Medicaid Insurance Coverage For Drug And Alcohol Rehab

Updated on January 24, 2024

Medicaid covers the cost of many drug addiction treatment services. A person’s eligibility for Medicaid coverage will depend on factors such as age and income. Coverage for drug abuse services may also be impacted by what each state covers and whether a treatment center accepts Medicaid to pay for services.

Medicaid Rehab Centers For Addiction Treatment

Medicaid is a federal- and state-funded health insurance program available for low-income adults, children, pregnant women, elderly adults, and people with disabilities.

Many drug and alcohol rehab programs are covered by Medicaid depending on a few factors, such as state coverage, eligibility for Medicaid, and financial need.

Medicaid Insurance Coverage for Drug And Alcohol Rehab

Medicaid is a health insurance program funded by the federal government and state governments. In addition to covering physical health services, it also provides mental health coverage, including drug and alcohol treatment.

All state Medicaid plans are required to cover certain services, particularly those that are deemed medically necessary.

However, Medicaid plans vary by state and may not cover all treatment programs. Additionally, not all rehab centers will accept Medicaid as a form of payment.

What Addiction Treatment Services Are Covered By Medicaid Insurance Plans?

Depending on the state, there are a few primary addiction treatment options covered by Medicaid.

According to, almost 12% of beneficiaries over age 18 have a substance use disorder (SUD). Medicaid accounted for 21% of national spending for treating SUDs in 2009, the last year data was provided.

Medicaid often covers the following evidence-based drug abuse and mental health treatment services:

Medical Detox

In many cases, Medicaid covers medical detox, a supervised program that allows a person to safely purge substances from their bodies. This process usually lasts from five to 10 days.

Detoxification can be done in a medical setting, at home, or by quitting “cold turkey.” However, quitting certain substances abruptly is not recommended, as detoxing without medical supervision can be very dangerous.

The safest option is to participate in medical detox, where trained staff can administer medications and monitor withdrawal symptoms.

Outpatient Rehab Programs

Many outpatient treatment programs are also covered by Medicaid. Outpatient care is a part-time option in which a person attends a treatment center during the day and returns home in the evenings.

Outpatient levels of care include:

Some inpatient treatment programs are covered by Medicaid. These programs are similar to residential treatment programs, but they are more intensive and short-term, generally lasting for 30, 60, or 90 days.

At an inpatient treatment facility, a person will live on the premises and participate in various addiction treatment options, such as group therapy, family sessions, and vocational training.

Medication-Assisted Treatment (MAT)

MAT combines medication with behavioral therapies to provide a whole-patient approach to addiction recovery.

Medications often used in MAT programs include:

  • buprenorphine (Suboxone, Zubsolv, Subutex) or methadone for opioid dependence
  • disulfiram or naltrexone for alcohol dependence

Factors That Affect Medicaid Coverage For Addiction Treatment

While many states offer Medicaid coverage for substance abuse treatment, there are several factors that may impact a person’s chances of getting into a treatment program using Medicaid.

Prior Authorization

Some people may need to obtain prior authorization (PA) for addiction coverage. Prior authorization requires approval from Medicaid before a person can start a new medication or program.

Each state has different PA requirements for Medicaid coverage. Many states have a PA search tool so people can find out what requirements are needed.

Copays, Premiums, And Deductibles

Unlike private health insurance, Medicaid coverage usually does not require a copay or premium. However, some services require cost-sharing with copays, premiums, deductibles, or other charges.

Depending on your plan and state’s coverage, you may be required to pay part of the substance abuse treatment program or prescription medication cost out of pocket.

These charges are limited, but states can charge higher fees for individuals with higher incomes. Children and pregnant women are exempt from these charges.

Understand That There May Be Long Waitlists

When a person is looking to enroll in a program using Medicaid, they may encounter long waitlists.

This can be due to treatment facilities with limited capacity or a small number of Medicaid members allowed into the program.

Some waitlists can be just a day or two, while others can last weeks or months depending on the program.

Finding A Medicaid Rehab Center

There are usually only a few drug and alcohol treatment centers in each state that will accept Medicaid as a form of payment.

It may be challenging to locate a quality treatment facility that both accepts Medicaid and offers the services you need.

Meeting Medicaid Eligibility Requirements

Prior to Medicaid’s expansion in 2010, a person was required to be in at least one low-income eligible group.

Those eligible for Medicaid included:

  • children and adolescents ages 18 and younger
  • pregnant women
  • parents
  • seniors 65 or older
  • individuals with disabilities and their family members

With expansion, Medicaid in most states is available for anyone with a low income. However, residents of some states must still meet other eligibility requirements.

Medicaid Income Eligibility Requirements

To be eligible for Medicaid, a person must fall into the approved income bracket for each state.

Each state has different income eligibility requirements, and this will affect a person’s ability to use Medicaid to cover behavioral health services such as drug and alcohol addiction treatment.

Modified Adjusted Gross Income (MAGI)

The MAGI is what’s used to determine a person’s financial eligibility for Medicaid services.

MAGI considers taxable income and tax filing relationships. It’s very similar to a person’s adjusted taxable income.

MAGI considers the following information from each tax-filing individual in a household:

  • adjusted gross income (AGI) on a federal tax return
  • excluded foreign income
  • nontaxable Social Security benefits
  • tax-exempt interest

Supplemental Security Income (SSI) is not counted toward MAGI.

The following groups are exempt from MAGI-based income counting rules:

  • a person who is blind
  • a person with a disability
  • a person who is 65 or older

What Is The Income Cutoff For Medicaid Coverage?

The gross income cutoff varies by state. Most cutoffs hover around $20,000 in annual income for a single-person household, and about $35,000 for a three-person household.

Making An Appeal

If you’ve been denied Medicaid coverage for behavioral health services, you can make an appeal and try again.

With an appeal, you can request a fair hearing if you believe the denial was wrong.

Medicaid Plans By State

Medicaid is a state-run program with funding and regulations from the federal government. Some states have unique names for their Medicaid programs.

The following list provides the names of each state’s Medicaid program:

Medicaid Insurance Coverage For Drug And Alcohol Rehab FAQs

Here, you’ll find answers to some of the top asked questions about Medicaid coverage of drug and alcohol rehab.

Medicaid does cover the cost of services provided by a drug rehab center. However, not all recovery centers accept Medicaid, so it may take longer to find a treatment program that will accept it.

Medicaid covers most mental health services, including therapy, medication management, peer supports, and treatment for substance use disorders.

However, each state decides which services to cover. Your state may not include all of the above services.

Your state’s Department of Health and Human Services can provide more information.

There are several prescription medications often used in the treatment of drug and alcohol addiction.

Depending on the state, Medicaid usually covers:

  • Suboxone
  • Subutex
  • Zubsolv
  • buprenorphine (generic)
  • buprenorphine/naloxone (generic)
  • methadone

Find Drug Addiction Treatment Centers

Addiction can impact people of all ages, abilities, and income statuses. However, it is a treatable condition.

If you or a loved one need addiction services, contact Detox Rehabs today to learn more.

For 24/7 Treatment Help Call:
(888) 859-4403

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