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Medicare Addiction Coverage

Retirees can get addiction treatment benefits through Medicare if referred by their physician to either inpatient or outpatient facilities. It is on the recommendation of the physician that benefits would be payable, up to 65 percent of all costs incurred. Inpatient is considered hospitalization and is taken out of the lifetime benefit available to the member if used for treatment. This does not cover a residential, non-hospital setting for treatment, which is the bulk of the programs available to most addicts for treatment.

The exception to that rule is if done in a psychiatric hospital setting. Then the benefit is taken out of a 190-day lifetime benefit available to Medicare members. Expenses for hospital services are the same, whether for treatment or medical hospitalization. Each member needs to be clear on when their Part A Medicare benefits are used and where supplemental insurance covers secondary expenses, as these can become very costly.

Outpatient services are covered by Medicare Part B, at the same rate of 65 percent. Supplemental insurance coverage will usually cover the balance of costs, since they are substantially less than hospitalization or inpatient, residential services. If the member does not have supplemental insurance, the 35 percent remaining would have to be paid out of pocket.

Services covered for outpatient treatment include, but may not be limited to:

  • psychotherapy
  • educational information (such as psychotherapeutic groups) that include diagnosis and treatment
  • follow-up sessions (such as aftercare if discharged from an inpatient setting) or additional sessions for
  • additional care post-treatment
  • prescription medications administered during inpatient care (hospitalization) or injected in doctors’ office (this may include methadone if provided as inpatient, but not when outpatient. Methadone is not covered for treatment of substance abuse, but can be prescribed for pain or other appropriate medical conditions.)
  • prescription drugs as an outpatient are covered under Part D (medically necessary drugs must be covered to treat drug abuse through formulary or exception process)

If you would like assistance locating a specific drug and alcohol rehab in your area, contact The Good Drugs Guide at the phone number listed above today.

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updated June 12, 2013

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