Young woman discussing financial options for residential treatment with an admissions counselor in a serene office environment.

Paying for residential treatment for your child can be a stressful event on top of what is happening. However, money should not be a factor in getting your child the care they need. There are options to explore. Knowing the options will help you get your teenager the mental health they need.

Financial Options for Residential Treatment: A Comprehensive Guide for Parents
The Evolving Landscape of Residential Treatment Costs

Residential treatment for teens is not inexpensive. The cost of residential mental health treatment has changed significantly over the last ten years. Factors affecting costs include the length of treatment, types of therapy offered, and facility amenities. On average, daily expenses can range from basic living costs to more specialized clinical treatments.

You are also responsible for the residential part of the treatment, food, shelter, and day-to-day costs, but the higher costs are associated with clinical and psychiatric treatments and special therapies. The good news is that there are several options today that weren’t previously available.

For instance, The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 and the Affordable Care Act (ACA) of 2010 helped improve access to mental health and substance use disorder treatment services, including residential treatment, by requiring insurance plans to offer equal coverage for mental health and medical/surgical services.

Therefore, the first step is to consult the mental health residential centers you are considering and discuss payment terms and insurance coverage. The answers provided by the residential treatment facility may significantly affect which institution or program can provide your family with the best care. Let us also remember that negotiation is alive and well, regardless of your chosen payment method.

Negotiation is not a policy, it is a technique you can use when it's to your advantage... John Bolton

Work with a program consultant like a therapeutic treatment placement specialist, an educational consultant, or even the program’s admissions coordinator, and ask a lot of questions. Please don’t assume that all therapeutic treatment centers operate the same. Every program is unique, and there are no industry pricing standards.

One word of caution: residential treatment is different from a therapeutic boarding school. Insurance will pay for most of the treatment at an RTC but not for an educational facility like a TBS.

Payment Options for Parents of Teens Who Need Residential Treatment

1. Insurance Coverage: A Key Option Insurance coverage for residential treatments has expanded over the years. Contact your insurance provider to understand the extent of coverage for your child’s needs. Insurance may cover medical services, therapy, medication, and inpatient treatment. If initially denied, appeal the decision and consider using an advocate from the treatment facility to negotiate on your behalf.

2. Medicaid and State-Funded Programs: Medicaid offers a wide range of coverage for mental health treatments, including some residential care. Explore state-funded programs for additional financial support options.

3. Direct Payment and Cash Discounts: Some facilities offer discounts for upfront payments. Inquire about cash discounts, as paying in full can be advantageous for both you and the treatment center.

4. Flexible Payment Plans: Facilities often provide in-house payment plans. Discuss your financial situation openly with the facility to explore grants and flexible payment arrangements.

5. Financing Options: Many treatment centers now offer financing solutions like low-interest loans or credit lines. Additionally, personal loans from banks or credit unions can be an alternative, depending on your credit score.

Scholarship or grants may be used to pay for a portion of residential treatment for teens with behavioral or emotional problems.

6. Employer-Assisted Loans: Some employers offer loans to long-term employees. These loans can be repaid through paycheck deductions, providing a convenient repayment method.

7. Credit Card Payments: Credit cards can be a quick financing option, especially if you secure a low-interest rate. However, be cautious of accumulating interest.

8. Grants and Scholarships: Non-profit organizations occasionally provide grants or scholarships specifically for mental health treatments. Research and apply for these opportunities to reduce treatment costs.

9. Crowdfunding: Platforms like GoFundMe allow for fundraising campaigns to cover treatment expenses. Utilize your social network to support your fundraising efforts.

10. Charitable Organizations: Many charities offer financial assistance for mental health treatments. Research organizations in your area or consult your teen’s healthcare provider for recommendations.

11. Utilizing Savings: 401(k) or 529 Plan: Retirement or education savings (like a 401(k) or 529 plan) should be considered carefully; they can be viable options in certain situations. Consult a financial advisor to understand the implications.

12. Your School District: In 1985, the Supreme Court ruled that states cannot deny students with disabilities an education. If your child has an IEP, the school district is required to reimburse parents for private education and educational expenses if placement is required. Contact your school district for more information.

Does Insurance Cover Teen Residential Treatment?

Does Insurance Cover Residential Treatment?

Contact your insurance company directly. Let them know your child’s needs and determine how much they will cover. You may learn that they may cover a significant portion, including all medical or clinical services, therapy, medication, and inpatient treatment. Most insurance companies offer some coverage for mental health services.

Once you know what they will pay for, you have a better idea of what you must come up with for the copay and/or deductible. If the insurance company initially tells you no, don’t give up. In many instances, they will deny such requests initially. Ask for specifics about why they won’t cover treatment. If necessary, ask to talk to a supervisor.

Be polite but persistent in getting the coverage you need to help pay for such costs. The treatment facility or program often has an advocate who will work with your insurance company. If you are having problems with your insurance company, then you should have the facility where your child will attend and will talk to them on your behalf as well.

Staying Informed

The cost of mental health treatment varies based on treatment type, location, and other factors. Research your options thoroughly and discuss your financial situation with treatment providers to find the best solution for your family.

Here are additional resources you might be interested in:

The Best Adolescent Residential Treatment Centers for Your At Risk Youth

Do Residential Treatment Centers Work?

Questions and Answers about Residential Treatment Programs for Teens

Speak to an expert about How to Pay for Residential Treatment and how it may help your child.

Connect with an Admissions Counselor who specializes in How to Pay for Residential Treatment to help your teen begin their recovery today.

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