Will Insurance Cover Addiction-caused Hospitalization?

Will Insurance Cover Addiction-caused Hospitalization?

With the right plan, insurance may cover a hospital stay caused by addiction

Your health insurance may cover substance abuse treatment services. The Mental Health Parity and Addiction Equity Act ensures that health plan features like co-pays, deductibles and visit limits are generally not more restrictive for mental health and substance abuse disorder benefits than they are for medical and surgical benefits. The Affordable Care Act builds on the Mental Health Parity and Addiction Equity Act and requires coverage of mental health and substance use disorder services as one of ten essential health benefits categories. Under the essential health benefits rule, individual and small group health plans are required to comply with these parity regulations.

A Dual Diagnosis Is Oftentimes Involved

It is possible you need to find treatment for both depression and addiction. This is very common. It’s called “comorbidity,” “co-occurrence” or “Dual Diagnosis” when you have more than one health problem at the same time. It is important that you discuss all of your symptoms and behaviors with your doctor. Sometimes health care providers do not communicate with each other as well as they should, so you can be your own best advocate and make sure all of your health providers know about all of the health issues that concern you. People who have co-occurring issues should be treated for all of them at the same time or reoccurrence is likely.1

All of the commonly sold plans today cover mental health and substance abuse services as essential health benefits – the same way they cover any other health condition.

All plans must cover:

  • Behavioral health treatment, such as psychotherapy and counseling
  • Mental and behavioral health inpatient services
  • Substance use disorder (commonly known as substance abuse) treatment

Your specific behavioral health benefits will depend on your state and the health plan you choose.

Pre-existing Mental Health Conditions Are Covered with Same Benefit Limits

Marketplace plans can’t deny you coverage or charge you more just because you have a pre-existing condition, including mental health and substance use disorder conditions. Coverage for treatment of all pre-existing conditions begins the day your coverage starts. Most commonly sold plans can’t put yearly or lifetime dollar limits on coverage of any essential health benefit, including mental health and substance use disorder services. Limits applied to mental health and substance abuse services can’t be more restrictive than limits applied to medical and surgical services.2

Will Medicare Cover Addiction-related Medical Needs?

While Medicare covers a broad array of treatment services for those with mental illness and substance abuse disorders, special rules limit coverage and reimbursement. Medicare’s coverage of services for mental health, behavioral health and substance abuse disorders is not as extensive as its coverage for other services.

Medicare will pay for treatment of alcoholism and substance use disorders in both inpatient and outpatient settings. Medicare Part A pays for inpatient substance abuse treatment; individuals will pay the same co-pays as for any other type of inpatient hospitalization. Likewise, Medicare Part B will pay for outpatient substance abuse treatment services from a clinic or hospital outpatient department.

Covered items and services for the treatment of alcoholism and substance use disorders include:

  • Psychotherapy
  • Patient education regarding diagnosis and treatment
  • Post-hospitalization follow-up
  • Out-patient prescription drugs though Medicare Part D
  • Inpatient prescription drugs including Methadone
  • Structured Assessment and Brief Intervention (SBIRT)

Hospitalization – Medicare covers care in specialized psychiatric hospitals that only treat mental illness when inpatient care is needed for active psychiatric treatment. As with care in a general hospital, Medicare pays for necessary inpatient hospitalization for up to 90 days per benefit period. Medicare beneficiaries who need to be in a hospital for more than 90 days are entitled to 60 lifetime reserve days, which can be used only once in a lifetime.

Unlike care in a general hospital, care in a specialized psychiatric hospital is limited to a total of 190 days in a lifetime. Once this maximum has been reached, Medicare coverage of psychiatric hospitalization is exhausted and cannot be renewed. If they require lengthy hospitalizations for treatment of physical ailments, no such limitation would be placed on the number of covered hospitalizations to which they would be entitled.

Partial HospitalizationPartial hospitalization programs offer intensive psychiatric treatment on an outpatient basis to psychiatric patients. For these patients, there is an expectation that their psychiatric condition and level of functioning will improve and thus prevent relapse and inpatient hospitalization. Partial hospitalization programs are located in hospital outpatient departments or community mental health centers. These programs include diagnostic services, individual and group therapy, therapeutic activities, family counseling regarding the patient’s condition, patient education, and the services of social workers, psychiatric nurses and occupational therapists. Partial hospitalization services must be provided under the direct supervision of a physician following an individualized treatment plan.

Outpatient Services – Medicare also covers necessary outpatient mental health services including individual and group therapy, therapeutic activity programs, family counseling and patient education services, drugs that a patient generally cannot self-administer and diagnostic tests, including laboratory testing. The Medicare statute itself places no limits on clinician coverage as long as the services provided are medically necessary.3

For a positive, supportive, full-service treatment facility, find out why 11 federally funded research studies substantiate our claim to have a superior treatment approach — whether outpatient or inpatient, short-term or long-term care. In fact, those studies indicate that our clients are twice – yes, twice – as likely to experience continued sobriety after one year post-treatment compared to the national average of traditional recovery programs. Friendly, knowledgeable coordinators stand ready 24/7 to answer your toll-free call. Call us with confidence. We prove our worth, one individual at a time.


1 “What to Do If You Have a Problem with Drugs: For Adults”, National Institute on Drug Abuse, http://www.drugabuse.gov/related-topics/treatment/what-to-do-if-you-have-problem-drugs-adults , (Revised last on October, 2015)

2 “Mental Health and Substance Abuse Coverage”, HealthCare.gov, https://www.healthcare.gov/coverage/mental-health-substance-abuse-coverage/

3 “Medicare Coverage of Mental Health and Substance Abuse Services”, Center for Medicare Advocacy, http://www.medicareadvocacy.org/medicare-info/medicare-coverage-of-mental-health-services/