Does Medicare Cover Rehab for Drug and Alcohol Addiction?

According to the National Institute on Drug Abuse, close to 1 million seniors aged 65 or older had a substance use disorder (SUD) in 2018. Further, the percentage of the population admitted to treatment facilities for an SUD who were seniors more than doubled between 2000 and 2012. 

Seniors may be particularly vulnerable to the effects of illicit drugs, as they often metabolize substances at a slower rate and their brains are more sensitive to their effects. Many older adults also have multiple chronic conditions and/or suffer from persistent pain, requiring them to take several medications, some of which may be addictive. Alcohol is another commonly overused drug among seniors — 65% of people 65 or older admit to high-risk drinking, and more than a tenth revealing they engaged in binge drinking.   

Seniors wondering “Does Medicare cover alcohol rehab?” or who want to know the costs of undergoing a medical opioid detox will find the answers to their questions in this guide. Below you’ll find an overview of Medicare rehab coverage and an explanation of how the insurance program can help pay for seniors’ substance use treatments.

 

Medicare is a public health insurance program available to people aged 65 and over, as well as people under 65 with certain disabilities, and those with end-stage renal disease. Original Medicare comes in two parts. Part A covers hospital care, including services received as an inpatient at a general or psychiatric hospital.  Part B covers other types of medical care such as doctor’s visits and mental health services. It also covers outpatient and partial hospitalization substance use disorder treatment. 

Medicare Advantage plans, or Medicare Part C, are another way to get Part A and Part B coverage other than Original Medicare and are offered through a private company. Medicare Advantage plans bundle Part A and B benefits in the same plan and provide at least the same amount of coverage as Original Medicare. 

Additional details about Medicare rehab coverage are provided below.  

Rehab-related Services Covered by Medicare

• Services received as an inpatient in a general or psychiatric hospital, including medication-assisted treatment with methadone
• Partial hospitalization at a community mental health center or hospital outpatient department program
• Intensive outpatient services at a hospital, community mental health center, or other qualifying facility
• Opioid Treatment Program services which include medication-assisted treatment with methadone, buprenorphine, and naltrexone, drug testing, substance use counseling, and more
• Outpatient substance use disorder treatment services at a doctor’s office or community mental health center, including substance use counseling, psychotherapy, and more

Medicare Part A covers methadone for people admitted to a hospital and Medicare Part B covers methadone, buprenorphine, and naltrexone administered as part of an Opioid Treatment Program. Other individuals may need coverage through a Medicare prescription drug plan (Part D).

Medicare covers some mental health services, which includes treatment for substance use. Both inpatient and outpatient care may be covered, as long as the treatment is reasonable and necessary.

In all cases, the treatment must be provided by someone licensed by Medicare to offer the services. The treatment must also be approved by Medicare. If you’re unsure if your provider or treatment is covered, it’s best to check with Medicare or your plan provider.

All Medicare plans have some out-of-pocket costs. While only some people pay a Part A premium, everyone pays a Part B premium and both Part A and Part B have a deductible. This is the amount you must pay before Medicare starts to cover medical costs. After you meet the deductible, you’re responsible for paying coinsurance, which is a portion of the costs.

Medicare beneficiaries are covered for up to 90 days in the hospital during each benefit period, which begins the day you’re admitted and ends when you haven’t had any inpatient hospital care for 60 days in a row. If you’re hospitalized for more than 90 days in a benefit period, lifetime reserve days can cover you for up to 60 more days. Once the lifetime reserve days are used up, you must pay for the full cost of any additional days that extend beyond the 90 per each benefit period. As the name suggests, you have only 60 lifetime reserve days, no matter how long you’re enrolled in Medicare.

Medicare Advantage plans make their own rules regarding deductibles, copays and coinsurance. Some plans may have similar out-of-pocket costs, while others may have higher deductibles or copays to balance lower premium costs. Check your plan to understand the costs involved in treatment.

