Insufficient private insurance coverage is an additional barrier faced by adolescents who need SUD treatment services.

About two-thirds of adolescents are insured through their parents’ employer-based insurance (Fox et al., 2003), but adolescents are less likely than younger children to have health insurance (English et al., 2009). Using data from the National Household Survey on Drug Abuse, Wu et al. (2003) found privately insured adolescents were no more likely than those without health insurance to utilize SUD treatment. However, adolescents covered by public insurance (e.g., Medicaid) were more likely to enter treatment than privately insured or uninsured adolescents. Medicaid eligibility is also associated with increased utilization of mental health services among adolescents who are in SUD treatment (Deck & Vander Ley, 2006). Interestingly, research has shown that family income may not be related to the likelihood that adolescents receive SUD treatment services (Wu et al., 2003; Wu & Ringwalt, 2006).

The disadvantage faced by adolescents with private insurance relative to publicly insured adolescents (e.g., those having Medicaid) may be explained by the findings of Fox and colleagues (2003), who analyzed coverage for adolescent SUD treatment services in the most widely sold health maintenance organization (HMO) and preferred provider organization (PPO) plans. Their analysis of these insurance products revealed that highly intensive residential treatment was rarely covered and that the majority of plans only partially covered outpatient SUD treatment. These limitations on coverage result in higher out-of-pocket costs, which may reduce access to treatment services.

Recently passed federal parity legislation may reduce some of these financial barriers by prohibiting out-of-pocket expenses and treatment limitations for SUD treatment that are more restrictive than insurance coverage for other medical conditions (Shern et al., 2009). Research is needed on the implementation of this legislation and whether it increases adolescents’ access to SUD treatment.