Paying for Drug and Alcohol Rehab with Medicare and Medicaid

Shlomo Hoffman
Medically Reviewed by
Dr. Jefferey A. Berman MD, DFASAM
Last Updated
March 6, 2023

Part of the complete guide to understanding addiction

Table of Contents
  1. Medicare and Medicaid for Addiction Treatment
  2. What are Medicare and Medicaid?
  3. Medicare and Medicaid Eligibility Guide
  4. Do The Drug Rehab Centers Near Me Accept Medicare and Medicaid?
  5. How Many Months of Drug Rehab Does Medicare Cover?
  6. Inpatient and Outpatient Coverage
  7. Conclusion

Medicare and Medicaid for Addiction Treatment

Anyone struggling to overcome their drug and alcohol addiction can seek help from a rehab center. These facilities offer a rehabilitation and healing environment and help the patient overcome addiction. Furthermore, rehab centers provide the necessary tools for a happy, healthy, and productive life.

However rehab treatment can be expensive for someone who doesn’t have insurance coverage. And many people looking for treatment are unemployed or don’t have insurance through their job. Luckily, there are many treatment centers that accept Medicaid or Medicare for drug rehab or alcohol addiction treatment. Learn how to determine your eligibility, how to determine if a facility near you accepts Medicaid or Medicare, and find out about how long you will be covered under one of those plans.

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What are Medicare and Medicaid?

The federal government offers a health insurance program called Medicare that covers the medical expense for people above 65 years. This insurance policy also covers expenses for younger people with certain disabilities or kidney failure.

Medicare Part A includes a wide range of rehab services in an inpatient rehabilitation facility. Patients can claim their Medicare coverage after they qualify for hospital stays. Medicare Part A also covers rehabilitation services in a skilled nursing facility.

Keep in mind that the Medicare insurance policy covers short-term treatments only. Short-term care means that the treatment process is fewer than 100 days.

Medicare alone doesn’t include all medical costs. Instead, you have to opt for a Medicare Advantage plan. Also, you can purchase a Medicare supplement policy.

Medicaid, on the other hand, is a health and medical service program for low-income households of any age. To qualify for the Medicaid rehab program, you have to meet certain criteria. The eligibility criteria may vary in different states. The federal government oversees the Medicaid program. But each state has to follow various protocols. These are:

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

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Medicare and Medicaid Eligibility Guide

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

Once you register with Medicare, you can become eligible for the drug and alcohol abuse program. Medicare covers special needs plans as well. People with related conditions such as chronic mental health issues can seek financial support from Medicare. The eligibility of Medicare for drug abuse includes:

  • The patient should financially qualify for the rehab treatment. If they find Medicare expensive, they can move to Medicaid, which is more suitable for a low-income household.
  • The patient should be 65 or older
  • Since Medicare is managed by the Federal government, patients should be U.S. citizens or have a permanent legal residence permit.
  • A patient with a permanent legal residence permit who has lived in the United States for five years paid Medicare taxes or has 10 years of work experience.

Here are the criteria of eligibility patients should know before applying to Medicaid:

  • The patient should meet the financial requirement to qualify for Medicaid. Your Modified Adjusted Gross Income will help you identify whether you will qualify for Medicaid or not. Patients over 65 years old or disability don’t have to meet this requirement
  • Patients applying for Medicaid for drug treatment should be residents of the state. Furthermore, they should be a qualified non-citizen.

Patients can apply for Medicaid coverage for drug and alcohol treatment. But, the amount depends on their coverage qualification. Medicaid drug and alcohol treatment plan includes prescription drugs, inpatient care, and outpatient services.

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Do The Drug Rehab Centers Near Me Accept Medicare and Medicaid?

Many patients want to know whether their Medicaid coverage covers drug rehabilitation services or not. The simple answer is yes. But, they should check their state’s policy before applying. Keep in mind that different rehab centers have different policies.

Some providers don’t accept Medicare and Medicaid for drug rehabilitation treatment. Therefore, you should confirm with the drug rehab center about their policies. Choosing a drug rehab that doesn’t accept Medicare can be expensive, so you won’t want to enroll without being absolutely sure.

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How Many Months of Drug Rehab Does Medicare Cover?

The duration of Medicaid coverage depends on many factors including the condition and treatments of the patients. Furthermore, it also depends on the treatment provider and their benefits. Medicaid doesn’t specify treatment length for every drug abuse patient and instead relies mostly on the treatment process.

Furthermore, each state has different treatment policies and eligibility for drug abuse patients. Therefore, patients should ask their treatment provider before applying. Today, insurance companies have to cover complete treatment expenses and services for substance use disorder. This includes residential, inpatient, and even outpatient treatments. However, outpatient has lower recovery potential, so many rehab centers don’t cover this treatment process.

Inpatient treatment can last up to 90 days and require 5 to 7 days for medical detox. Generally, the duration also depends on the care that the patient requires. Meanwhile, outpatient treatment can last more than a year.

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Inpatient and Outpatient Coverage

Inpatient and outpatient rehab programs include 12 treatment steps that Narcotics and Alcoholics Anonymous use. Both treatment procedures include one-on-one counseling, group therapy, medical care, drug and alcohol education, and family therapy.

Patients have to consult a doctor to determine an effective treatment process between inpatient and outpatient. Doctors will analyze your condition and recommend the treatment based on various factors. These factors are:

  • Mental health
  • The severity of substance abuse
  • Family support
  • Income level
  • Lifestyle

Let’s learn what different types of drug and alcohol treatments offers:


In inpatient drug and alcohol rehab, patients have to stay in the hospital facility throughout their treatment. Both Medicare and Medicaid cover inpatient drug and alcohol abuse treatment programs. During their stay, patients will get room and meals.

The insurance plan for drug rehab only covers benefit periods. The benefit period starts when the hospital enrolls patients for inpatient treatment. It ends when the patient leaves the facility for 60 days of care outside the hospital. During the treatment program, a patient stays inside and outside the hospital multiple times.

Under the Medicare rehab program, you don’t have to pay deductible amounts every time you stay in the hospital. A deductible is an amount that you pay whenever your coverage begins.

When you receive drug abuse treatment at a general hospital, there is no limit to the number of benefit periods. However, when you visit a psychiatric hospital, the insurance plan only covers 190 days for inpatient treatment for a lifetime.


With both, Medicare and Medicaid, you receive health care through an outpatient treatment program. This also includes hospital, lab tests, and psychologist expenses in some cases. The deductible varies depending on the treatment process your doctor recommends.


Rehab treatment coverage also includes prescription drugs that patients require for health condition treatments including anti-seizure medications and Methadone.

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Medicare and Medicaid are fantastic options for those looking for substance abuse treatment who don’t have insurance coverage or the financial ability to pay out of pocket. Knowing if a facility accepts either of these options, how long you may be covered, and which Medicare or Medicaid plans you are eligible for, will help you make the best decision to find your way back home.
There are other options to help with funding rehab treatment too- for example, rehab scholarships and grants.
Reach out to Avenues Recovery today for a facility near you that accepts Medicaid.

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