Some substance use treatments may be fully covered, while others may not be covered at all. We list the costs involved with treatments below. Also note that Part B only covers 80% of the Medicare-approved amount. This may be less than the amount charged by your provider, and you’re responsible for the difference.

*These costs apply to Original Medicare plans only; Medicare Advantage plan costs vary.

Inpatient treatment options are generally covered as a hospital stay by Medicare Part A and Medicare Advantage. While beneficiaries typically have 90 days of hospital stays per benefit period, plus lifetime reserve days, Original Medicare has a lifetime cap of 190 days of care in a specialized psychiatric hospital. After this limit is reached, it can’t be renewed. However, this is only for freestanding psychiatric hospitals; mental health and substance use treatment provided at a psychiatric unit within a general hospital follows the rules of a Part A hospital stay. Policies and costs for Medicare Advantage plans may be different, so contact your plan for specific coverage details.  

Also known as residential or inpatient rehabilitation centers, rehab facilities provide 24-hour care for the treatment of addiction. This type of comprehensive care is generally recommended for people with severe or long-term addiction. The exact treatment differs between programs, but can include medication, individual and group therapy and activities such as yoga and meditation. Days are usually very structured to help distract from cravings.

Medicare Coverage

Residential drug rehabilitation in Medicare-approved facilities is covered by Part A and Medicare Advantage. This is treated similar to a hospital stay. If patients receive services in an acute care or critical access hospital, Medicare will cover services for an unlimited number of benefit periods. However, inpatients at a freestanding specialized psychiatric hospital are limited to a lifetime total of 190 days of care. Many private facilities aren’t enrolled with Medicare, so it’s important to check your payment options with the provider.

Eligibility Requirements

A doctor must attest that treatment is reasonable and medically necessary to help you recover from substance use disorder. 

Treatment Costs

Those with Original Medicare pay a $1,632 deductible and $0 coinsurance for the first 60 days. Costs with Medicare Advantage depend on the specific plan. For people without insurance, the full cost of treatment at a rehab facility can range from $6,000-$20,000 for a 30-day program. Longer programs are more expensive.

As with rehabilitation centers, medically managed intensive inpatient care provides 24-hour care to people with substance use disorders. The difference is that medically managed intensive inpatient care is for people who require medical stabilization because they’re experiencing severe withdrawal symptoms and must be monitored as they complete a medical detox. Some rehab facilities may offer both medical detox and a rehabilitation program.

Medicare Coverage

This type of care is a hospital stay covered by Medicare Part A and Medicare Advantage. If it’s provided in a psychiatric hospital, it will count toward the mental health hospital lifetime cap of 190 days.

Eligibility Requirements

The treatment must be deemed medically necessary by a doctor.

Treatment Costs

Patients who have Original Medicare coverage will pay a $1,632 deductible and $0 coinsurance for the first 60 days of treatment. Medicare Advantage costs vary by plan. For people without insurance, the cost of medical detox generally ranges from $600-$1,000 per day and there’s usually a minimum stay of 7 days. There may be medication costs on top of this, especially for people who need to continue taking medications once they’re released.

Skilled Nursing Facilities (SNF) provide long-term care for people who can’t care for themselves. Some SNFs specialize in providing help for older adults struggling with substance use, offering similar treatments as rehabilitation facilities, as well as personal care and other assistance. However, these specialized facilities can be difficult to find. Regular skilled nursing care is also an option, but it’s unlikely to offer specific substance use treatment.

Medicare Coverage

Medicare Part A may cover nursing home care for up to 100 days per benefit period, as long as all requirements are met. Medicare Advantage plans may have broader coverage. Long-term stays in skilled nursing facilities are also covered by Medicaid.

Eligibility Requirements

To be eligible for Medicare coverage, a doctor must decide that you need daily skilled care. You must have a qualifying inpatient stay and need daily services to address the medical condition treated during that stay, or a condition that developed while you were in the hospital, such as an infection. You must also have days left in your benefit period.

