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Alcohol & Health
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Updated on August 21, 2023
6 min read

Paying For Addiction Treatment With Medicaid And Medicare

What are Medicaid and Medicare?

Medicaid and Medicare are government funded health programs that help eligible people cover some or all of the costs of their healthcare needs.1

While Medicaid and Medicare plans vary, they all include at least some coverage for substance abuse treatment, addiction treatment, and mental health services.

People often confuse Medicaid and Medicare, but they are not the same program. Medicaid is a federal and state public health insurance program. It is available to low-income American families and individuals. These beneficiaries are guaranteed coverage under Medicaid.1

Medicare, however, is a federal benefits program for people 65 years old and up, regardless of their income. It is also available to some people who are under 65 years old and have a disability.1

Medicaid Eligibility Requirements

Medicaid is funded by the U.S. government and individual states in the United States.3

With the Children’s Health Insurance Program (CHIP), Medicaid offers coverage to more than 72.5 million Americans. It is the biggest source of healthcare coverage in the country.3

Medicaid is available to low-income families and people with qualifying disabilities. This includes:

  • Pregnant women
  • Children
  • Anyone receiving Supplemental Security Income (SSI)

Some states also offer other options and cover additional groups of people. For example, they include coverage for those who need home- or community-based services. Some also cover children in foster care.3

The Affordable Care Act (ACA) allows states the opportunities to expand Medicaid so that it covers almost all low-income Americans under 65.3

Income eligibility for Medicaid is based on your Modified Adjusted Gross Income (MAGI). MAGI takes into account your taxable income and tax filing relationships. To be eligible for Medicaid, you have to earn less than 133 percent of the federal poverty level (FPL).3

However, some people are exempt from the MAGI income requirements. This includes anyone whose Medicaid eligibility is based on disability, blindness, or age for those 65 and older.

Medicaid eligibility for anyone who has a disability, blindness, or is 65 or older is based on the SSI program’s methodologies.

To be eligible for Medicaid, you also have to meet other non-financial requirements. You must be a:3

  • Resident of the state in which you’re receiving Medicaid
  • Citizen of the United States or a qualified non-citizen (such as a lawful permanent resident)

Medicare Eligibility Requirements

Medicare is available for qualifying individuals for a monthly premium. The premium price depends on your income.4

There are four types of Medicare:4

  • Medicare Part A: This includes inpatient hospital coverage.
  • Medicare Part B: This includes outpatient medical coverage.
  • Medicare Part C: This is a Medicare Advantage Plan. Some of the most common Medicare Advantage Plans include:
    • Health Maintenance Organizations (HMOs)
    • Private Fee-for-Service Plans (PFFS)
    • Preferred Provider Organizations (PPOs)
  • Medicare Part D: This includes prescription drug coverage.

To qualify for a Medicare plan, you must meet the following criteria:4

  • Be 65 years old or older
  • Be a United States citizen or a lawful permanent resident who has lived in the United States for at least 5 years
  • Have worked for 10 years and paid Medicare taxes (paying Medicare taxes for 10 full years means that you won’t have to pay premiums for Medicare Part A)

Some people under 65 may also qualify for Medicare health benefits if they have disabilities or other medical conditions.

You can apply for Medicare 3 months before or after your birth month when you turn 65.


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Does Medicaid Cover Drug and Alcohol Rehab?

Yes, Medicaid covers rehabilitation services and substance abuse treatment. Medicaid may offer free or low-cost substance abuse coverage.5

Under the Affordable Care Act (ACA), insurance providers, including Medicaid, are obligated to provide coverage for drug and alcohol addiction.

In 2009, insurance payers spent $24 billion on substance use disorder (SUD) treatment. Medicaid made up 21 percent of that $24 billion.5

However, not all drug or alcohol addiction treatment facilities accept Medicaid. It is important to ask if your chosen addiction treatment center accepts Medicaid and has space available. 

