Does Medicare Cover Substance Abuse Treatment?

4 min read · 11 sections
Medicare is a federal health insurance program that help people over the age of 65 afford quality healthcare. Find out about eligibility and how Medicare can help make the cost of rehab more affordable.
What you will learn:
Learn how Medicare can be used to cover addiction treatment.
Medicare inpatient and outpatient treatment coverage.
How Medicare part D can cover medication.

Medicare can be used to cover the cost of drug and alcohol rehabilitation. But there are rules about the providers people can use with Medicare, and some types of addiction treatment are not covered by Medicare at all. It’s a good idea to contact Medicare directly to find more detailed information.

At American Addiction Centers, we work with Medicare-qualified patients to get the help they need for their substance use disorder (SUD) or alcohol use disorder (AUD), medical conditions defined by an uncontrollable use of alcohol or other substances despite negative consequences. If you or someone you love is battling a SUD or an AUD and qualifies for Medicare benefits, please reach out to one of our admissions navigators at

Of course, navigating Medicare can be confusing. The following information covers the basics of using Medicare to access drug treatment.

Does Medicare Cover Drug and Alcohol Rehab?

Medicare can cover treatment for AUD and SUD. Both original Medicare and Medicare Advantage plans cover various treatment options, including inpatient care, outpatient services, and prescription drugs, depending on the plan you choose.1

Is Medicare a PPO, HMO, or Something Else?

Medicare is a nationwide insurance plan offered by the federal government. It’s different from private insurance in that it doesn’t offer plans for families or couples. Individuals elect how they want to get their Medicare health coverage, which includes one of the following choices:2

Original Medicare: This health plan includes hospital insurance (Part A) and medical insurance (Part B). When individuals receive a covered service or treatment, Medicare pays part; the individual pays the rest, and individuals can see any doctor anywhere, provided they accept Medicare. Prescription coverage requires the addition of a Medicare drug plan (Part D).2

Medicare Advantage Plan: This Medicare-approved health plan comes from a private company chosen by the individual for their health and drug coverage. In most cases, doctors need to be in the plan’s network, and many of these plans cover prescriptions, vision, hearing, dental, even gym memberships, too. Under the Medicare Advantage Plan, individuals have PPO, HMO, Private Fee-for-Service Plans (PFFS), and Special Needs Plan (SNP) options.3

  • Medicare PPO plans have a network of health care providers, doctors, and hospitals. Individuals may receive covered services and treatments from out-of-network specialists, but that tends to come at a higher cost. Emergency and urgent care services are always covered.4
  • Medicare HMO plans require individuals to seek care from in-network health care providers and doctors except for emergency care, out-of-network urgent care, and out-of-area dialysis. Many HMO plans offer prescription drug coverage, but it’s important to confirm that it does because if the HMO plan you choose doesn’t offer prescription drug coverage, you can’t join a separate Medicare drug plan.5
  • Medicare PFFS plans are offered by private insurance companies that determine how much they will pay health care providers, doctors, and hospitals and how much you will pay for care.6
  • Medicare SNPs limit membership to individuals with specific diseases or conditions. To join, you need to have Medicate Part A (hospital insurance), Part B (medical insurance), live in an area the plan services, and have a severe condition like chronic alcohol or other substance dependence.7

Medicare Eligibility for Treatment

You may be eligible for Medicare if:2

  • You are age 65 or older.
  • You are younger than 65 and have a disability.
  • You are younger than 65 and have end-stage renal disease (permanent kidney failure that requires dialysis or a transplant) or ALS (also called Lou Gehrig’s disease).

For individuals with limited incomes and resources, Medicaid, a joint federal and state program, may be able to supplement Medicare coverage. It can help with Medicare premiums, nursing home care and personal care services.8

Medicare Parts & Breakdowns

The following are the breakdowns of Medicare parts:2

  • Part A helps with payment for inpatient treatment at a hospital or inpatient rehab center.
  • Part B helps with payment for outpatient treatment services through a clinic or a hospital outpatient center. It also covers alcohol misuse screenings and other behavioral health services.
  • Part C refers to Medicare Advantage Plans offered by private companies and approved by Medicare. These plans may include Parts A, B, and D, and may cover additional benefits as well.
  • Part D helps pay for certain drugs and medications that are medically necessary to treat substance use disorders.
  • Medicare supplemental insurance, also known as Medigap, is extra insurance you can purchase from a private company that helps pay your share of Original Medicare costs.

Medicare Part A Provisions for Inpatient Treatment

Medicare Part A is generally considered to be hospital insurance. Coverage includes:9

  • Hospital inpatient care.
  • Inpatient rehabilitation services.
  • Coordinated care from doctors, nurses, and other clinicians such as counselors.
  • Medication provided as part of the treatment.

How Long Will Medicare Pay for Rehab?

Under Part A, an individual can complete no more than 190 days total treatment from a specialty treatment facility. This is the lifetime limit. This includes care received at:10

  • Acute care hospitals.
  • Critical access hospitals.
  • Inpatient rehab centers.
  • Long-term care hospitals.
  • Inpatient care as part of a qualifying research study.
  • Mental health care.

