Medicaid is a federal- and state-funded program that provides healthcare coverage to people who meet its income and other eligibility requirements. Medicaid provides coverage for addiction treatment, but the amount of coverage depends on where you live and your coverage qualifications. This article discusses the types of Medicaid coverage and how they can help you get the care you need for substance use disorder (SUD). We also give you information about how to access your Medicaid benefits when you’re ready to take the first step on your path toward recovery.

What is Medicaid?

Medicaid is a federal- and state-funded program that provides healthcare coverage to people who meet its income and other eligibility requirements. Medicaid makes drug and alcohol rehab treatment more affordable by offering insurance to low-income people based on specific eligibility requirements. Medicaid substance abuse treatment coverage includes long-term inpatient care, prescription drugs, and outpatient services.1

In most cases, you must qualify for Medicaid based on Modified Adjusted Gross Income (MAGI).2 This method determines Medicaid eligibility for children, pregnant women, and adults. If you are over age 65, you are exempt from MAGI rules.

If you have Medicaid and Medicare, Medicare pays first, and Medicaid pays second if the services are not covered.3 Different types of Medicaid also cover care for different people. The Medicaid Expansion CHIP, for example, covers healthcare for children.

Who is Eligible for Medicaid?

The following items may be used to determine eligibility for Medicaid:3

  • Financial eligibility: You must meet the financial requirements which may be determined by your Modified Adjusted Gross Income (MAGI). Some individuals are exempt like those eligible based on disability or age (65 and older).
  • Citizenship and residency: Medicaid beneficiaries must generally be residents of the state in which they are receiving benefits and must either be a citizen of the United States or be a qualified non-citizen.

Does Medicaid Cover Addiction Treatment?

Yes, Medicaid typically pays at least some part of drug and alcohol rehab treatment. State insurance typically covers rehab for most individuals. While Medicaid often covers substance use disorder (SUD) treatment, Medicaid addiction treatment coverage is also highly dependent on individual state policies. Additionally, Medicaid rehab coverage may vary depending on your insurance plan. The costs associated with SUD treatment may vary between Medicaid health insurance members by state.

The amount of coverage you have can vary widely based on your state of residence, whether the facility is in-network or out-of-network, the length of your stay, and your insurance plan level. The cost of drug and alcohol rehab treatment will vary from person to person and will also depend on the rehab center, the type of program attended, and specific services received.

Medicaid addiction treatment coverage is now accepted at many substance abuse treatment facilities across the country. Again, Medicaid may or may not pay your full rehab treatment costs, but it can make treatment more affordable at rehab facilities that accept Medicaid.4 Coverage may include:

Typically, you will have no co-payment for drug and alcohol treatment. However, some states do require a co-pay. There will be a maximum co-pay that cannot be exceeded.

Does Medicaid Cover Addiction Counseling and Therapy?

Yes, Medicaid typically provides coverage for some, if not all, of addiction counseling and therapy. Medicaid is the largest payer for mental health services in the U.S. and plays a significant role in substance use disorder (SUD) services reimbursement.4 Congress has enacted several laws to increase the accessibility and affordability of mental health and SUD services. One of the most recent laws is the Mental Health Parity and Addiction Equity Act (MHPAEA), which requires health insurance providers to offer the same level of benefits for mental health and SUD services that they do for other types of medical care.5

Rehab Centers That Accept Medicaid

In most cases, you will need to seek drug and alcohol treatment at a rehab facility that is in-network with Medicaid to receive your full benefits. Even if you choose a treatment center that is in-network, you may still be responsible for some of the treatment costs.

If you choose a facility that is out-of-network, you may be responsible for all the costs of your substance abuse treatment. You may be able to discuss financing options such as a payment plan or scholarships offered by the facility.

Types of Substance Use Treatment That Medicaid Covers

With most Medicaid plans covering at least some of the costs of rehab treatment for drug and alcohol addiction, the types of treatment and the rehab process can vary in intensity and frequency. Types of treatment may include:7, 8

Detox Programs Near Me

In some cases, you may need assistance when detoxing from drugs and alcohol, which can potentially be uncomfortable or even life-threatening. Medical detox helps you safely withdraw from drugs and alcohol, as you’ll receive around-the-clock medical supervision. You may also be given medications to help minimize withdrawal symptoms.

Residential Care or Inpatient Treatment Centers

Inpatient/residential treatment centers provide drug and alcohol rehab while you live onsite at the facility. Most inpatient programs last anywhere from 15–90 days, depending on the program you’re in and your individual needs. Medicaid may cover residential treatment depending on the length of the treatment program.

Partial Hospitalization Programs (PHP)

Partial hospitalization programs give you the opportunity to live at home while attending treatment during the day.

Intensive Outpatient Program (IOP)

Intensive outpatient programs involve attending treatment programs a few evenings a week. In an intensive outpatient program, you can live at home and even go to work during the day.

Outpatient Treatment Facilities

Individuals who have completed inpatient rehab treatment often attend outpatient treatment for ongoing support on their journey to sobriety. You live at home and spend 10–12 hours a week at the treatment facility for therapy and support.

Many people wonder if inpatient rehab vs. outpatient rehab or another type of treatment is best for them. When you decide to get treatment for drug or alcohol addiction, you can work with your healthcare provider to determine the right continuum of care based on your needs and preferences.

How to Check Your Medicaid Rehab Coverage

Before choosing the right addiction treatment center for you, check your Medicaid policy benefits to determine which costs will be covered by your insurance company and which will be out-of-pocket for you. Call the number on the back of your health insurance card or log in to your account on Medicaid’s website to learn more about what your specific policy plan covers.

Knowing exactly what your Medicaid plan covers can give you peace of mind while you or your loved one is in drug and alcohol rehab. You can do the work of getting and staying sober without worrying about unexpected costs or financial struggles.




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Rehabs.com strives to provide you with the most updated information on each carriers’ addiction insurance coverage, but policy changes and errors do occur. Please check with your insurance carrier directly to confirm coverage levels.