Substance abuse among adults aged 60 and over is a rapidly growing health issue in the United States, particularly with regards to alcohol and prescription drugs. According to the 2022 National Survey on Drug Use and Health (NSDUH), approximately 4 million people in this age group, representing 7% of the population, had a substance use disorder (SUD) in the past year. Of these individuals, 2.3 million had an alcohol use disorder while 1.8 million had a drug use disorder. Many older adults feel ashamed about their substance abuse and hesitate to seek help. However, Medicare provides coverage for rehab and treatment of these conditions. Medicare Part A covers inpatient substance abuse treatment, while Part B covers outpatient treatment. The expenses covered for the treatment of alcoholism and substance use disorders include therapy, patient education, follow-up after hospitalization, prescription drugs through Medicare Part D, and structured assessments and interventions. Inpatient treatment may require a standard deductible, and Medicare Advantage plans may have different coverage rules. Supplemental Medicare insurance and Medicaid can also provide additional coverage for rehab. Changes planned for 2024 aim to increase access to mental health providers and outpatient treatment options. Overall, Medicare coverage offers significant support for rehab services related to drug and alcohol addiction.

What Medicare covers for rehab

Medicare provides coverage for the treatment of alcoholism and substance use disorders in both inpatient and outpatient settings. This coverage is available through Medicare Part A and Medicare Part B.

Medicare Part A covers inpatient substance abuse treatment

Under Medicare Part A, individuals can receive coverage for inpatient substance abuse treatment. This includes services provided in a hospital or treatment facility. Medicare Part A covers the standard deductible for each inpatient hospitalization, which is currently $1,632 in 2024. After the deductible has been met, Medicare covers expenses up to 60 days. For days 61-90, beneficiaries are responsible for a $400 copayment per day. Additionally, for lifetime reserve days, beneficiaries are responsible for an $800 copayment per day.

Medicare Part B covers outpatient substance abuse treatment

Medicare Part B provides coverage for outpatient substance abuse treatment. This includes services received from a hospital outpatient department or clinic. Outpatient treatment may involve therapy, patient education, follow-up after hospitalization, and prescription drugs. Medicare Part B also covers prescription drugs through Medicare Part D for outpatient treatment. If a beneficiary requires inpatient treatment, Medicare Part B covers prescription drugs, including Methadone.

Expenses covered for the treatment of alcoholism and substance use disorders

Medicare covers various expenses related to the treatment of alcoholism and substance use disorders. These include therapy, which can be provided in both inpatient and outpatient settings. Patient education is also covered to help individuals better understand their condition and develop strategies for recovery. Medicare also covers follow-up services after hospitalization to ensure the continuity of care. Prescription drugs are covered through Medicare Part D for outpatient treatment, and for inpatient treatment, prescription drugs including Methadone are covered. Finally, Medicare covers the use of Structured Assessment and Brief Intervention (SBIRT) to screen and provide early intervention for risky substance use behaviors.

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Without a diagnosis of SUD

Even without a formal diagnosis of a substance use disorder (SUD), individuals who are showing early signs of substance abuse or dependency may still qualify for assistance. In these cases, individuals may be eligible for Structured Assessment and Brief Intervention (SBIRT).

Structured Assessment and Brief Intervention (SBIRT)

SBIRT is an outpatient early intervention process that consists of three parts. First, there is a screening assessment to identify risky substance use behaviors. Next, there is a brief intervention, which involves addressing the identified risky substance use with the patient. Finally, there is a referral for therapy or additional treatment if necessary. SBIRT provides an opportunity for early intervention and support, helping individuals address their substance abuse concerns before they develop into more severe problems.

Inpatient treatment

For individuals who require inpatient treatment at a hospital or treatment facility, specific coverage and cost-sharing apply.

Standard deductible for each inpatient hospitalization

Medicare Part A covers the standard deductible for each inpatient hospitalization. In 2024, this deductible amount is $1,632. It is important to note that this deductible applies to each hospitalization, so it may be incurred multiple times if a person requires multiple inpatient stays.

Coverage up to 60 days

After the deductible has been met, Medicare Part A provides coverage for inpatient substance abuse treatment for up to 60 days. During this period, Medicare covers the costs associated with treatment, including therapy, prescription drugs, and other necessary services.

Beneficiaries pay a $400 copayment per day for days 61-90

If an individual’s inpatient stay extends beyond the initial 60 days, Medicare requires beneficiaries to pay a $400 copayment per day for days 61-90. This copayment helps offset the cost of the extended stay and contributes to the overall cost-sharing for the treatment.

Beneficiaries pay $800 per day up to lifetime reserve days available

If an individual’s inpatient stay continues beyond the 90th day, additional costs come into play. Beneficiaries are responsible for an $800 copayment per day for each lifetime reserve day used. Lifetime reserve days are limited and vary depending on the individual’s Medicare coverage.

Inpatient stays in a psychiatric hospital

For individuals who require inpatient treatment in a psychiatric hospital, there are specific limitations on Medicare coverage.

