To most observers, it has become clear that the nation lacks the capacity to provide drug abuse treatment to all who need it. Recent attention in the policy community has focused on this need for expanded treatment services. The use of treatment services depends on the availability of services and the ability of the abuser to pay for treatment. The demand for and availability of services are themselves correlated with existing mechanisms for financing drug abuse treatment. Two financing mechanisms now exist: direct support, largely in the form of government block grants, and insurance. Block grant funding results in the direct provision of treatment services to drug abusers. Insurance increases the ability to pay for treatment services, thereby facilitating treatment on demand. In this commentary the author describes the characteristics of existing types of insurance for drug abuse treatment and discusses the resulting implications for access and use of services, paying specific attention to the differences between public and private insurance. In the current policy debate, some have argued that the public sector should move away from the direct provision of treatment toward the provision of more insurance. Given the population in question, Medicaid would seem the most likely public program to carry out this strategy. However, the author argues that the mainstreaming of drug treatment financing into Medicaid is not likely to occur, because of significant institutional barriers.
Originally published in: Health Affairs, v. 11, no. 3, Fall, 1992, pp. 137-148.
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