Statistics from a John Hopkins Medicine report of 2019 reveal that 5.7 million adults over the age of 50 suffer from drug and substance use disorders (SUD).
According to the report, most of these elderly individuals came of age in an era of substance experimentation, hence their likelihood of abusing drugs and alcohol.
Although the numbers are appalling, it doesn’t get any better – substance abuse disorders are on the rise as more people encounter economic and social struggles. Drugs have become a convenient getaway.
This is reflected by the 3.9 million elderly Americans aged 65 years and above who battled a form of addiction as of 2022, according to the United States National Survey on Drug Use and Health (NDUH).
The escalating figures underscore a growing necessity for medical coverage in substance use treatment and rehabilitation programs, begging the question, “Does Medicare cover drug rehab?”
Well, read on to find out whether this health insurance cover, with over 65.7 million American beneficiaries, does include treatment for substance-related addictions.
What is Medicare and how does it work?
Medicare is a federal health insurance program eligible for senior adults aged 65 years and above and younger individuals with disabilities, end-stage renal disease, or amyotrophic lateral sclerosis (ALS).
The program helps millions of Americans manage their healthcare needs, including rehabilitation services for substance use disorders.
Essentially, Medicare enrollment is pretty straightforward. While most individuals are automatically enrolled once they hit 65, for those who are not, signing up three months prior to your 65th birthday is required.
Medicare coverage consists of four major provisions that are crucial when deciding the type of coverage and investment appropriate to a potential prospect.
Each of the four parts covers different services. Their breakdown is as follows:
Medicare Part A: In-patient care coverage
Medicare Part A is your general hospital insurance covering your inpatient care services. Among the care services provided in this package are:
- Hospital inpatient care, including but not limited to the hospital room, nursing care, and meals among other essential care services.
- Inpatient rehabilitation services
- Medication issued as part of treatment.
In case you’re wondering how long Medicare Part A provisions will cover you, the coverage period is up to 100 days an inpatient skilled nursing facility care and 90 days of inpatient rehab or hospital treatment.
The payment structure under skilled nursing facility care is as follows:
- Days 1 – 60: Medicare covers the full cost of care.
- Days 61 – 90: Patient copays a daily amount billed at $408.
- Days 91 – 150: Patient copays a daily amount billed at $816 with the option of 60 lifetime reserve days.
- Past 150 days: Patient takes care of all costs.
If the inpatient hospital/rehab stay exceeds 90 days, beneficiaries are entitled to an additional 60 lifetime reserve days beyond which they can use past the 90-day limit.
However, Medicare Part A covers the full cost of home healthcare services, including skilled nursing care, physical therapy, and speech-language therapy for as long as needed.
Medicare Part B: Outpatient and Preventive Services
Medicare B generally covers your medical insurance, including outpatient care packages such as doctor visits, therapy sessions, and preventive services.
This provision is particularly convenient for persons battling SUDs as it covers any relevant outpatient counseling or therapy required in their recovery plans.
For instance, if you need regular therapy sessions to maintain your sobriety, Medicare Part B will cover all visits, ensuring you have access to the support you may need.
Additionally, it covers preventive services such as screenings and vaccinations, catering to a patient’s overall well-being. Unlike hospital insurance, Medicare B provides coverage for as long as you remain in the program and keep paying your premiums.
However, Part B comes with a coinsurance fee besides the annual deductible amount paid by the beneficiary.
What is Medicare coinsurance?
This refers to the percentage of costs in a covered (or insured) healthcare service that you pay after paying your deductibles. The annual deductible amount for 2024 is $240.
Coinsurance varies depending on the type of service. Medicare Part B provisions require that all beneficiaries pay a 20% coinsurance of the Medicare-approved amount on outpatient and preventive services.
For instance, if the cost of your covered service is $100, you will cover 20% which amounts to $20 while Medicare will cover the remaining 80%, translating to $80. This, of course, is having paid the annual deductible amount.
Medicare Part C: Medicare Advantage Plans
Also known as the Medicare Advantage Plan, Medicare C is like a one-stop shop for your health insurance needs – it provides all the benefits of Part A (hospital insurance) and Part B (medical insurance) in a single convenient package.
If you’re wondering, “Does Medicare cover drug rehab?” the Medicare Advantage plans would be an excellent option as it includes inpatient and outpatient rehab services.
Essentially, these are plans offered by private insurance companies approved by Medicare. Without further ado, let’s dissect the plans down below.
Types of Medicare Advantage Plans
There are several types of Medicare Advantage plans, each catering to different needs and preferences for drug rehabilitation. Here are some you can choose from:
1. Healthcare Maintenance Organization (HMO) plans
HMOs require you to use a network of doctors and hospitals, where your primary care physician (PCP) would refer you to specialists within the network based on your needs.
Drug rehabilitation services under this umbrella present the following:
- Network-based care – your preferred rehabilitation center should be within the network to receive full coverage.
- Primary care physician requirement (PCP) – to see a specialist or enter a drug rehab program mandates a referral from your PCP.
- Cost efficiency – unlike Medicare Part A and Part B, HMOs have lower premiums and out-of-pocket costs making them convenient if your rehab facility is within the network.
