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Does Medicaid Cover Drug and Alcohol Rehab?

Yes, Medicaid may cover rehab at select American Addiction Centers' facilities. Call us to learn more.
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Overview & Eligibility

Medicaid can be an extremely useful method for paying for drug and alcohol treatment, including medication-assisted treatment (MAT), inpatient rehab, outpatient rehab, and more.

To learn more about rehabs that take Medicaid and how Medicaid may help you or a loved one pay for inpatient or outpatient drug and alcohol treatment, continue reading. American Addiction Centers (AAC) is here to help you find treatment, attend treatment, and improve your overall health and wellness.

What is Medicaid?

Medicaid and the Children’s Health Insurance Program (CHIP) provide affordable health coverage to eligible low-income adults, children, and people with disabilities. They are funded by both state and federal governments and overseen by individual states under federal guidelines.1 The largest payer for mental health services in the United States, Medicaid also maintains an ever-growing role in the reimbursement of services for substance use disorders.2

In all 50 states and the District of Columbia, more than 84 million Americans were enrolled in Medicaid, as of October 2022.1 If you include CHIP, that number jumps to more than 91 million Americans enrolled in either Medicaid or CHIP as of October 2022.1

Medicaid is a program that is essential for low-income families and other eligible populations, as it allows for a continuum of care for treatment and recovery that can connect people with social services to meet their particular needs.3

Statistics on Medicaid in the U.S.

  • The Affordable Care Act of 2010 (ACA) allows states to expand Medicaid coverage to nearly all low-income adults under the age of 65.6
  • Almost 12% of Medicaid recipients over the age of 18 have a substance use disorder.2
  • Every day, over 6,500 people seek emergency services for substance-related issues.2
  • In 2020, Medicaid was projected to be the largest payer of behavioral health services—including services for substance use disorders—in the United States, accounting for 30% of the total spent.7
  • In 2020, 71% of drug and alcohol treatment facilities in the United States accepted Medicaid.8

Who is Eligible for Medicaid?

Low-income families, qualified pregnant women and children, and people who receive Supplemental Security Income (SSI) are examples of mandatory eligibility groups.17 Other communities, like children in foster care, who are not otherwise eligible or people who receive community-based services, may also qualify, depending on the state.17

Determinants of eligibility include but are not limited to:17

  • Financial need: within income guidelines for individuals and families.
  • Medically necessary: includes people whose income is too high to meet financial criteria but have qualifying disabilities.
  • Age: children or people over 65.

Medicaid Income Brackets

While individual states have a wide range of eligibility requirements for Medicaid, they are directed by federal guidelines. Eligibility is primarily influenced by federal poverty levels in each state.18

Below is a table of federal poverty guidelines for states in the contiguous United States and the District of Columbia as of 2022:18

Persons in Family or Household Poverty Guideline

  • $13,590 for individuals.
  • $18,310 for a family of 2.
  • $23,030 for a family of 3.
  • $27,750 for a family of 4.
  • $32,470 for a family of 5.
  • $37,190 for a family of 6.

In states that expanded Medicaid benefits as a result of the ACA, people who earn 138% above poverty level can qualify for Medicaid. Income limits are much lower in states that have not expanded Medicaid benefits since the ACA.18


Does Medicaid Cover Alcohol Rehab or Treatment for Drug Use?

Yes, Medicaid does often cover alcohol rehab and treatment for drug use or misuse. While individual plans and benefits vary by provider and state, Medicaid plays a major role of financing substance use disorder treatment in the United States.

The Mental Health Parity and Addiction Equity Act was established to ensure that Americans with mental health issues and substance use disorders could receive the care they need by prohibiting discriminatory practices that could limit insurance coverage for behavioral health treatment.5 Federal guidelines now require Medicaid to comply with parity requirements and allow coverage for mental health and SUD to be no less restrictive than coverage that is available for other medical conditions.5

Medicaid Detox Programs

There are detox centers that take Medicaid throughout the country. State-funded detox and rehab programs provide services at a lower cost than private facilities. They are funded by state and federal programs, grants, and tax dollars, and they often accept Medicaid.21 These facilities are essential to the treatment of and recovery from substance use disorders for people who cannot afford private programs, which may cost thousands of dollars per day. Both residential facilities and outpatient treatment programs are available through state-funded programs.21

Medicaid Inpatient Rehab

In 2015, the Obama administration issued guidance to outline how states could potentially cover inpatient rehab and residential treatment for substance use disorders to ensure a comprehensive continuum of care as outlined by the American Society of Addiction Medicine (ASAM).3 The ASAM levels of care encompass early intervention, outpatient services, intensive outpatient treatment, partial hospitalization services, inpatient services, and medically-managed intensive inpatient treatment.

