Do Medicare and Medicaid Cover Rehab?

If you’re struggling with addiction, a rehab center is often the best place you can go to seek help overcoming it. But rehab can be expensive. If you’re unemployed or don’t have insurance through your job, you may be wondering: Does Medicaid cover rehab?

Fortunately, many treatment centers do accept Medicare or Medicaid for addiction treatment. In fact, Medicare and Medicaid are among the most common ways of paying for rehab. 

Avenues Recovery explains eligibility, coverage, and the limitations of Medicare and Medicaid for drug rehab. 

Key Takeaways

• Medicaid and Medicare can help cover the cost of inpatient and outpatient addiction treatment.
• Eligibility for Medicaid depends on income, age, disability, and state residency, while Medicare covers people aged 65+ or with specific disabilities.
• Coverage varies by state and plan, so it’s important to confirm coverage before enrolling in a rehab.
• Both programs may cover medication-assisted treatment, counseling, detox, and therapy, but not all rehabs accept Medicare or Medicaid.
• Grants, scholarships, and sliding-scale programs are available if insurance coverage is insufficient.

Does Medicaid Cover Rehab?

Medicaid does pay for drug rehab, including inpatient and outpatient treatment, detox services, counseling, and medication-assisted treatment. However,  you should check your state’s policy before applying, because coverage varies by state. Keep in mind that different rehab centers also have different policies, so it’s important to look specifically for drug rehabilitation centers that accept Medicaid if that’s how you’re planning to pay.

What is Medicaid?

Medicaid is a government-run health insurance program that provides free or low-cost coverage to low-income people, families, pregnant women, elderly adults, and people with disabilities. It is jointly funded by the federal and state governments and is administered at the state level. 

Since the 2010 Affordable Care Act (Obamacare), Medicaid has played a significant role in covering addiction treatment. In fact, in 2020, Medicaid was the largest payer in the US for behavioral health services, which include substance use disorders. 

Although the federal government oversees the Medicaid program, certain aspects are managed at the state level. These include:

• Creating eligibility standards
• Setting the rate of payment
• Deciding service duration, amount, type, and scope
• Program administration

These factors are why Medicaid program qualifications and services vary from state to state.

Eligibility for Medicaid

To qualify for Medicaid coverage for drug rehab, you need to meet certain criteria. Below are some of the primary considerations the insurance takes into account:

Financial Situation 

To qualify for Medicaid, you need to meet specific financial requirements. Your Modified Adjusted Gross Income will help you figure out whether you are eligible for Medicaid. 

Medical Situation

Even if your financial situation does not make you eligible for Medicaid coverage, you may still qualify if you have a disability. 

Age and Role 

You may also be eligible for Medicaid if you are above the age of 65, below the age of 19, a parent, or pregnant. 

Residency and Citizenship 

If you’re applying for Medicaid for drug treatment, you must be a resident of the state where you are applying and either a U.S. citizen or a qualified non-citizen, such as a green card holder or refugee.

What Does Medicaid for Drug Rehab Cover?

Medicaid for drug rehab covers detoxification, inpatient rehab, outpatient programs, counseling, behavioral therapy, and medication-assisted treatment. Some states may also cover case management and long-term care services. Coverage details depend on state Medicaid plans and medical necessity assessments.

In most states, if you are eligible for Medicaid addiction treatment, you do not have to pay co-payments. Even if you do, there is a maximum amount that you can legally be charged for out-of-pocket payments.

How Long Does Medicaid Cover Addiction Treatment For? 

Medicaid covers addiction treatment as long as it is medically necessary. States may limit coverage to set periods, such as 30, 60, or 90 days, but extensions are possible if you have clinical justification. Coverage length also depends on the rehab provider, the specific services they offer, and your individual treatment needs.

Because each state has its own rules for Medicaid coverage for drug abuse treatment, you should ask your treatment provider before applying. Today, insurance companies have to cover the full range of services for substance use disorder. This includes residential, inpatient, and outpatient treatments. However, outpatient care has lower recovery success rates compared to inpatient care, so many rehab centers don’t offer outpatient programs.

What is Medicare?

Medicare is a federal health insurance program in the United States for people aged 65 and older, and for younger people with certain disabilities or end-stage renal disease. It includes Part A for hospital care, Part B for medical services, and optional Parts C and D. With a Medicare insurance plan, you are charged a monthly premium based on your income level.

Eligibility for Medicare

Medicare automatically enrolls many people when they reach age 65. Patients who don’t get automatically enrolled can apply for coverage. For registration information, you can visit the official Medicare website.

To qualify for Medicare coverage for addiction treatment, you must meet certain criteria: 

• Medicare requires you to pay premiums, deductibles, or coinsurance. If these costs are too high, you may qualify for Medicaid, which can help cover out-of-pocket expenses. In some cases, people are eligible for both Medicare and Medicaid, and the two programs can work together to cover treatment costs.
• You must be 65 or older, or have a qualifying disability or disease.
• You must be a US citizen or a legal permanent resident.
• If you are a legal permanent resident, you must:
  • Have lived in the United States for five years
    AND
  • Have worked or paid Medicare taxes for ten years (40 credits).

Is Rehab Covered by Medicare? 

Medicare pays for addiction rehab if it is medically necessary.  Some Medicare plans, including special needs plans, may also cover treatment for related conditions, like chronic mental health issues.  Finding rehabs that accept Medicare can make it easier to access treatment. Nevertheless, Medicare does not cover all addiction treatment, and not all drug rehabs accept Medicare. Knowing what your Medicare plan covers will help you make an informed decision regarding which rehab program to choose.

