Key takeaways:
Substance use disorder occurs when a person’s involvement with alcohol or drugs causes significant impairment or health problems.
Substance use disorder is also called addiction disorder.
Health insurance plans must cover substance use disorder and addiction treatment at the same level as physical care.
Substance use disorder affects millions of people in the U.S., according to the 2020 National Survey on Drug Use and Health report. The Affordable Care Act (ACA) lists substance use disorder services among its 10 essential health benefits. All ACA marketplace plans must provide those 10 benefits. Medicare, Medicaid, and many employer-sponsored health plans also will cover substance use disorder treatment.
What is the mental health parity rule?
Mental health care includes treatment for substance use disorder. U.S. law requires mental health parity, or coverage equal to physical care. This means insurers can’t offer fewer benefits or higher copays for services such as counseling or behavioral therapy.
Do you have to pay out of pocket for rehab and addiction treatment?
Medicare, Medicare Advantage, and private insurers often cover substance use disorder treatment. If you have insurance, there may be out-of-pocket costs depending on your care. Check with your insurance provider about rehab or addiction coverage. You should also ask about whether you will need a treatment plan.
Out-of-pocket expenses may vary depending on your level of care. For instance, Medicare Part A — which includes inpatient hospital care and residential treatment — requires a deductible ($1,484 in 2021) for each benefit period. There is also a daily coinsurance payment after the first 60 days of each benefit period.
Medicare Part B covers outpatient care. This includes psychiatric evaluation as well as group and individual psychotherapy. After paying your Part B deductible ($203 in 2021), you also will be responsible for 20% of the Medicare-approved charges. Medicare Part B also may provide partial hospitalization and telehealth services.
Medicare also covers alcohol misuse screening. This includes up to four counseling sessions annually without an out-of-pocket cost if a qualified provider accepts the assignment.
What type of coverage does the Affordable Care Act provide for substance use and addiction treatment?
The Affordable Care Act has helped many more people access substance use treatment. This is because the ACA requires plans to cover pre-existing substance use conditions. The ACA also doesn’t allow yearly or lifetime limits on coverage.
ACA marketplace plans cover treatment including:
Psychotherapy
Counseling
Medication-assisted treatment (also known as medication-assisted therapy, or MAT) — which is talk therapy combined with prescription drugs
How can I access rehab and addiction treatment if I’m uninsured?
There are many affordable treatment options for substance use disorders. Some alternative services include telehealth as well as digital tools such as recovery apps.
The Substance Abuse and Mental Health Services Administration (SAMHSA) maintains a searchable behavioral health treatment services locator. There, you can find state-run agencies that provide substance use disorder services. Some of those treatment centers may offer free and low-cost options.
Also, the U.S. Department of Veterans Affairs offers substance use treatment for veterans.
What is the 60-day rule in Medicare?
Original Medicare’s 60-day rule under Part A refers to the benefit period for an inpatient stay at a hospital or skilled nursing facility. If you enter an inpatient treatment facility, you will be required to pay:
A hospital deductible for each 60-day period
20% of the Medicare-approved charges
A daily coinsurance payment after the first 60 days of each benefit period
Each benefit period ends when you haven’t received any inpatient hospital care for 60 days in a row. It is possible to have two inpatient stays within a 60-day period. In this case, you would pay one deductible for that 60-day period.
What is the 3-day rule for Medicare?
The 3-day Medicare rule applies if you need care in a skilled-nursing facility after you leave the hospital. Even if you stay in a hospital overnight or for several days, you may be there “under observation” as an outpatient. That means you were not admitted as an inpatient. Your hospital status — whether inpatient or outpatient — will influence how Medicare pays for your hospital stay and will determine if Medicare pays for skilled-nursing facility care following hospital discharge.
You must be an inpatient for 3 days (not including the day you leave the hospital) for Medicare to pay for up to 20 days of skilled-nursing care at no cost to you. Since March 2020, the Centers for Medicare & Medicaid Services has waived the 3-day rule due to the COVID-19 pandemic and the related public health emergency declaration.
Does Medicare pay for rehab at home?
Original Medicare covers certain telehealth services for substance use disorders under Part B. That means that you can receive treatment at home by phone or a digital device.
How long does Medicaid pay for rehab and addiction treatment?
States run Medicaid, so coverage varies. Generally, state Medicaid programs cover services including:
Inpatient treatment
Outpatient treatment
Prescription drugs
Rehabilitation
The standard care for opioid use disorder is medication-assisted treatment, which combines medications with counseling. Most state Medicaid programs cover all three opioid use disorder medications.
How do most private and employer-sponsored insurance plans cover addiction treatment?
Many private and employer-sponsored insurance plans cover addiction treatment. Check with your health plan about what services are covered and to estimate your out-of-pocket costs. For example, employee plans managed by Cigna may include substance use benefits such as:
Inpatient treatment
Outpatient treatment
Referrals to behavior coaches and community support groups
The bottom line
Generally, if you have health insurance, you will have access to substance use disorder treatment services that are covered in full or in part. Contact your health plan to determine your level of coverage and your out-of-pocket costs. If you are uninsured, there are treatment alternatives as well as free and low-cost options that may help you address your substance use disorder.
Why trust our experts?
References
Centers for Medicare & Medicaid Services. (n.d.). CMS.
Centers for Medicare & Medicaid Services. (n.d.). The mental health parity and addiction equity act (MHPAEA).
Cigna. (n.d.). Substance use benefits.
HealthCare.gov. (n.d.). Mental health & substance abuse health coverage options. U.S. Centers for Medicare & Medicaid Services.
HealthCare.gov. (n.d.). What marketplace health insurance plans cover. U.S. Centers for Medicare & Medicaid Services.
Kaiser Family Foundation. (2019). Medicaid's role in addressing the opioid epidemic.
Medicaid.gov. (n.d.). Medicaid. U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Alcohol misuse screenings & counseling. U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Glossary. U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Inpatient or outpatient hospital status affects your costs. U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Medicare.gov. U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Mental health care (inpatient). U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Mental health care (outpatient). U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Mental health care (partial hospitalization). U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Skilled nursing facility (SNF) care. U.S. Centers for Medicare & Medicaid Services.
Medicare.gov. (n.d.). Telehealth. U.S. Centers for Medicare & Medicaid Services.
National Survey on Drug Use and Health. (2021). 2020 NSDUH annual national report. Substance Abuse and Mental Health Services Administration.
Orgera, K., et al. (2019). The opioid epidemic and Medicaid's role in facilitating access to treatment. Kaiser Family Foundation.
Substance Abuse and Mental Health Services Administration. (n.d.). Behavioral health treatment services locator.
Substance Abuse and Mental Health Services Administration. (2020). Mental health and substance use disorders.
Substance Abuse and Mental Health Services Administration. (2021). MAT medications, counseling, and related conditions.
U.S. Department of Veteran Affairs. (2020). Substance use treatment for veterans.