Medicaid Outpatient Rehab

States can use Medicaid’s rehabilitation services option to cover some outpatient treatment for substance use disorders.3 Outpatient treatment options like medication-assisted treatment (MAT), counseling, and case management can allow for people in recovery to continue to work and care for their families.

Medicaid for Mental Health Counseling and Substance Miuse Therapy

All state Medicaid programs provide some mental health services, and many provide services for substance use disorders as well.14 They typically include counseling, therapy, MAT, peer services, and various levels of care for addiction treatment.14

Find Drug and Alcohol Rehab Centers Near You

Are MAT Medications Covered by Medicaid?

In 2020, the federal government issued guidelines for states to increase access to MAT for opioid use disorders. States are now required to provide Medicaid coverage for certain drugs, counseling, and behavioral therapy.9

Some of the more common drugs used in MAT for opioid use disorders are:9

  • Methadone: An opioid agonist, it acts on opioid receptors in the brain more slowly and without producing the euphoric effects of opioids like heroin. Methadone helps by reducing withdrawal symptoms and cravings.
  • Buprenorphine: A partial opioid agonist, it also acts on the opioid receptors in the brain, but is not as strong as methadone and can be taken outside of an approved treatment facility. It helps reduce withdrawal symptoms and cravings.
  • Naltrexone: An opioid antagonist, it works differently than methadone or buprenorphine. Naltrexone blocks opioid receptors in the brain and prevents any opioid drug from producing euphoric effects.

Length of Rehab Stay Covered by Medicaid

The length of time a person spends in rehab depends on their individual needs as well as their specific provider benefits. There is no predetermined length of treatment that applies to everyone. However, evidence indicates that treatment outcomes are contingent on adequate treatment length.10

Each state has different rules for eligibility and treatment coverage for Medicaid inpatient rehab. Prior to the ACA, addiction treatment services were often not covered by private insurance and were extremely limited for people with public insurance.11 Insurance companies now have to provide a full range of treatment services, including residential treatment for substance use disorders.11

Inpatient treatment can last anywhere from 5-7 days for medical detox and up to 90 days or more depending on a person’s needs and how they progress in treatment. Outpatient care can last a year or more.12

Does Medicaid Cover Out-of-State Rehab?

The amount of coverage for residential services or outpatient treatment that Medicaid will cover varies by state. You can call any treatment facility to determine if your insurance is accepted, as each state has different eligibility requirements.

Other Rehab Insurance Options

It is possible to have Medicaid supplement private insurance. In most cases, Medicaid acts as the “payer of last resort” for services. Generally, other responsible sources of payment are required to pay for medical costs before Medicaid will do so.16

As requirements can vary substantially from state to state, it will be imperative to work with individual treatment centers to determine what services are covered through individual policies and how much they will cost.

