The difference between Medicare and Medicaid is quite simple. Medicare is a federally funded government program that provides health insurance coverage for people who are 65 years of age or older and for people who have certain types of disabilities. Medicare is available for these individuals regardless of their income level. Medicaid is a federal and state program that provides healthcare coverage to individuals at extremely low income levels.
Both programs offer coverage for specific types of diagnoses at detailed rates of reimbursement to healthcare providers. The Affordable Care Act (often referred to as Obamacare) mandated that all insurance providers must cover basic aspects of healthcare, including mental health issues. At the time of this writing, the statutes of the Affordable Care Act remain in effect despite efforts by the Trump administration to repeal it. Substance abuse treatment is covered under this mental healthcare designation. Thus, Medicare and Medicaid programs must provide coverage for issues related to substance abuse and substance use disorders.
Coverage under Medicare is available to an individual who is 65 years old or older as well as to individuals of any age with verifiable disabilities. Being covered under Medicare requires that individuals pay a monthly fee (premium), which is based on the person’s level of income. Individuals who have lower levels of income pay lower premiums for the coverage.
Medicare coverage occurs under four different sections or parts. Each of these different parts may cover different aspects of treatment for substance abuse/substance use disorders. These parts are:
- Medicare Part A: Part A often provides inpatient treatment benefits, including inpatient treatment in a psychiatric setting, which would qualify as inpatient substance use disorder treatment. Inpatient psychiatric treatment is limited under Part A, such that a person may be covered for 60 days in an inpatient rehab facility without a copayment, but there may be a deductible, depending on the person’s policy. There is also a limit to coverage over the person’s lifetime for inpatient psychiatric care, including inpatient care for substance abuse. The current lifetime limit for this type of treatment is 190 days for freestanding psychiatric inpatient care (the entire facility is devoted to the treatment of psychiatric disorders, such as substance abuse). This type of treatment does cover some aspects of inpatient withdrawal management (medical detox), such as methadone treatment for opiate abuse in an inpatient stay.
- Medicare Part B: Part B is designed to cover outpatient treatment costs. Medicare develops its own scale of approved treatment costs and typically covers up to 80 percent of these. This leaves the patient responsible for the other 20 percent of costs, and they can pay out of pocket or use some supplemental healthcare plan to cover these costs. Part B services covered under Medicare include therapy for substance use disorders, medicines administered at follow-up periods following inpatient stays, follow-up treatment for substance use disorders after an inpatient stay, and some aspects of patient education.
- Medicare Part C: This is an optional program that provides private insurance for individuals who wish to receive greater coverage.
- Medicare Part D: This section under Medicare covers the cost of prescription medications. For prescription medications used in the treatment of substance use disorders to be covered under this section of Medicare, the physician must demonstrate that the medication is a medical necessity. Typically, Medicare has its own specifications regarding which conditions justify medical necessity for which medications. For instance, the use of methadone to treat pain is covered under this section; however, the use of methadone to treat substance abuse issues is not. Physicians who put together good treatment plans and justify the use of the medication may get approval in cases where there is some question as to whether the treatment qualifies as a medical necessity.
Not all facilities accept Medicare. In adrdition, the principle of medical necessity must be satisfied before Medicare will cover most treatments. Medicare also requires that a physician has a written treatment plan for the individual before it covers the cost of most interventions.
For more information about Medicare, one can visit the website for Medicare to learn about the general benefits offered in conditions needed to satisfy coverage. A very useful resource for locating treatment providers that may accept one’s insurance is the Substance Abuse and Mental Health Services Administration (SAMHSA) treatment provider locator. In addition, Psychology Today has put together a list of mental health treatment providers in Nevada that accept Medicare. Individuals can contact these facilities to learn the extent of their treatment services for substance use disorders.
It is important to remember that Medicare only pays a portion of its approved fee to treatment providers. Individuals are held accountable for the remaining amount. Numerous supplemental insurance programs that are designed to work with Medicare are available.
Coverage under Medicaid
Medicaid is the single largest provider of mental healthcare services in the United States. Medicaid is basically public insurance coverage for low-income individuals and families. Eligibility for Medicaid is determined by several factors that include one’s age, income level, the number of people in the household, and whether they have any disabilities; the specific types of disabilities covered are defined by Medicaid.
Coverage based on income is determined by the federal poverty level guidelines (FPL; the poverty level is the level of income that qualifies a household as being at the “poverty level” as specified by the government). In Nevada, people can qualify for Medicaid if they live in a household that has an annual income of less than or equal to 138 percent of the FPL. The FPL guidelines are:
- One person household FPL is $11,770 (upper limit in Nevada $16,242.60).
- Two person household FPL is $15,930 (upper limit in Nevada $21,983.40).
- Three person household FPL is $20,090 (upper limit in Nevada $27,724.20).
- Four person household FPL is $24,250 (upper limit in Nevada $33,465).
In Nevada, pregnant women are eligible for Medicaid if their income is 160 percent or less of the FPL. Coverage for children depends on the child’s age. To apply for Medicaid in Nevada, the individual must be a resident of Nevada, a citizen of the United States, and meet the FPL requirement. In order to apply for Medicaid, one can either go to the Medicaid website or the Nevada Medicaid website and submit an application.
The coverage of substance abuse treatment issues under Medicaid varies, depending on the treatment provider, and many treatment providers may not accept Medicaid. One can use the SAMHSA treatment locator tool to get a list of local substance use disorder treatment providers who accept Medicaid. Most community mental health service centers will accept Medicaid. In addition, these centers will often accept an individual for treatment who has applied for Medicaid and waiting for confirmation of their coverage.