Medicare Coverage for Substance Abuse Treatment 

Medicare covers drug rehab services such as inpatient detox, outpatient therapy, medication-assisted treatment, and partial hospitalization.

An Original Medicare plan has two parts: Part A and Part B.

• Medicare Part A provides health insurance for hospital stays. Residential rehab programs covered by Medicare fall under Part A. Patients can claim their Medicare coverage after they qualify for hospital stays. Medicare Part A also covers rehabilitation services in skilled nursing facilities. Keep in mind that Medicare only covers up to 100 days of any treatment program. 
• Medicare Part B provides medical insurance. This covers therapy, medications prescribed by medical professionals, outpatient care, and care for co-occurring disorders. This part of Medicare pays for up to 80% of your costs, so you may need to cover the rest out of pocket. 

Original Medicare (Parts A and B) covers many rehab services, but you may still be responsible for deductibles and coinsurance. You can add Part D for prescription drug coverage, which Original Medicare doesn’t include. Medicare Advantage (Part C) combines Parts A and B and often includes Part D prescription drug coverage, though this can vary by provider. Another option is a Medicare Supplement (Medigap) policy, which helps cover out-of-pocket costs that Original Medicare doesn’t, but it does not include prescription drugs.

Here’s a table comparing your options for paying for drug treatment with Medicare:

How Many Days of Rehab Are Covered by Medicare?

Medicare covers up to 90 days of inpatient rehab per benefit period, with an additional 60 lifetime reserve days. Part A covers hospital-based or inpatient rehab, while Part B covers medically necessary outpatient services with no day limit.

Do Medicaid and Medicare Cover Inpatient Drug Rehab?

Both Medicaid and Medicare cover inpatient drug rehab if it is medically necessary. In inpatient drug and alcohol rehab, you stay in the facility throughout treatment. During the stay, you are provided with accommodations and meals.

Medicare uses ‘benefit periods’ to determine coverage for inpatient rehab. Your benefit period starts when you are admitted to the hospital or facility and ends when you have been out of inpatient care for 60 days. If you return to inpatient care within that 60-day window, it is considered the same benefit period, so your coverage continues without interruption, and you do not pay a new Part A deductible. You only pay a new deductible if you begin a new benefit period after being out of inpatient care for 60 days or more.

When you receive inpatient drug rehab at a general hospital, there is no limit to the number of benefit periods you can have. However, if your treatment is at a psychiatric hospital, Medicare limits coverage to a total of 190 inpatient days over your lifetime.

Do Medicaid and Medicare Cover Outpatient Drug Rehab?

Medicaid and Medicare both cover outpatient drug rehab when medically necessary. This includes hospital-based outpatient care, lab tests, medication-assisted treatment, and psychologist expenses in some cases. The deductible varies depending on the treatment process your doctor recommends.

Medication Coverage

Rehab treatment coverage can also include prescription drugs needed for your care, including anti-seizure medications and Methadone. In fact, Medicaid coverage for medication-assisted treatment for opioid use disorders was expanded in 2020. 

Do All Rehabs Accept Medicare and Medicaid?

Not all rehabs accept Medicare and Medicaid. Acceptance depends on the facility’s licensing, accreditation, and state contracts. Some rehabs only accept private insurance or self-pay, while others are specifically approved to bill Medicaid or Medicare for addiction treatment. Be sure to check the policies of the rehab center you are interested in. Addiction treatment can be expensive, so finding rehabs that accept Medicaid can help ensure you get the care you need.

Other Ways to Pay for Rehab

Even if you aren’t eligible for Medicare or Medicaid, or they won’t cover the treatment or facility you need, there are other options to help with funding. For example, state and local government funding, rehab scholarships, grants from nonprofit organizations, and sliding-scale payment programs can help reduce the cost of treatment. Financial difficulty should not be a barrier to accessing help for you or your loved one.

Medicare and Medicaid Rehab at Avenues Recovery

Medicare and Medicaid are fantastic options if you’re looking for substance abuse treatment and don’t have insurance coverage or the ability to pay out of pocket. At Avenues Recovery, our experienced admissions team understands how overwhelming it can be to navigate insurance coverage for rehab. We’re here to help you understand your options. If you or a loved one has questions about using Medicaid and Medicare to pay for drug rehab, reach out to us. Our professionals will walk you through both Medicare and Medicaid coverage at drug rehab. You don’t have to do this alone.

FAQs: Does Medicaid Cover Rehab?

What is the highest income to qualify for Medicaid?

The highest income to qualify for Medicaid varies by state and eligibility group. In states that expanded Medicaid, most adults under 65 can qualify if their income is up to 138% of the Federal Poverty Level (FPL).

Is therapy covered by Medicaid?

Medicaid covers therapy services, including individual, group, and family counseling, when medically necessary. Coverage includes mental health and behavioral therapy, often provided by licensed professionals.

What is the downside of having Medicaid?

Some downsides of Medicaid include fewer provider options, longer wait times, and limited access to specialists. Lower reimbursement rates mean some providers don’t accept Medicaid, and benefits can vary by state, which may affect access to certain services.

What disqualifies a person from Medicaid?

A person is disqualified from Medicaid if their income or assets exceed state limits, they fail to meet citizenship or residency requirements, or they do not belong to an eligible group such as low-income families, pregnant women, seniors, or people with disabilities.

What’s the longest someone can stay in rehab?

The longest someone can stay in rehab depends on the program and funding source. Long-term residential programs can last 6 to 12 months or more, and stays may be extended based on clinical need, insurance coverage, or legal requirements.