American Addiction Centers offers inpatient rehab in the United States. Call


  1. (2021). Medicaid.
  2. (n.d.). Behavioral Health Services.
  3. Bailey, A., Hayes, K., Katch, H., Solomon, J. (2021). Medicaid is Key to Building a System of Comprehensive Substance Use Care for Low-Income People, Center on Budget and Policy Priorities.
  4. (2021). Substance Use Disorders.
  5. (n.d.). Parity.
  6. National Conference of State Legislatures. (2011). Medicaid and the Affordable Care Act.
  7. United States Senate: Committee on Finance. (2022, March). Mental Health Care in the United States: The Case for Federal Action.
  8. Substance Abuse and Mental Health Services Administration. (2020). National Survey of Substance Abuse Treatment Services: 2020
  9. Department of Health & Human Services: Centers for Medicare & Medicaid. (2020, December 30). Mandatory Medicaid State Plan Coverage of Medication-Assisted Treatment.
  10. National Institute on Drug Abuse (NIDA). (2018). Opioid Agonists and Partial Agonists (Maintenance Medications.
  11. National Institute on Drug Abuse (NIDA). (2018). How Long Does Addiction Treatment Usually Last?
  12. Abraham, A., Andrews, C., Grogran C., Daunno, T., Humphreys, N., Pollack, H., Friedmann, P. (2017, January). The Affordable Care Act Transformation of Substance Use Disorder Treatment. National Center for Biotechnology Information (NCBI).
  13. Lesser, B. (2021). How Long Should Rehab Stay Be?
  14. Mental (2020). Health Insurance and Mental Health Services.
  15. (2018). The SUPPORT for Patients and Communities Act.
  16. Medicaid and CHIP Payment and Access Commission. (n.d.). How Medicaid Interacts with Other Payers.
  17. (n.d.). Eligibility.
  18. Assistant Secretary for Planning and Evaluation (ASPE). (2021). U.S. Federal Poverty Guidelines to Determine Eligibility for Federal Programs.
  19. U.S. Department of Veteran Affairs. (2020). VA Healthcare and Other Insurance.
  20. Center on Budget and Policy Priorities. (2020). Taking Away Medicaid for Not Meeting Work Requirements Harms Veterans.
  21. NIDA. (2018). Drug Addiction Treatment in the U.S.
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Rehabs That May Accept Medicaid Insurance

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Frequently Asked Questions

What is the Difference Between Medicaid and Medicare?

Medicaid is joint federal and state program and typically covers low-income Americans of all ages. Medicare, on the other hand, is a federal program and coverage is usually extended to those who are 65 years of age or older, or who have certain disabilities. Differences in eligibility and coverage between the two differ and one may also qualify for both.

What is Medicaid Called in My State?

Typically, Medicaid in your state will just be called [State] Medicaid, though some states have alternate names for their Medicaid programs. See the list of alternate names in the table below.18
StateAlternative Name
ArizonaArizona Health Care Cost Containment System (AHCCCS)
ColoradoHealth First Colorado
DelawareDiamond State Health Plan (Plus)
FloridaStatewide Medicaid Managed Care Program
IllinoisMedical Assistance Program
IndianaHoosier Healthwise Hoosier Care Connect M.E.D. Works Health Indiana Plan (HIP) Traditional Medicaid
IowaIA Health Link
KansasKanCare Medical Assistance Program
LouisianaBayou Health HealthyLouisiana
MarylandMedical Assistance
MichiganMedical Assistance or MA
MinnesotaMedical Assistance (MA) / MinnesotaCare
MississippiMississippi Coordinated Access Network (MississippiCAN)
MissouriMO HealthNet
New Hampshire-
New JerseyNew Jersey FamilyCare
New MexicoCentennial Care
New YorkMedicaid Managed Care
North CarolinaDivision of Medical Assistance (DMA)
North DakotaNorth Dakota Medicaid Expansion Program
OregonOregon Health Plan
PennsylvaniaMedical Assistance (MA)
Rhode IslandRI Medical Assistance Program
South CarolinaHealthy Connections
South Dakota-
VermontGreen Mountain Care
WashingtonApple Health
Washington D.C.Healthy Families
West Virginia-
WisconsinForwardHealth / BadgerCare

How Long Does It Take To Get Covered by Medicaid?

The time for Medicaid to be approved can vary by state, applicant volume, and whether the application submitted is complete with all required paperwork. Times can typically range between 45 to 90 days. The effective date of coverage however is either on the date of the application or the first day of the month of application. Benefits can also be covered retroactively for up to 3 months prior to applying.

Finding a Rehab Near Me That May Take Medicaid

Dual Eligibility

A person may be enrolled in both Medicaid and Medicare at the same time if they meet the eligibility requirements for both. Someone who has both types of coverage is known as a dual-eligible beneficiary. Medicare typically pays for Medicare-covered services first and then Medicaid tends to cover services Medicare does not cover.
About The Contributor
Adrienne Webster is an Addiction Counselor Licensure Candidate (ACLC) in Bozeman, Montana. After completing her B.A. in Media Arts from Montana State … Read More

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