Treatment Costs

The average monthly cost of nursing home care in the United States is $8,669 for a semiprivate room, although that figure varies widely depending on where you live and the care you’re receiving. For qualifying short-term stays, your coinsurance with Original Medicare is:

• Days 1-20: $0 per day
• Days 21-100: Up to $204 per day
• Days 101 and beyond: Full cost

If you are enrolled in a Medicare Advantage Plan, costs may be different depending on the plan. This may mean you will be charged copayments during the first 20 days.

Most outpatient treatments for substance use disorder are looked at on an individual basis. This means that if someone is getting a full suite of treatments, each one is considered separately for coverage by Medicare.

Partial hospitalization is an intensive outpatient treatment program. Participants go to the facility each day to participate in a range of therapies and return home at night. Provided services can include diagnostics, family counseling, individual and group therapy, patient education and the services of social workers and occupational therapists. Partial hospitalization is an alternative to hospitalization for people who need intensive help but have a safe home to return to.

Medicare Coverage

Also known as intensive outpatient programs (or IOPs), partial hospitalization is covered by Medicare Part B. It uses a wide range of services to help people and only those recognized by Medicare are covered. For example, individual therapy sessions are covered, but a mindfulness class may not be. Daily transportation to the facility and meals provided during the day are also not covered by Original Medicare, although medical transportation may be included in your Medicare Advantage plan.

Eligibility Requirements

As with other treatments, partial hospitalization must be considered reasonable and necessary to be covered by Medicare. Services must also be provided under the direct supervision of a physician based on an individualized treatment plan. Claims may be denied if there’s no direct supervision.

Treatment Costs

The average cost of partial hospitalization is $350-$450 per day without insurance. Medicare Part B covers 80% of the cost once your deductible is paid, although out-of-pocket costs can be different for Medicare Advantage beneficiaries.

Individual therapy consists of one-on-one counseling sessions with trained professionals. When used as part of substance use treatment, individual therapy can help people understand the nature of their addiction, recognize their triggers, enhance mindfulness, and improve communication with their loved ones.

Medicare Coverage

Individual therapy is covered by Medicare Part B as well as by Medicare Advantage.

Eligibility Requirements

These sessions must be deemed medically necessary to treat your substance use disorder.

Treatment Costs

The cost of therapy before insurance averages $100-$200 per session. Original Medicare pays 80% of the cost after your Part B deductible is met. Costs under Medicare Advantage plans vary.

Group therapy sessions can be conducted by one or two psychologists and there are generally between 5-15 participants. This type of therapy can help people build a support network, find accountability, and put their own problems into perspective.

Medicare Coverage

Medicare Part B and Medicare Advantage cover group therapy provided by a doctor or other health care provider. Support groups are similar, but may not have a psychologist running the session. For example, 12-step programs such as Alcoholics Anonymous can be considered a type of support group. Costs related to support groups aren’t covered by Medicare, although many of these programs are free to attend.

Eligibility Requirements

Group therapy must be medically necessary for your substance use treatment.

Treatment costs

Group therapy costs an average of $40-$70 per session. Medicare pays 80% of the cost once your Part B deductible is met. Medicare Advantage costs vary by plan.

SBIRT stands for “screening, brief intervention, and referral to treatment services.” This early intervention approach is aimed at people who have nondependent substance use. SBIRT consists of three parts:

• Structured assessments that use standardized screening tools to identify risky substance use behaviors
• Brief interventions consisting of short conversations, feedback and advice
• Referrals to additional treatments, such as therapy, if required

These are effective strategies to treat people either with a substance use disorder or people at risk of developing a substance use disorder before specialized or intensive help is needed.

Medicare Coverage

SBIRT is covered by Medicare Part B and Medicare Advantage. Medicare covers a yearly screening at no cost. When risky substance use behavior is identified, four brief face-to-face counseling sessions are provided free of charge.  

Eligibility Requirements

These services are covered if the treatment is deemed as medically necessary.

Treatment Costs

There are no specific out-of-pocket costs for SBIRT, however if the doctor orders additional testing, such as blood tests, there may be costs involved.