2. Preferred Provider Organization (PPO) plans
Unlike HMO plans, PPOs allow more flexibility as you can select your preferred doctor or specialist within or outside the network without mandating any referrals.
However, additional costs may be incurred if the doctor or specialist of choice is outside the network.
PPOs accommodate drug rehab in the following ways:
- Flexible provider choice – you are allowed to choose your healthcare provider or rehab facility, with in-network providers coming at a less costly coverage.
- No referral needed – you can commence your treatment as promptly as needed without having to seek a referral from a PCP.
- Higher costs for out-of-network rehabilitation care.
3. Private fee-for-service (PFFS) plans
PFFS plans determine how much is paid to doctors, healthcare providers, and hospitals, and how much a beneficiary must pay upon access to care.
Below is a breakdown of how PFFS accommodates drug rehab services:
- Flexible provider choice – this plan allows you to see any healthcare provider that agrees to the plan’s payment options.
- No network restriction – your preferred rehab facility can be in- or out-of-network, provided they agree to the plan’s terms.
- Variable costs – due to the flexibility and ambiguity of the term, payment structures may vary.
4. Special needs plans (SNPs)
SNPs cater to individuals with special conditions such as specific healthcare needs including chronic illnesses or substance use disorders among others, or dual eligibility for Medicare and Medicaid.
Unlike other Medicare Advantage plans, SNP care includes an eligibility criteria of:
- Medicare Part A and Medicare Part B active insurance.
- Be a resident of the plan’s service area.
- Be eligible for one of the three SNPs;
- Dual Eligible SNP
- Chronic Condition SNP
- Institutional SNP
5. Medicare Medical Savings Account (MSA) plan
MSA plans combine a high-deductible health plan with a medical savings account in which you, the beneficiary, have ultimate control over the savings account.
The plan accommodates drug rehab in the following ways:
- High deductibles – MSA plan might expose you to significant out-of-pocket upfront costs for drug rehab.
- Savings account – Medicare deposits money in your savings account annually, which you can opt to cover your out-of-pocket expenses.
- Flexible spending – the funds in your savings account can cover any of your qualified medical expenses, including rehab services.
Medicare Part D: Prescription drug coverage
Medicare Part D covers prescription medication by paying for rehab treatment medications (both during and after rehab) or other ongoing prescriptions during the time of your coverage.
Part D coverage helps manage your health without a financial strain. Whether it’s withdrawal medication or mental health medication, Part D allows for accessibility and affordability.
This drug plan follows a payment structure that includes:
- Monthly premiums
- Annual deductible amount
- Initial coverage amount
- Coverage gap costs
- Enrollment penalty costs
Factors to consider when choosing a Medicare plan
Having covered the different parts of Medicare, it’s now time we look at the selection criteria for your suitable Medicare plan.
Costs
Let’s face it – healthcare costs can be unpredictable and sensitive, making it imperative to balance your financial capabilities with your healthcare needs.
Choosing a plan that balances your monthly premiums with deductibles and out-of-pocket expenses will ensure you get your healthcare coverage without breaking the bank.
Healthcare needs
As elaborated above, your medical necessity will determine the healthcare insurance coverage you select.
What is your current health status? What medications do you take? Are you under any treatment plans? Are they covered by your preferred plan? How often do you visit your specialist or primary care provider?
Answering these questions will help narrow down the suitable plan tailored to your situation.
Coverage
Different Medicare plans offer varying coverage levels for specific services.
Whether you’re under inpatient or outpatient rehab care, or require additional special care such as dental, vision, or hearing services, your plan should offer coverage for all your needs.
Flexibility and convenience
Consider the plan’s flexibility and convenience. Does the plan offer coverage outside your local area? Are you bound to referrals to access specialists and other relevant healthcare providers or have the freedom to choose your doctors or healthcare facilities?
Be keen to choose a plan that matches your comfort level.
Provider networks
It’s essential to check if your facilities, doctors, or pharmacies are in the plan’s network. This ensures you keep visiting the hospitals and doctors you trust. Your in-network pharmacy should also cushion you from outrageous expenses.
FAQs
What’s the difference between Medicare and Medicaid?
While Medicare involves high-end premiums, deductibles, and out-of-pocket expenses, Medicaid caters to low-income individuals with little to no premiums, out-of-pocket expenses, and lower deductible amounts. Medicaid also covers a broader population including the elderly, pregnant women, children, and persons with disabilities.
Is dual eligibility for Medicare and Medicaid possible?
Yes, individuals may qualify for both Medicare and Medicaid, drawing benefits from both programs. The dual coverage can significantly reduce the out-of-pocket expenses incurred under Medicare coverage.
Is addiction treatment covered under Medicare?
Absolutely, different Medicare plans cater to alcoholism and substance use disorder treatment plans.
What’s the difference between Medicare Advantage and Medigap plans?
Medigap, or Medicare Supplement Insurance, serves as a supplement to the Original Medicare plan (Part A – hospital insurance and Part B – medical insurance) by filling the ‘gaps’ or costs that may not be covered under the Medicare plans.