An inpatient drug and alcohol rehabilitation program, combined with follow-up care and support, can help an individual struggling with addiction attain long-term recovery. Inpatient program services may include detox, individual therapy, group therapy, addiction education, relapse prevention, 12-step meetings, recreational activities, and aftercare planning.

Medicare Part B Provisions for Outpatient Treatment

Part B provides care for outpatient treatment of drug and alcohol rehabilitation, outpatient mental health counseling, alcohol misuse screenings, and intensive outpatient programs and services.9

Medicare Part B coverage includes:9

  • Outpatient hospital services.
  • Partial hospitalization programs, which provide intensive outpatient treatment.
  • Alcohol misuse screenings.
  • Mental health evaluations.
  • Individual and group therapy.
  • Certain medications.

Part B also covers an alcohol misuse assessment once per year for individuals who drink regularly but don’t meet the criteria for an AUD. If, through this assessment, the health care provider determines that the level of alcohol use is potentially problematic, the individual may be able to receive up to 4 face-to-face counseling sessions per year.11

SBIRT and Alcohol Risk Screening and Counseling

Screening, Brief Intervention, and Referral to Treatment (SBIRT) targets individuals at risk of experiencing alcohol- or other substance-related health issues prior to the need for more comprehensive substance abuse treatment. Medicare covers this type of intervention as a preventive measure when someone shows signs of substance abuse and the provider deems it medically necessary.9

The process includes:9

  • A screening to assess whether the person has risky substance use behaviors.
  • A brief intervention in which the provider has a conversation with the person about their substance abuse and offers feedback and advice.
  • Referral to services, therapy, or treatment for people whose screening suggests a need for further services.

Part D Coverage for Medication & MAT

Medicare Part D and most Medicare Advantage plans may cover medications used in treating SUDs.

Drugs that may be used to treat individuals with opioid or alcohol use disorder may include:12,13

Medicare drug programs might not cover all drugs, but they are required to cover antidepressant, anticonvulsant, and antipsychotic medications used during mental health treatments.14

Each specific drug plan under Part D has its own list of covered medications—also known as its formulary—so it’s best to make sure that the medications prescribed for you are on the specified formulary of your plan.15

Does Medicare Cover Mental Health Treatments?

When an individual first enrolls in Medicare, they receive a “Welcome to Medicare” preventative visit, which is basically a wellness checkup but also includes a review of the individual’s potential risk factors for depression and SUD.16

Besides yearly wellness visits, Medicare covers a separate visit for a more thorough review of an individual’s cognitive function, where the physician checks for conditions like dementia, depression, anxiety, and other changes to mental health.17

Under Medicare, a primary care physician may perform a depression screening on an individual each year and provide referrals for additional treatment.18

Mental health services and treatments that may be covered by Medicare include:19

  • Medically necessary diagnostic services to help determine functioning and interactions and identify problem areas.
  • Individual and group psychotherapy with physicians, clinical psychologists, clinical social workers, or other eligible providers.
  • Therapeutic activities, including occupational or recreational therapy.
  • Individual activity therapy that may be cognitive, physical, social, spiritual, or recreational.
  • Family counseling.
  • Patient education and training.
  • Drug therapy.
  • Chronic condition management for individuals with multiple chronic conditions that have both physical and behavioral health issues, such as depression.

Medicaid vs Medicare: The Difference

Medicaid is joint federal and state program and typically covers low-income Americans of all ages. Medicare, on the other hand, is a federal program and coverage is usually extended to those who are 65 years of age or older or who have certain disabilities. Eligibility requirements and coverage differs from Medicare to Medicaid. Some individuals may qualify for both.

Can I Have Dual Eligibility for Medicaid and Medicare?

In 2018, 12.2 million individuals were simultaneously enrolled in both Medicaid and Medicare.20A person may be enrolled in both Medicaid and Medicare at the same time if they meet the eligibility requirements for both. Someone who has both types of coverage is known as a dual-eligible beneficiary.21 Medicare typically pays for Medicare-covered services first and then Medicaid tends to cover services Medicare does not cover.


  1. Mental Health and Substance Use Disorder Services.
  2. Parts of Medicare.
  3. Medicare Advantage Plans.
  4. Preferred Provider Organization.
  5. Health Maintenance Organization.
  6. Private Fee-for-Service Plans.
  7. How Medicare Special Needs Plans Work.
  8. Medicaid.
  9. Centers for Medicare & Medicaid Services. (2016). Medicare Coverage of Substance Abuse Services.
  10. Your Medicare Coverage.
  11. Alcohol misuse screenings & counseling.
  12. Opioid Use Disorder Treatment Services.
  13. Centers for Medicare & Medicaid Services. Medicare National Coverage Determinations Manual: Chapter 1, Part 2 (Sections 90-160.26) Coverage Determinations.
  14. Centers for Medicare & Medicaid Services. Medicare & Your Mental Health Benefits.
  15. What Medicare Part D Drug Plans Cover.
  16. “Welcome to Medicare” Preventative Visit.
  17. Yearly Wellness Visits.
  18. Depression Screening.
  19. Centers for Medicare & Medicaid Services. (June 2021). Medicare Mental Health.
  20. Centers for Medicare & Medicaid Services. (2020). People Dually Eligible for Medicare and Medicaid.
  21. CMS Guidance: Reporting Expectations for Dual-Eligible Beneficiaries, Updated.

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