Medicaid can be used to pay for a drug treatment program if the center accepts Medicaid as a form of payment.

What Is Medicaid?

A federal and state health insurance program, Medicaid offers coverage to individuals with limited resources who may not otherwise qualify for care. Each state governs Medicaid a little differently, and coverage and benefits can vary from state to state.

In 2016, the National Survey on Drug Use and Health (NSDUH) reports that over 20 million people in the United States struggled with addiction to drugs and/or alcohol. Addiction is considered a public health concern, and around one in every 13 Americans would benefit from specialized treatment. Substance abuse falls into the category called behavioral health, which is among the 10 essential health benefits under the Affordable Care Act (ACA). This means that treatment must be covered by Medicaid plans sold on the federal marketplace. This is called parity, and it means that mental health and substance abuse must be covered in the same way as other diseases and illnesses that are covered by Medicaid and health insurance.

Many facilities receive federal or state grants or funding, and public drug addiction treatment programs often accept Medicaid as payment for services. SAMHSA’s Behavioral Health Treatment Services Locator can help you find locations that accept Medicaid for addiction treatment.

Medicaid Eligibility

Medicaid is federal and state-based health care coverage that traditionally has been an option for American children, adults with dependent children, pregnant women, and the elderly. The ACA expanded Medicaid coverage to include more low-income individuals, adults who fall below the federal poverty line (FPL) and have limited resources.

Medicaid Varies Somewhat From State To State in Terms of Eligibility. In General, A Person Must:

  • Be a U.S. citizen
  • Be a resident of the state where coverage is being sought
  • Meet financial eligibility status, which is commonly 138 percent below the FPL

In addition, a person may qualify if they have a documented disability, such as blindness.To determine Medicaid coverage and eligibility, you will need to go to your specific state’s Medicaid website and apply. When completing an application on the Health Insurance Marketplace, you can find out which programs you are eligible for and pick one that suits your needs and circumstances.

Substance abuse treatment services must be provided under all plans sold through the marketplace.

Determining Coverage

Coverage for specific services is dependent on the plan itself, and not all Medicaid plans are the same.

The Following Addiction Treatment Services May Be Covered By Medicaid:

  • Detox
  • Inpatient rehab
  • Outpatient services
  • Behavioral therapies and counseling
  • Medication management
  • Treatment for co-occurring medical and mental health services
  • Recovery support

Every state has its own model, and plans within the state can vary as well. The best way to know what your Medicaid insurance will cover is to talk to a representative about your specific plan before seeking treatment services.

Drug treatment centers have trained staff members on hand who can answer questions about payments and health insurance coverage, including Medicaid. They can help you navigate how to pay for services as well.

Using Medicaid for Drug Rehab

Medicaid is run through individual state entities. The Centers for Medicare and Medicaid Services (CMS) reports that many states are using a managed care model for Medicaid. Services are often run through local or regional providers directly.

Most states will have a Medicaid office or a department of public health care services that will explain the details on public health care and treatment providers that accept Medicaid. Mental health and substance abuse treatment services must be provided equally to other surgical or medical services due to parity laws in states that have expanded Medicaid services.

To use Medicaid to pay for treatment services, you may need to obtain a referral from your primary care provider first. Services must often be deemed “medically necessary” and may require pre-approval or prior authorization before treatment is covered. 

Those using Medicaid to pay for drug treatment may need to use outpatient programs first before an inpatient stay will be allowed as a covered expense. If a relapse occurs after an outpatient program, an inpatient program may be covered.

There are generally no fees or out-of-pocket costs for Medicaid services, but not all programs and options may be covered. While Medicaid is used as a payment method for addiction treatment services, there may still be additional costs that individuals will be responsible for.

Priority Treatment Under Medicaid

Drug treatment services that accept Medicaid are often funded by the state and considered public treatment providers. As such, there may be limited space and high demand for these services.

Priority Treatment Is Often Given to Those Who Meet One or More of the Following Criteria:

  • Pregnant women
  • Parents of dependent children who are in immediate danger
  • Individuals in crisis
  • Injection drug users
  • Individuals who also struggle with significant mental health concerns
  • When treatment is mandated through legal or criminal avenues

Each state handles public health treatment services differently. While providers that accept Medicaid are generally open to anyone who needs help, these services are often allocated in priority order. There is often a waiting list for public drug treatment services.

Medicaid is treated like any other insurance by providers that accept it. Medicaid and insurance coverage may put limits on the length of time in treatment or on specific services or medications, but parity laws ensure that these limitations are similar to those associated with other medical issues.

The National Institute on Drug Abuse (NIDA) recommends that no matter what form addiction treatment takes, the program should be at least 90 days to best sustain recovery and minimize relapse.

Treatments That Aren’t Covered

There are many additional and optional treatment methods that may not be covered by Medicaid or any insurance plan. Things like chiropractic care, massage therapy, spa treatments, nutrition therapy, fitness programs, and luxury and/or private accommodations may be components of a comprehensive drug addiction treatment program that are not be covered by insurance or Medicaid.

A representative at a drug treatment center can walk you through what services may be covered under Medicaid. If there are alternative or supplementary therapies that will enhance your recovery, they can discuss options for paying for them.

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