Because Medicaid reimbursement rates for medical care are usually significantly less than other commercial or Medicare reimbursement rates, many facilities limit admissions.

Addiction Treatment Services Medicaid Covers 

Medicaid coverage helps with all or at least some of the cost of addiction treatment services. These include:1

Does Medicare Cover Drug and Alcohol Rehab?

Medicare covers alcohol and drug abuse and addiction services, including rehabilitation. 

However, the four different parts of Medicare coverage offer different options for substance abuse treatment.

Addiction Treatment Services Medicare Covers

Generally, Medicare coverage includes many addiction treatment services. These include: 2,6

  • Patient education on alcohol dependence
  • Therapy and other mental health services
  • Hospitalization
  • Post-hospitalization follow-up
  • Opioid treatment programs
  • Toxicology testing
  • Mental health services for patients and their families

Medicare parts A, B, C, and D cover different services. For example, Medicare Part A covers: 6

  • Hospital stays
  • Inpatient treatment for up to 190 days
  • Up to 60 days in treatment without a co-insurance

Medicare Part B covers:

Meanwhile, Medicare Part C offers additional benefits. Still, you may have to pay out of pocket to cover some of your healthcare costs.

Medicare Part D covers some or all of the costs of addiction medications. These include medications to maintain sobriety, treat withdrawal symptoms, and curb cravings.


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How to Find a Rehab Facility That Takes Medicaid or Medicare

If you or someone you know is struggling with alcohol or drug abuse or addiction, reach out for help. Many inpatient and outpatient rehabilitation centers take Medicaid and Medicare.

To find a rehab center that takes your Medicaid or Medicare coverage, follow these steps:

1. Shop Around for a Healthcare Provider

Call various rehab centers to learn whether or not they accept your Medicare or Medicaid plan. Check if they have space available to care for you or your loved one.

2. Ensure That Your Doctors Accept Your Plan

Not all doctors practicing at a treatment center accept the same insurance plans. Ask the center if any healthcare providers accept your Medicaid or Medicare plan.

3. Keep Your Options Open

You don’t have to stick with one treatment center or program if it is not serving your recovery needs. Many places accept Medicare and Medicaid.

Just be sure to find a program that accepts your Medicaid or Medicare plan and has space available before you leave your current program. 

Cutting back on or quitting substances like alcohol can be dangerous and even deadly without professional help. Also, the long-term cost of addiction is often more expensive than treating it.


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Who is Eligible for Dual Coverage?

Some people may be eligible for dual coverage.

Seniors who live in nursing homes may be eligible for both Medicaid and Medicare. They qualify for Medicare based on their age and Medicaid based on their financial situation.

Some Medicare beneficiaries who are younger than 65 and have access to Social Security Disability Insurance (SSDI) may also be eligible for Medicaid benefits.

If you or someone you know is coping with drug abuse or alcohol addiction, seek treatment immediately. Reach out to a healthcare provider to find options that accept Medicaid or Medicare.

Updated on August 21, 2023
6 sources cited
Updated on August 21, 2023
All Alcoholrehabhelp content is medically reviewed or fact checked to ensure as much factual accuracy as possible.

We have strict sourcing guidelines and only link to reputable media sites, academic research institutions and, whenever possible, medically peer reviewed studies.
  1. Differences between Medicare and Medicaid.” Medicare Interactive, 13 Jan. 2022.
  2. Medicare Coverage of Mental Health and Substance Abuse Services.” Center for Medicare Advocacy, 24 Sept. 2019.
  3. The Official U.S. Government Site for Medicaid.” Medicaid.
  4. The Official U.S. Government Site for Medicare.” Medicare.
  5. Substance Use Disorders.” Medicaid.
  6. Treatment for Alcoholism and Substance Use Disorder.” Medicare Interactive, 23 Apr. 2020.
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All content created by Alcohol Rehab Help is sourced from current scientific research and fact-checked by an addiction counseling expert. However, the information provided by Alcohol Rehab Help is not a substitute for professional treatment advice.
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