Understanding Medicare and Substance Abuse Treatment

Retirement is meant to be the stage of life where you can relax and enjoy your free time. However, financial stress, grief, deteriorating health and social isolation can lead to some older adults turning to drugs or alcohol. “Substance Use Disorder” is the medical term for drug and alcohol addiction, and it impacts a growing number of seniors. Medicare can be a great resource for people who want help treating this disorder, but it can be confusing to understand what types of treatment are covered and the costs involved.

Thankfully, the government recognizes that substance abuse is a growing problem for older adults. A 2018 study by the Substance Abuse and Mental Health Services Administration found that nearly 1 million people in the United States aged 65 and older live with substance use disorder. In addition, 65% of seniors report high-risk drinking in the past year, and 10% report binge drinking.

Unfortunately, older adults are also more vulnerable to the effects of drugs and alcohol; seniors metabolize substances more slowly, and their brains are more sensitive to drugs. The effects of some substances, such as impaired coordination and slower reaction times, can also lead to accidents and falls that pose a greater risk to seniors. Treating Substance Use Disorder in older adults can help seniors live happier and more independent lives, which is why Medicare covers many forms of treatment.

This guide provides an overview of how Medicare can help pay for substance abuse treatments. It also goes into detail about different treatment options, whether they’re covered by Medicare, any eligibility criteria for Medicare payments and the cost of the treatment.

Medicare is a public health insurance program available to people aged 65 and over, as well as individuals with certain disabilities under 65 and those with end-stage renal disease. Original Medicare comes in two parts. Part A covers hospital care, while Part B covers other types of medical care such as doctor’s visits and mental health services. Substance abuse treatments can be covered by both Part A and Part B.

Beneficiaries can choose a Medicare Advantage plan rather than Original Medicare. Also known as Part C, Medicare Advantage combines Parts A and B into a single plan provided by a private insurer. These plans must be approved by Medicare and must provide the same benefits as Original Medicare. Therefore, substance abuse treatments covered by Original Medicare are also covered by Medicare Advantage plans. However, Medicare Advantage providers can set their own rules regarding copays, deductibles and coinsurance, so out-of-pocket costs may be different. These plans can also offer extra benefits not generally included in Original Medicare.

One type of Medicare Advantage plan is the Special Needs Plan (SNP). These plans are only available to people with certain severe or disabling chronic conditions and tailor benefits, provider choices and covered medications to suit the needs of the group they serve. Chronic alcohol and drug dependence are two of the conditions covered by SNPs; however, these plans aren’t offered everywhere. If there’s one offered in your area, you may find it provides broader coverage for substance abuse treatment than Original Medicare or a general Medicare Advantage plan.

If you need help paying for medications to treat substance abuse, you’ll want to consider prescription drug coverage. In Original Medicare, this is a separate Part D plan offered by private insurers. Most Medicare Advantage plans include prescription drug coverage.

The final type of insurance for Medicare enrollees to consider is Medigap, or Medicare Supplement Insurance. Also offered by private companies, these plans can help you cover some of the out-of-pocket costs associated with health care. As each plan is different, you need to check whether it can pay for the deductible, copay or coinsurance costs of substance abuse treatment.

Medicare covers some mental health services, which includes treatment for substance abuse. 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. In addition to premiums, both Part A and Part B have a deductible, which 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 cover you for up to 60 days. Once the lifetime reserve days are used up, you must pay for the full cost of any days in the hospital beyond the 90 covered in the benefit period. As the name suggests, you only have 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 abuse 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.

Inpatient treatment options are generally covered by Medicare Part A as a hospital stay, as well as Medicare Advantage. While beneficiaries typically have 90 days of hospital stays per benefit period, plus the lifetime reserve days, 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 psychiatric hospitals; mental health and substance abuse treatment provided at a general hospital follows the rules of a Part A hospital stay.

What Is It?

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, and may be considered a specialized psychiatric hospital, depending on the facility. However, many private facilities aren’t enrolled with Medicare, so it’s important to check your payment options with the provider.

Eligibility Requirements

The treatment must be reasonable and medically necessary to help you recover from substance abuse disorder. In practice, this means a doctor must deem it medically necessary.

Treatment Cost

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.

What Is It?

As with rehabilitation centers, medically managed intensive inpatient care provides 24-hour care to people with substance abuse disorders. The difference is that medically managed intensive inpatient care is for people who require medical stabilization. This generally means that 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.

Eligibility Requirements

The treatment must be deemed medically necessary by a doctor.

Treatment Costs

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.

What Is It?

Skilled Nursing Facilities provide long-term care for people who can’t care for themselves, and some specialize in providing help for older adults struggling with substance abuse. These nursing homes provide similar in-house treatment as rehabilitation facilities, as well as personal care and other assistance often required by seniors. 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 abuse treatment.

Medicare Coverage

Medicare Part A may cover nursing home care for a limited time, as long as all the conditions 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 $7,908 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 Medicare is:

• Days 1-20: $0 per day
• Days 21-100: Up to $194.50 per day
• Days 101 and beyond: Full cost

Most outpatient treatments for substance abuse 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.

What Is It?

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.

What Is It?

Individual therapy consists of one-on-one counseling sessions with trained professionals. When used as part of substance abuse 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 or Medicare Advantage.

Eligibility Requirements

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

Treatment Costs

The cost of therapy before insurance averages $60-$120 per session. Original Medicare pays 80% of the cost after your deductible is met.

What Is It?

Group therapy sessions can be conducted by one or two psychologists and there are generally between 5 and 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. Support groups are a similar concept, but they don’t necessarily 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 abuse treatment.

Treatment costs

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

What Is It?

SBIRT stands for “screening, brief intervention, and referral to treatment services”. This early intervention approach is aimed at people who have nondependent substance use. It 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 substance abuse 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. These are also 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.

What Is It?

Toxicology tests look for traces of drugs in your blood, urine, hair, sweat or saliva. As part of substance abuse treatment, these tests can help people admit that they have a problem. Ongoing testing can also show a person’s improvement over time and stop them from hiding relapses.

Medicare Coverage

As testing can be beneficial, it’s covered when used to manage treatment. It can also be used for diagnostic purposes. 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.

What Is It?

Opioid treatment programs (OTPs) are 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 three FDA-approved medications used in OTPs: methadone, buprenorphine and naltrexone, which are opioid agonists that can reduce cravings and withdrawal symptoms. OTPs can provide methadone for opioid use disorder, but the other drugs can be prescribed and dispensed in non-OTP medical clinics.

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 abuse treatment medications for people who aren’t enrolled in an OTP 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, and any drugs provided during inpatient treatment are generally covered through Medicare Part A, rather than being billed separately.

If you’re living with addiction, you may have other health concerns. Seniors with substance abuse disorders may also face financial hardships. Our Medicare page has information about how the program can help you with other health conditions and alleviate some of the financial stress associated with obtaining medical care.