Does Medicaid Cover Rehab?

Addiction is one of the most common public health issues in the United States. Almost 12% of individuals over 18 who are enrolled in Medicaid have a diagnosed substance use disorder.1 Substance use disorder is the clinical diagnosis term that mental health professionals use to describe the symptoms and behaviors associated with addiction. So how does Medicaid cover rehab for these individuals in need?

In this article:

What’s the Difference Between Medicaid and Medicare?

While “Medicaid” and “Medicare” are sometimes used interchangeably, they are actually two different programs.

Medicaid is an assistance program run by state and local governments based on federal guidelines. Medicaid helps low-income individuals pay for covered medical expenses at low or no cost. States may refer to Medicaid by other names, such as Medi-Cal in California.

Medicare is the federal program that provides low-cost health insurance to individuals over 65 and qualifying people with disabilities and on dialysis. Medicare coverage is the same across the U.S.2

Does Medicaid Cover Rehab?

Medicaid is the largest payer for substance use disorder treatment, including services like rehab, covering as much as 40% of individuals diagnosed with opioid use disorder. Medicaid also covers the most individuals in demographics identified as “high-risk,” including individuals in need of addiction care who are pregnant and postpartum and involved in the criminal justice system.3

Healthcare reform through the Affordable Care Act (ACA) in 2014 made mental health care, including substance use disorder treatment, one of 10 essential elements of health benefits.4 There are some coverage exceptions for individuals who qualified for Medicaid before the ACA went into effect, but all newly eligible individuals qualify for addiction treatment services.

While Medicaid healthcare plans are required to cover substance use disorder treatment, how your Medicaid plan covers individual services involved in addiction treatment, such as rehab, depends on state-specific guidelines.

How Does Medicaid Rehab Coverage Vary by State?

The Centers for Medicare & Medicaid Services (CMS), which is a federal department, issues recommendations about which addiction services should be covered by state Medicaid healthcare plan. However, only some of these recommendations are mandatory.

All state Medicaid programs are required to provide coverage for:5

  • Medication-assisted treatment (MAT) when the medication being used is a covered drug approved by the Food and Drug Administration (FDA) for addiction treatment
  • Counseling and behavioral therapy related to MAT
  • Pediatric mental health services, including the “full array” of services for substance use disorder treatment

It is optional for states to provide inpatient care for substance use disorders, also known as inpatient rehab.

CMS recommends that state Medicaid programs cover:1,6

  • Family-focused residential treatment
  • Care for infants with neonatal abstinence syndrome
  • Coverage for industry-standard, evidence-based treatment approaches, such as certain types of behavioral therapy
  • Additional measures to address opioid addiction and the risk of overdose
  • Care coordination, such as linking substance use disorder care to primary care

How Do I Know If Medicaid Covers Rehab for Me?

If you are enrolled in Medicaid, you can answer the question, “Does Medicaid cover rehab for me?” in a few ways, including:7

  • Visit your state Medicaid website: Like private insurance websites, Medicaid websites include information about covered websites and provide a directory of in-network providers of specific services.
  • Call your Medicaid membership number: Contact the member services phone number on the back of your Medicaid or CHIP card to learn more about your covered services. You can often check if a service is covered via the automated phone system. If you have questions about a specific provider or specialty service, speak to a membership services representative.
  • Talk to your referring doctor: If you are referred to addiction treatment by a doctor who takes Medicaid, they may be able to refer you directly to a covered detox, rehab, or medication-assisted therapy facility.
  • Talk to your prospective rehab facility: If you have chosen a rehab you’d like to enroll in, call the intake department to see if they take your Medicaid plan. Most facilities can check your coverage over the phone using your membership number.

How Do I Know If I’m Enrolled in a Medicaid Insurance Plan?

If you aren’t sure if your Medicaid coverage is active, you don’t know if you are currently enrolled in a Medicaid healthcare plan, or if you do not have your current Medicaid membership card, contact your state Medicaid office.

A Medicaid representative can help you determine if your current Medicaid benefits include an insurance plan. If you are not currently covered by a Medicaid insurance plan, this representative can help you take the next step to get coverage for rehab and other essential healthcare services.

What Can I Do if Medicaid Doesn’t Cover Rehab in My State?

While Medicaid covers many addiction recovery services, it may not cover a specific type of rehab in your state.

If You Are Billed for Uncovered Addiction Services

Because substance use disorder care is considered an essential healthcare benefit under the Affordable Care Act, you may receive addiction services and find out later that only some of those services were completely covered by your Medicaid plan. Uncovered services could be billed entirely out of pocket, leaving you to pay the whole amount.
If you receive a bill for services you expected to be covered, contact your state Medicaid agency. You may be able to file an appeal, especially if your doctor or your addiction care team can provide medical documentation supporting the fact that the services you received were medically necessary and fell under the purview of your plan.

If You Are Unable to Find Covered Services

If you are still looking for addiction treatment services and have not found a provider that takes Medicaid even after checking with your membership services, consider supplementing your Medicaid plan with a health insurance plan from the Healthcare Marketplace. You can purchase plans specifically to cover substance use disorder treatment.
You can also speak to the intake departments at recommended facilities. Some rehabs offer alternative payment options, such as sliding scale, payment plans, and discounts for cash-pay patients.

If You Do Not Qualify for Medicaid

If you do not qualify for Medicaid or Medicare coverage, you may qualify for a scholarship or grant to receive critical addiction treatment services. These financing sources may be federal, but are more likely to be local. For example, there may be a nonprofit in your area that provides scholarships to get individuals into detox programs.
These types of funding are often offered to individuals who have the highest need, such as individuals who do not have current ID or stable housing and would otherwise not be able to complete the paperwork necessary to apply for Medicaid or rehab services.

If You Do Not Meet the Criteria for Rehab Services

You may need help for substance misuse or addiction and not qualify for specific types of addiction services. Free, community-based, and peer-led resources may help fill the gap if you are not able to receive formal addiction treatment at this time.

These resources include support groups–including Alcoholics Anonymous (AA) and SMART Recovery–transitional housing, and community care programs that help individuals work on breaking down the barriers that can keep them from qualifying for insurance coverage and getting into treatment. A doctor, clinic, social worker, parole office, nonprofit representative, or other community representative may be able to connect you with resources in your area.

If you are ready to enter addiction treatment, get help at 800-914-7089 (Info iconWho Answers?)  to learn about substance use disorder treatment options based on your needs and circumstances.


  1. Centers for Medicare & Medicaid Services. (n.d.). Substance Use Disorders.
  2. U.S. Department of Health & Human Services. (2015, October 02). What is the difference between Medicare and Medicaid?
  3. Cole, E., Donohue, J. & Raslevich, A. C. (2020, September 25). Medicaid’s Role in Improving Substance Use Disorder Treatment. Primer.
  4. Office of National Drug Control Policy. (n.d.). Substance Abuse and the Affordable Care Act. 
  5. Centers for Medicare & Medicaid Services. (2020, December 30). Mandatory Medicaid State Plan Coverage of Medication-Assisted Treatment.
  6. Centers for Medicare & Medicaid Services. (2014, October 29). Delivery Opportunities for Individuals with a Substance Use Disorder. CMCS Informational Bulletin.
  7. U.S. Department of Health & Human Services. (n.d.). Medicaid & CHIP.
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