Medicare coverage is limited to up to 190 days of hospital services in a lifetime

If an individual requires inpatient treatment in a psychiatric hospital, Medicare coverage is limited to a total of up to 190 days of hospital services in a lifetime. This coverage limitation is in place to ensure appropriate utilization of psychiatric services and to manage overall healthcare costs.

Medicare Advantage coverage for rehab

Medicare Advantage (MA) plans are required to offer at least the same coverage as traditional Medicare plans. However, there may be differences in the cost-sharing requirements and coverage options offered by MA plans.

MA plans have the flexibility to modify cost sharing for most Part A and B services

Medicare Advantage plans have the flexibility to modify cost-sharing requirements for most Part A and B services. This means that the deductible, copayment, and coinsurance amounts may vary from those outlined for traditional Medicare. It is important for individuals enrolled in an MA plan to review their plan documents and seek clarification from their plan provider regarding specific coverage details.

Cost-sharing requirements may look different in MA plans

Due to the flexibility granted to Medicare Advantage plans, the cost-sharing requirements for rehab services may differ from those under traditional Medicare. For example, MA plans may charge daily copayments for inpatient hospital stays. The exact cost-sharing requirements will vary depending on the specific MA plan in which an individual is enrolled.

Examples of cost savings tools MA plans use

Medicare Advantage plans utilize various cost-saving tools to manage the delivery of rehab services. These tools include prior authorization requirements, coverage restrictions to in-network providers, and referral requirements for certain services. These measures aim to ensure efficient and appropriate use of healthcare resources while providing necessary coverage for individuals.

Prior authorization requirements

Prior authorization is a common requirement in Medicare Advantage plans for mental health and substance use disorder services. According to analysis by KFF, almost all Medicare Advantage enrollees (98%) in 2022 were in plans that required prior authorization for some of these services. Prior authorization aims to ensure that the treatment being sought is medically necessary and appropriate for the individual’s specific needs.

Coverage only for in-network providers

Medicare Advantage plans often have restrictions on coverage for out-of-network providers for outpatient mental health and substance use disorder services. In 2022, approximately 60% of Medicare Advantage plan participants had plans that did not cover out-of-network outpatient services for these conditions. It is important for individuals to understand their plan’s network restrictions and seek services from in-network providers to ensure maximum coverage.

Referral requirements

Some Medicare Advantage plans may have referral requirements for certain mental health and substance use disorder services. In 2022, around a quarter (26%) of Medicare Advantage participants were in plans that required referrals for these services. Referrals may be necessary to ensure appropriate coordination of care and to ensure that individuals are directed to the most appropriate providers for their specific needs.

Medigap and Medicaid coverage for rehab

Medigap, or supplemental Medicare insurance, can provide additional coverage for deductibles and other addiction treatment expenses not covered under basic Medicare. Medigap plans are purchased in addition to traditional Medicare and can help bridge the coverage gaps by providing additional financial protection.

Medicaid coverage for rehab varies by state. Each state has its own Medicaid program, and coverage options may differ. Individuals who are eligible for Medicaid should consult their state’s Medicaid agency for information on coverage for rehab services.

More help for substance use disorder in 2024

Recent changes and initiatives aim to improve access to substance use disorder treatment and support services for Medicare beneficiaries.

Expanded provider base

Starting in 2024, over 400,000 marriage and family therapists and mental health counselors will be able to provide services directly to people on Medicare and receive direct payment. Previously, these providers had to be supervised by a billing physician. This change will help expand the provider base and increase access to much-needed services.

Adequate number of outpatient behavioral health facilities

Medicare Advantage plans will be required to include an “adequate number of outpatient behavioral health facilities” in their provider networks for therapy and substance use disorder treatment. This requirement aims to ensure that individuals have access to the necessary facilities and providers to receive appropriate care.

Intensive outpatient (IOP) services

In 2024, Medicare beneficiaries will have access to a new program called intensive outpatient (IOP) services. This program serves as an alternative to traditional hospitalization for individuals requiring substance use disorder treatment. Patients can receive 9-20 hours of outpatient services per week in a wider variety of settings, including hospital outpatient departments, community mental health centers, federally qualified health centers, rural health clinics, and opioid treatment programs. This expansion of outpatient services provides more options and flexibility for individuals seeking substance use disorder treatment.

Conclusion

Medicare provides comprehensive coverage for the treatment of alcoholism and substance use disorders in both inpatient and outpatient settings. Medicare Part A covers inpatient treatment, while Medicare Part B covers outpatient treatment and prescription drugs. Expenses covered include therapy, patient education, follow-up care, and prescription drugs. Individuals who are showing early signs of substance abuse or dependency may qualify for early intervention services through SBRIT. Medicare Advantage plans offer coverage for rehab services, but cost-sharing requirements may vary. Medigap and Medicaid can provide additional coverage for deductibles and other expenses. Changes in 2024 will expand the provider base, ensure access to outpatient facilities, and introduce intensive outpatient services as an alternative to hospitalization. With Medicare’s coverage for rehab, individuals can access the necessary support and treatment for their substance use disorders.

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