Medicare Coverage For Drug Rehab: Substance Abuse Insurance

Last Updated: June 3, 2020

Medicare insurance covers 60 million Americans. This means that a massive portion of the U.S. population is dependent upon it for accessing Medicare drug rehab coverage. It is vital that all people with this coverage understand what their policy allows for and how to use Medicare for substance abuse rehab.

Does Medicare Cover Drug Rehab?

Medicare coverage does not have a specific benefit category for substance abuse services. However, this does not mean that it fails to cover them. In most cases, the services used for drug rehab fall under the umbrella of behavioral health services. This is a category within Medicare coverage, which means that the program does cover drug rehab for anyone enrolled in the program across the United States.

Who Is Eligible For Medicare Insurance?

Medicare is fairly restrictive in who it will cover:

  • The first class of people is those who are 65 or older.
  • The second are younger people who have disabilities that qualify them for early coverage.
  • Finally, anyone with end-stage renal disease who requires dialysis or transplant.

Anyone can determine their eligibility for Medicare drug rehab coverage or other forms of coverage easily. They simply need to use the Medicare eligibility tool.

Criteria For Drug Rehab Coverage

Once someone is eligible for rehab, they need to enroll. After enrollment, however, they do not just have open access to Medicare alcohol rehab coverage or any other form of rehabilitation. There will still be criteria that the individual must meet; these criteria are:

  • Their provider states that the specific rehab services being sought are medically necessary for the patient.
  • The services are rendered by an approved provider or facility
  • Their provider sets up the plan of care

Substance Abuse Services Covered Under Medicare

Given that Medicare drug rehab coverage is not open-ended, it is important that anyone looking to use it for addiction recovery knows what the limits are. All essential elements of rehab are covered, but some extras or alternative therapies are not. Below are the services most commonly covered:

  • Patient education centered on diagnosis and treatment
  • Psychotherapy
  • Post-hospitalization follow-up
  • Prescription drugs administered during a hospital stay or injected at a doctor’s office
  • Methadone could be covered in inpatient hospital settings, but not in outpatient clinics
  • Outpatient prescription drugs covered by Part D
  • Structured Assessment and Brief Intervention (SBIRT) services provided in a doctor’s office or outpatient hospital.

Inpatient Rehab Treatment

Inpatient treatment is part of hospital care, which means that it falls under Part A. Medicare coverage for the rehabilitation facility is governed by the patient’s plan’s cost-sharing rules. Whatever their plan lists for an inpatient hospital stay is what will apply to Medicare coverage of treatment for alcoholism and drug abuse.

Outpatient Rehab Treatment

Outpatient treatment is rendered at a clinic or hospital outpatient department. This means that it falls under the coverage of Part B. Part B does have a deductible that must be met. Once the patient has cleared this hurdle, Medicare will pay for 80% of the cost of treatment. If the individual has an Advantage Plan, they will need to contact the plan to find out their cost for outpatient care. Medicare rehab coverage days are not limited to outpatient treatment like they are for residential facilities.

Partial Hospitalization Treatment

Medicare offers coverage for partial hospitalization treatment. This is a day treatment program where the patient receives intense psychiatric treatment during the day but gets to return to their home at night. For such a program to be covered for substance abuse, the patient must be working with a physician who certifies and recertifies their need for treatment. They must also receive, at minimum, 20 hours a week of PHP therapy. Because this is an outpatient treatment, even if conducted at a hospital, it is covered under Part B.

doctor taks with patient about prescribed drugs


Standing for Screening, Brief Intervention, and Referral to Treatment, SBIRT services allow for early intervention in those individuals who are engaging in substance abuse but are not yet addicted. Medicare coverage helps users connect with this service when they have severe non-addicted substance use or if they meet the criteria of substance use disorder without dependence.

SBIRT services work to prevent problematic use from turning into an addiction or resulting in the death of the user. SBIRT services are offered in primary care settings, and as such, are included under Part B. It can be broken down as follows:

  • A structured assessment is used to determine if the patient is engaging in risky substance use behaviors
  • The patient is engaged in a short conversation with feedback and advice, which serves as an intervention
  • The patient is referred to treatment based on the results of their assessment

Medicare Coverage Plans

Medicare coverage plans can be placed into two categories: Original and Advantage. These two types of coverage are pretty similar but have some key differences.

Original Advantage
Includes Part A and Part B Includes Part A, B, and D
Users can enroll in Part D separately Users automatically have Part D
Supplemental insurance is often needed Supplemental insurance is not allowed
Users tend to pay more out of pocket Out-of-pocket costs tend to be lower
Vision, hearing, and dental are not covered Vision, hearing, and dental may be covered
Users can see any doctor who accepts Medicare Users must stick with doctors in their network
Referrals are generally not required Referrals generally are needed
There is no yearly limit There is a yearly limit

Which plan is best for Medicare coverage for rehab will depend on the needs of the individual. Before someone selects a plan, they need to understand the alphabet soup of Medicare.

Part A

Medicare Part A is hospital insurance. It covers:

  • Inpatient care in a hospital or hospital-like setting
  • Skilled nursing facility care
  • Hospice care
  • Home health care

This is the type of insurance that is used whenever someone seeks Medicare coverage for rehabilitation in a residential facility.

old couple choose an insurance plan

Part B

Medicare Part B is medical insurance covering everything that is outside the scope of hospital care. It covers:

  • Services from doctors and other healthcare providers
  • Outpatient care
  • Home health care not covered under Part A
  • Durable medical equipment
  • Preventative services

Medicare drug rehab coverage for outpatient, partial hospitalization and SBIRT is covered under Part B.

Part C

Medicare Part C is just another name for the Advantage plan. As such, understanding it means knowing what Parts A, B, and D are and how they apply to drug rehab.

Part D

Part D is Medicare’s prescription drug coverage. It covers the cost of prescription drugs and is offered by private insurance companies who follow the rules set. This includes Medicare substance abuse medication coverage.

Drugs that can be covered by Medicare and used for addiction treatment include:

How To Apply For Medicare Coverage Plan

If someone determines they are eligible for coverage, they can head to their local Social Security office to apply.

Once approved, the person must decide what coverage they want: Original or Advantage plan. After that, it is just a matter of making certain they understand their coverage and know how to use it.

Verify Rehab Coverage And Start Treatment

Anyone interested in Medicare drug rehab coverage should first determine if they are eligible. If they are, they need to take steps to enroll and then verify where they can seek treatment. With drug rehab coverage, it is possible to access quality rehabilitation care.

Page Sources

  1. Medicare Coverage of Substance Abuse Services. DEPARTMENT OF HEALTH AND HUMAN SERVICES. 2016.
  2. Who is eligible for Medicare? 2014.
  3. Treatment for alcoholism and substance use disorder. Medicare Interactive.

Published on: October 2nd, 2019

Updated on: June 3rd, 2020


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