Medicare in Indiana: Plan Types and Coverage for Drug Rehab and Mental Health

The Grove Estate does not accept Medicare. The Grove Estate accepts commercial insurance for residential addiction treatment in Peru, Indiana; call 765-204-1188 to check your plan. Indiana Medicare members can find a treatment provider that takes Medicare by dialing 2-1-1 for Indiana 211 or through the FSSA Division of Mental Health and Addiction’s list of certified addiction treatment providers.

Medicare is the federal health insurance program for people 65 and older and for younger people with certain disabilities, and Medicare covers substance use disorder and mental health treatment under Parts A, B, C and D. Each part covers a different setting, from hospital stays to outpatient counseling and prescription medications.

What is Medicare Coverage for Substance Use Disorder Treatment?

Medicare coverage for substance use disorder treatment is split across 4 parts, each covering a different type of care. The following are the 4 parts of Medicare and the substance use disorder care each one covers:

• Part A covers inpatient care in a general or psychiatric hospital, including hospital-based withdrawal management.
• Part B covers outpatient counseling, intensive outpatient and partial hospitalization services, and care in opioid treatment programs.
• Part C, Medicare Advantage, covers everything Original Medicare covers through a private plan with its own network and rules.
• Part D covers outpatient prescription medications, including many used for mental health conditions.

Medicare does not list non-hospital residential rehab as a covered setting, so people with Medicare who need residential treatment confirm coverage with the facility and their plan first.

How Does Medicare Part A Cover Inpatient Drug Rehab in Indiana?

Medicare Part A covers inpatient care when a person is admitted to a general or psychiatric hospital, including withdrawal management that needs a hospital stay. The following are the 2026 Medicare Part A costs set by the Centers for Medicare & Medicaid Services (CMS):

Medicare Part A pays for no more than 190 days of inpatient care in a freestanding psychiatric hospital over a person’s lifetime. That limit does not apply to a psychiatric unit inside a general hospital.

What Does Medicare Part B Cover for Outpatient Mental Health and Addiction Treatment?

Medicare Part B covers outpatient substance use disorder and mental health care, including counseling, intensive outpatient services and partial hospitalization through a hospital outpatient department. In 2026, the Part B deductible is $283 and the standard monthly premium is $202.90, according to CMS. After the deductible, a person pays 20% of the Medicare-approved amount for most outpatient services.

Medicare Part B has covered care in opioid treatment programs since January 1, 2020, the first time Medicare paid for methadone to treat opioid use disorder. At an opioid treatment program enrolled in Medicare, Part B covers methadone, buprenorphine and naltrexone with no copayment, and the Part B deductible applies. Read more about opioid addiction treatment at The Grove Estate.

How Do Medicare Part C (Medicare Advantage) Plans Handle SUD Treatment?

Medicare Advantage plans cover every substance use disorder service that Original Medicare covers, but each plan sets its own provider network, costs and prior authorization rules. A person with a Medicare Advantage plan checks that a treatment provider is in the plan’s network before admission, because out-of-network care costs more or is not covered.

What Role Does Medicare Part D Play in Prescription Drug Coverage for Addiction Treatment?

Medicare Part D covers outpatient prescription medications, including many used to treat mental health conditions and substance use disorders. In 2026, a person’s out-of-pocket costs for covered Part D drugs stop at $2,100 for the year, and covered drugs cost nothing after that point.

Medication for opioid use disorder remains underused in Medicare. About 1.1 million Medicare enrollees had opioid use disorder in 2022, and only 18% received medication to treat it, according to the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). About 52,000 Medicare enrollees had an opioid overdose that year.

Which Indiana Treatment Facilities Accept Medicare for Drug Rehab and Mental Health Services?

74% of substance use treatment facilities in Indiana reported accepting Medicare in 2024, compared with 89% accepting Medicaid and 91% accepting private insurance, according to KFF’s analysis of SAMHSA’s National Substance Use and Mental Health Services Survey (N-SUMHSS). Nationally, 53% of substance use treatment facilities accepted Medicare in 2024.

Indiana Medicare members find a facility that takes Medicare through Indiana 211, the FSSA list of certified addiction treatment providers, or by calling 1-800-MEDICARE.

How Much Does Medicare Cover Compared to Out-of-Pocket Costs for Addiction Treatment?

A person with Original Medicare pays a deductible for each part and then a share of the cost, with no yearly out-of-pocket maximum for Parts A and B. The following are the main 2026 out-of-pocket costs for substance use disorder care under Original Medicare, according to CMS:

• Hospital stays under Part A cost $1,736 per benefit period, plus $434 per day from day 61 to day 90.
• Outpatient care under Part B costs the $283 yearly deductible, then 20% of the Medicare-approved amount.
• Opioid treatment program care under Part B costs the Part B deductible and no copayment.
• Prescription drugs under Part D cost no more than $2,100 out of pocket for the year.

Medicare Advantage plans set their own costs and include a yearly out-of-pocket limit. At an opioid treatment program, people with both Medicare and Indiana Medicaid pay nothing for services that Medicaid covers.

What Are the Coverage Gaps and Limitations in Medicare for SUD Treatment?

The main Medicare gaps for substance use disorder care are the lifetime psychiatric hospital limit, no listed coverage for non-hospital residential rehab, and network limits in Medicare Advantage. Fewer Indiana treatment facilities accept Medicare than accept Medicaid or private insurance.

How Do You Apply for Medicare Coverage for Drug Rehab and Mental Health Treatment in Indiana?

A person signs up for Medicare through the Social Security Administration, and most people become eligible at 65. A person who already has Medicare uses that coverage for treatment by choosing a provider that accepts Medicare, or a provider in the plan’s network for Medicare Advantage. To appeal a denied claim under Original Medicare, a person files by the date printed on the Medicare Summary Notice.

What Additional Resources Support Addiction Treatment Access in Indiana Beyond Medicare?

Indiana residents reach treatment help through Indiana 211 and the FSSA Division of Mental Health and Addiction, whatever their insurance. The following are 3 Indiana resources for people looking for addiction treatment:

• Indiana 211, reached by dialing 2-1-1, connects callers to treatment providers and community services.
• The FSSA Division of Mental Health and Addiction’s list of certified addiction treatment providers lists state-certified programs.
• Recovery Works, an FSSA program, pays for treatment for people in the justice system who do not have insurance.

Read more about Indiana coverage on The Grove Estate’s insurance coverage for addiction treatment in Indiana and Medicaid in Indiana pages, or verify your insurance with The Grove Estate.

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References

• Centers for Medicare & Medicaid Services. 2026 Medicare Parts A & B Premiums and Deductibles. cms.gov
• Medicare.gov. Mental health and substance use disorder coverage; Opioid use disorder treatment services. medicare.gov
• U.S. Department of Health and Human Services, Office of Inspector General (2023). The Consistently Low Percentage of Medicare Enrollees Receiving Medication to Treat Their Opioid Use Disorder Remains a Concern (OEI-02-23-00250). oig.hhs.gov
• KFF. Percent of Substance Use Treatment Facilities Reporting Participation with Insurers (N-SUMHSS 2024). kff.org