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Paying for Rehab

Government Programs

Government programs like Medicaid and Medicare cover some substance abuse treatments due to the Affordable Care Act.

Government Programs: What Is Medicaid And Medicare?

Medicaid and Medicare are government programs designed to provide care for the elderly and disabled, as well as low-income individuals in need. These programs represent two of the most common methods of paying for drug or alcohol detox treatments. In fact, Medicaid pays for a fourth of all Buprenorphine prescriptions (an addiction treatment medication). In some states where government health insurance has expanded and addiction treatment numbers are higher, like Ohio, Medicaid pays for almost half of all treatment prescriptions.

Under the 2010 Affordable Care Act (ACA), also known as “Obamacare,” insurance providers (including Medicaid) must cover all basic aspects of drug and alcohol dependency recovery. While Medicaid covers substance abuse treatment, not all facilities accept Medicaid (or Medicare) as a form of payment.

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Government Programs: The Affordable Care Act (ACA)

On March 23, 2010, President Obama signed the Affordable Care Act (commonly referred to as Obamacare) into law. The three main goals of the legislation were:

  1. Making health insurance more affordable for more Americans through tax credits
  2. Expand Medicaid coverage to all adults with an income below 138% of the federal poverty level
  3. Lower health costs through new technology and methods

Many medical professionals praise the increase in availability of substance abuse treatment afforded by the ACA. Now considered an “essential health benefit,” insurers must cover services for the full spectrum of substance use disorders (including prevention and early-stage abuse).

While rollbacks under the Trump administration have altered parts of the ACA, many core elements haven’t changed. In December 2017, Congress decommissioned the individual mandate, which required most to either enroll in health insurance or pay a penalty on their taxes. The open enrollment period for 2018 was shortened and funding for enrollment-assistance advertising was decreased. Still, some states have introduced their own healthcare laws in an effort to maintain stability should further cuts to the ACA be made.

Government Programs: Medicaid

Medicaid provides free or low-cost health insurance to individuals based on income and family size. Moreover, it is available in every state to pregnant women, the elderly, and individuals with disabilities.

After the expansion of Medicaid under the ACA, all adults with an income below 138% of the federal poverty level (FPL) are eligible for coverage (some states have set a separate income limit). The table below indicates the 2018 maximum household annual income used to determine eligibility for Medicaid (excluding states that use their own FPL limit).

Family Size Max Household Income
1 $12,140
2 $16,460
3 $20,780
4 $25,100

For those who don’t qualify for Medicaid, they may still be eligible for a premium tax credit with a Marketplace insurance plan. Those with an expected yearly income between 100% and 400% of the federal poverty level qualify.

What Addiction Treatment Does Medicaid Cover?

With the passage of the ACA, insurers are now required to provide addiction treatment and mental health care as part of primary care. Additional coverage now includes prevention and treatment therapies like:

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Medicare and Substance Abuse Treatment

Anyone aged 65 or older, individuals with disabilities, and those with End Stage Renal Disease (complete kidney failure) qualify for Medicare health coverage. Known as Original Medicare or Traditional Medicare, the program was created in 1965 and provides healthcare by paying directly for each service on a fee-for-service basis. Original Medicare includes Parts A and B, is accepted by most all care providers, and is the most popular plan (the other is Medicare Advantage Plan or Part C).

Medicare is split into 4 parts:

Four Parts of Medicare
Part A Also known as Hospital Insurance. Premium-free Part A is available for those who have paid Medicare taxes for at least 10 years and are 65 or older. Part A covers inpatient care and hospitalization if needed for substance abuse treatment. Cost-sharing rules apply depending on the plan. Medications used to treat addiction (like Methadone) are usually covered under Part A when administered in a hospital.
Part B Also known as Medical Insurance. Everyone pays a premium on Part B. Part B covers outpatient addiction care at facilities like clinics and hospital outpatient departments. This care can include rehab therapy or prescriptions administered by the outpatient center. Doctors’ services like lab tests, x-rays, medical equipment, preventative care, and some home health care and ambulance services are also covered.
Part C Also known as Medicare Advantage or Medicare Private Health Plan. This plan provides Medicare benefits from a private insurer subsidized by the government. By law, these plans must provide at least the same benefits as Original Medicare, but insurers can make their own coverage policies.
Part D Also known as Prescription Drug Coverage. Part D is available to those with Parts A and B, or through Medicare Advantage Plans that offer prescription coverage. The premium for Part D is incurred on top of the Part B premium, paid monthly. Substance abuse treatment medications must be medically-necessary to qualify for coverage. For instance, Methadone is not covered for addiction treatment, but is covered for conditions like pain.

Some may qualify for both Medicaid and Medicare (particularly individuals who are disabled or over 65). These people may choose to apply their benefits to individual treatment therapies or substance abuse programs.

If you already have Medicaid or Medicare, you can find a drug or alcohol recovery facility by contacting the Substance Abuse and Mental Health Services Administration (SAMHSA) or reaching out to a dedicated addiction treatment provider now.

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