Medicaid is a state and federal program of health coverage designed to be available to people with low income levels. Medicare is a federally sponsored government program that provides healthcare coverage for individuals over the age of 65 or for individuals who have some form of disability regardless of their income. Both offer coverage for a number of different issues, including issues with mental health. The Affordable Care Act (Obamacare) required all insurance providers to cover basic aspects of addiction treatment.
Medicaid provides public insurance for low-income families. According to Medicaid.gov, Medicaid is the single largest payer in the United States for mental healthcare services. Eligibility for Medicaid is determined by a number of factors, including income, age, number of people in the household, disabilities, etc. Individuals may enroll for Medicaid at any time.
To determine one’s eligibility for Medicaid, individuals can either:
- Go to the Medicaid website and follow the instructions on enrollment. Individuals in Texas can go to the State Medicaid Website.
- Complete an application at the Health Insurance Marketplace. Doing so will reveal what types of plans and programs one qualifies for.
The Texas Medicaid website states that the application process usually takes around 45 days to complete. Texas is one of the few states that did not expand Medicaid under the Affordable Care Act and has very stringent eligibility guidelines for Medicaid. In Texas, individuals who are blind, elderly, or otherwise disabled can qualify for Medicaid. Parents with dependent children and incomes of up to 15 percent of the federal poverty level (FPL) are eligible. Children in households with incomes of up to 201 percent of the FLP are eligible, and pregnant woman with incomes of up to 198 percent of the FPL are eligible.
The FPL varies, depending on the number of individuals in the household. For example, in 2015:
- The FPL for a one-person household is $11,770.
- The FPL for a two-person household is $15,930.
- The FPL for a three-person household is $20,090.
- The FPL for a four-person household is $24,250.
Adults without dependent children are not eligible for Medicaid in Texas at all unless they have a disability. While Medicaid does cover a number of aspects of treatment for substance use disorders, not all treatment providers will accept Medicaid. The Substance Abuse and Mental Health Care Services Administration (SAMHSA) provides a resource that can connect individuals with providers that accept Medicaid.
Medicare is available to those over 65 years old and to individuals with certain disabilities. Individuals pay a monthly premium for Medicare. The premium is based on the individual’s income, such that people who earn less money pay lower premiums. Medicare services can cover costs associated with inpatient and outpatient treatment for substance use disorders. There are four parts to Medicare that cover different aspects of treatment for substance use disorders.
- Part A: This part of Medicare coverage may pay for inpatient treatment. With Part A, up to 60 days in rehab is covered without a co-insurance payment, but there is a deductible depending on the individual’s coverage. Medicare only covers a limited amount of days of inpatient care in a psychiatric setting over an individual’s lifetime; the current limit is 190 days. This rule apparently applies only to freestanding psychiatric hospitals and not hospitals that are part of a larger hospital system. Methadone treatment administered during an inpatient stay is covered.
Part B: This part may cover outpatient costs. Medicare typically covers up 80 percent of approved treatment costs, and the individual is responsible for the other 20 percent (or the person can have a supplemental healthcare plan to Medicare that can take care of some of these costs). Part B may also cover treatment for co-occurring disorders, such as anxiety disorders, depression, etc. Some of the services covered under part B include:
- Substance use disorder therapy
- Patient education
- Follow-up care after inpatient treatment
- Drugs administered during follow-up care
- Part C: Individuals who want more extensive benefits under Medicare can choose Part C, which is a Medicare private insurance program. Coverage under this program will be different and may be more expensive, depending on the individual situation.
- Part D: This part covers prescription medication costs. For addiction treatment, this typically includes drugs that are medically necessary for the individual. Part D does not cover methadone treatment for substance use disorders, but it does cover methadone treatment for pain.
Again, there are a couple caveats with Medicare coverage for substance use disorder treatment.
- Services are only covered at Medicare-participating facilities.
- The treatment services must be listed as medically necessary by the individual’s physician.
- The individual’s physician must put together their treatment plan in writing.
Again, individuals can use the SAMHSA website above to find Medicare-participating treatment providers in their area. In addition, one can get information from the Medicare website and the Texas Department of State Health Services regarding Medicare-participating treatment providers.
There are a number of supplemental insurance programs that work with Medicare benefits, and these programs can help to cover the costs of substance use disorder treatment that are not directly covered by Medicare. It is important to understand that Medicare has a list of approved costs for each specific type of treatment, which will often be far lower than the charge made by the treatment provider. Medicare only pays their approved fees. This means that individuals who use only Medicare may receive bills from their treatment providers for the portion of the costs that Medicare did not pay. Individuals looking for supplemental insurance programs can find a number of options available online.
Some individuals may be eligible to receive both Medicaid and Medicare benefits. Individuals who are eligible for both of these programs may be able to apply the benefits from each program to cover the costs of their treatment for their substance use disorder. Individuals who are over 65 years old or disabled and have low incomes may be eligible for both programs.