers. Is residential treatment included? Residential treatment outside their home state? If there’s no suitable in-network facility, will they cover an out-of-network facility at the in-network rate?
Relationships among mental health professionals can also be valuable. They should try to have an advocate on their side, maybe someone you recommend, and especially one who can negotiate a rate.
Partial hospitalization program (PHP)
Partial hospitalization is a step down from residential. It’s a day program, five days a week and six hours a day, after which the individual returns to their home or some other housing accommodation. Hospitals and mental health agencies offer PHPs.
Depending upon the acuity of the mental health episode, it may be possible for an individual to go directly into a PHP, as long as they have the ability to participate in their own treatment. Every PHP, however, treats different disorders, so every PHP is not suitable for every patient.
Some PHPs come with housing, but many don’t. Insurance will cover the clinical part of the program, but it will never cover standalone housing, which can range from $2,000 to $20,000 a month in out-of-pocket expenses.
When choose housing, it can be just a place to sleep or it can provide 24-hour supervision, drug testing and instruction in life skills (cooking, shopping, money management). Some people choose to come home and use a local PHP – but only if their home state offers a PHP that is appropriate, and only if living at home during this critical clinical time is appropriate.
Again, they may have to look across the country for the right program, so it helps to have a knowledgeable advocate.
Intensive outpatient (IOP)
Assuming the individual has learned enough from residential and PHP treatment, IOP is the next step: four days a week, four hours a day, focused on mastering mental health skills: managing medications, getting to appointments on time, and having insight into the triggers that cause them to become symptomatic and strategies to deal with those triggers.
This level of care also allows the individual to re-enter school, volunteer or go back to work part time.
If they have achieved a “meaningful recovery” after IOP, the person is usually ready to come home and live their life with regularly scheduled community-based therapy and medication management through a psychiatrist. I define meaningful recovery as a three-part model:
● Insight – They have ability to identify their illness, know the triggers and symptoms, and strategies to address them
● Advocacy – When symptomatic, they know whom to call (hotline, therapist, friend, parent) and advocate for themselves so they don’t end up back in the hospital?
● Structure – A part-time job, school, volunteering – in other words, a place they need to be at a certain time where people are counting on them.
Hopefully, your client’s loved one won’t have to repeat the levels, but it does happen. Adequate insurance coverage allows you the opportunity to utilize these levels as often as they need. Evaluate their policies now so a loved one can get the care they need.
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Bonnie Lane is Principal Consultant with Family Support Services in Northbrook, www.thefamilysupportservices.com , specializing in supporting families of loved ones with mental illness. She is a graduate of National Louis University with master’s degrees in both developmental and counseling psychology. She is also a certified mediator and domestic violence counselor. She would be happy to assist you helping your clients navigate mental health financial concerns. Reach her at BonnieLane@thefamilysupportservices.com.
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