Medicare Addiction Treatment Report

• The median age of Medicare beneficiaries who receive Medicare-covered addiction treatment is just 56 years old. The age to qualify for Medicare based on age is 65.
  
  
• In all but 5 states the median age of Medicare beneficiaries receiving addiction treatment is under 65.
  
  
• Medicare spent $9.29 million on addiction treatment services from 2012 to 2018. Roughly half of that was spent treating beneficiaries under the age of 65.
  
  
• Medicare spending on addiction treatment from 2012 to 2018 was substantially higher in Michigan than in any other state, followed by Texas, New Hampshire, Oklahoma and North Carolina.

While Medicare beneficiaries under the age of 65 make up only 14% of the total Medicare population, they account for 48% of all beneficiaries receiving substance abuse and addiction treatment covered by Medicare. 

Medicare beneficiaries under the age of 65 typically qualify for benefits because of a disability or a condition such as End-Stage Renal Disease or Lou Gehrig’s Disease (ALS). While they make up a small fraction of all Medicare beneficiaries, many Americans may not even be aware that there are any Medicare beneficiaries under the age of 65 at all. 

We analyzed Medicare usage rates and data from the Centers for Medicare & Medicaid Services (CMS) to identify the states where Medicare spends the most on addiction treatment and to better understand the population of beneficiaries receiving these services.

More than 21 million people in the U.S. need treatment for substance abuse every year, including one in seven adults ages 18 to 25 and one in 14 adults ages 26 and older. There are only 3,000 physicians in the nation who are specially trained to treat them all, or one specialist for every 7,000 people needing treatment.

Among Medicare beneficiaries who received addiction treatment services in 2018 (the most recent data available), nearly half were under the age of 65, the age at which most people become eligible for Medicare due to age. 

The median age of all Medicare beneficiaries receiving drug or alcohol addiction treatment was just 56, which is nine years younger than the Medicare eligibility age.

The median age of beneficiaries receiving these treatment services was 65 or above in only five states. 

The median age of a Medicare beneficiary receiving addiction treatment in Kentucky was just 47, the lowest of any state. Kentucky had the seventh-highest rate of drug overdose deaths in the country in 2019.

North Carolina and Maine were the only other states with a median age under 50 for Medicare beneficiaries receiving addiction services (the median age in both states was 48). 19 states have median ages that were lower than the overall median age of 56. 

Delaware (median age = 73), Rhode Island (69) and California (68) had the highest median ages of Medicare beneficiaries receiving treatment for substance abuse and addiction. 

Medicare spends more than $1.3 million per year on services dedicated to treating alcohol and substance abuse and addiction.

Spending was highest in Michigan, which was the only state to top $1 million in total spending from 2012 to 2018. Medicare spending on addiction treatment in Michigan was 77% higher than in Texas, the state with the next highest amount. 

Some states see far less Medicare spending on addiction services, which could indicate a smaller population of beneficiaries in those states who are suffering from substance abuse disorder. But it could also indicate a greater reluctance on the part of those beneficiaries to seek treatment.

In 6 states (AL, DE, HI, KY, LA, MS), the total Medicare spending for alcohol and substance addiction treatment was under $2,000 per year for the study period. There were 20 states where annual Medicare spending on such services was 10 times that amount, or more than $20,000 per year. 

Kentucky, which has the youngest Medicare beneficiaries receiving addiction services, saw just $10,600 in Medicare spending on such care over the 7-year study period. In Mississippi, only $4,800 was spent by Medicare on alcohol and substance addiction treatment, or roughly $685 per year. And that’s for Medicare beneficiaries of all ages. 

Medicare spending for addiction treatment in Michigan was 262 times higher than that of Mississippi during the 7-year study period. And while there are three times as many Medicare beneficiaries in Michigan than in Mississippi and four times as many addiction treatment facilities, the rate of drug overdose deaths in Mississippi isn’t relatively far behind that of Michigan.

This suggests that lower Medicare spending on substance abuse treatment in Mississippi could partly come from a lack of beneficiary awareness regarding their Medicare benefits.

What Addiction Services Does Medicare Cover?

Medicare covers a range of screening and treatment services for alcohol and substance use on both an inpatient (Medicare Part A insurance) and outpatient (Part B insurance) basis.

Covered services include:

• Annual screenings and counseling for alcohol and substance misuse
  
  
• Opioid abuse treatment programs and medications
  
  
• Patient education
  
  
• Toxicology testing
  
  
• Individual and group therapy
  
  
• Psychotherapy and psychiatric assessments
  
  
• Family counseling
  
  
• Counseling services via telehealth

Beneficiaries typically pay nothing for diagnostic screenings and opioid use disorder treatment services, provided they are deemed medically necessary and received by a Medicare-approved provider. Inpatient and outpatient mental health services may come with copay/coinsurance costs and a deductible.

Private Medicare plans – such as Medicare Part D prescription drug plans and Medicare Advantage (Part C) plans that include Part D benefits – may cover medications prescribed to help treat substance abuse disorder.

Medicare beneficiaries under the age of 65 account for a disproportionate amount of Medicare spending on alcohol and substance abuse and addiction treatment services. 

There are large disparities in spending distribution by state, even when accounting for each state’s respective Medicare population, number of treatment facilities and drug overdose rates. 

The data used for this project comes from the Center for Medicare & Medicaid Services (CMS) Medicare Physician and Other Supplier National Provider Identifier (NPI) Aggregate Report, Calendar Year 2018. The data was accessed on May 13, 2021.

The data includes provider and beneficiary data from 2012 to 2018. States not included in the analysis did not have available data regarding beneficiary usage of addiction treatment services.