Toxicology tests can help doctors find traces of drugs in a patient's blood, urine, hair, sweat, or saliva. As part of substance use treatment, these tests can help people admit that they have a substance use problem. Ongoing testing can also show a person’s improvement over time and determine if they experience relapses.

Medicare Coverage

Drug testing is covered when used to diagnose disorders or manage treatment. These tests are covered by Medicare Part B and Medicare Advantage.

Eligibility Requirements

The toxicology tests must be medically necessary. If ongoing tests are being used, they generally need to be part of a treatment plan.

Treatment Costs

Toxicology tests cost between $30 and $50. Most Medicare-approved tests are fully covered with no out-of-pocket costs.

Opioid treatment programs (OTPs) use medication-assisted treatments for opioid use disorder. These programs combine approved medications with counseling, therapy and assessments to produce effective results for participants. 

There are four FDA-approved medications used in OTPs. Methadone, buprenorphine, and naltrexone are opioid agonists that can reduce cravings and withdrawal symptoms, while naloxone can be used to treat opioid overdose. Buprenorphine and naltrexone can also be prescribed and dispensed in non-OTP medical clinics. Naloxone is available without a prescription.

Medicare Coverage

Medicare Part B and Medicare Advantage provide bundled coverage of OTPs, which includes the prescription as well as the dispensing and administration of the medication. Counseling, therapy, toxicology testing, intake activities, and periodic assessments are also covered. People are enrolled in these programs for at least a year.

Eligibility Requirements

The service must be medically necessary and provided by a Medicare-enrolled clinic.

Treatment Costs

The cost varies depending on the medication taken and can range from around $6,000 to more than $14,000 for a 12-month treatment program. However, there are no coinsurance costs once you meet the deductible.

Coverage for substance use treatment medications for people who aren’t enrolled in an OTP or an inpatient program at a hospital or psychiatric facility is based on the individual’s prescription drug coverage. Those enrolled in Original Medicare need a Part D plan, while most Medicare Advantage plans include coverage for prescription drugs. Because these plans are offered by private insurers, the exact coverage provided and the related out-of-pocket costs can differ.

Plans publish formularies that list all the drugs they cover. They must include drugs that are medically necessary for the treatment of opioid dependence. Additionally, plans must have a transition policy that ensures new enrollees continue to have access to their medication without interruption.

Methadone is a notable exception to Part D coverage. Medicare Part D plans cover medications “that may be dispensed only upon a prescription.” As methadone used for opioid dependence can’t be dispensed by retail pharmacies, it isn’t covered by Part D. However, it’s covered if you’re enrolled in an OTP or a hospital inpatient under Medicare Part A.

A Summary of Medicare coverage for medication-assisted treatment medications:

Methadone

• Covered by Medicare Part A for hospital inpatients as a treatment for a substance use disorder
• Covered by Medicare Part B in an Opioid Treatment Program
• Not covered by Medicare Part D

Buprenorphine, naltrexone, and/or Naloxone:

• Covered by Medicare Part B in an Opioid Treatment Program
• Covered by Medicare Part D

Seniors living in independent living, assisted living, memory care, or other facilities may need treatment for a substance use disorder in addition to their other needs. Medicare covers inpatient and outpatient treatment options as well as free screenings and counseling for alcohol, opioid, and other substance use disorders. Medicare rehab coverage can save seniors thousands of dollars on their costs of treatment. 

• Average cost of drug rehab. (2022). National Center for Drug Abuse Statistics
• Costs. (n.d.). Medicare.gov
• Cost of care survey. (2023). Genworth
• Mental health and substance use disorders. (n.d.) Medicare.gov
• Mental health care (partial hospitalization). (n.d.). Medicare.gov
• Opioid treatment programs. (n.d.). Centers for Medicare and Medicaid Services
• Opioid use disorder treatment. (n.d.). Medicare.gov
• Reimbursement for SBIRT. (2017). American Society of Addiction Medicine
• Screening, brief intervention, and referral to treatment services. (2023). Department of Health and Human Services
• Substance use in older adults. (2020). National Institute on Drug Use