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Does Medicaid Cover Rehab for Veterans?

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What is Medicaid?

Medicaid is a government-funded health insurance program that provides treatment for low-income, elderly, and disabled individuals. As such, many veterans who fall below a certain income threshold may be eligible for Medicaid insurance. Medicaid provides healthcare coverage for more Americans than any other single health care plan in the U.S.1 The program is funded by both the federal government and state governments. Therefore, while federally funded, Medicaid is administered differently by each state, and your eligibility for coverage may vary depending on where you live.2

Medicaid covers an estimated 72 million Americans, many of whom are low-income, elderly, or disabled.1 Medicaid is not the same as Medicare, another government-sponsored health insurance program. Medicare covers people over the age of 65 and those with certain types of illnesses, regardless of income.3

Can I Have Medicaid and Medicare?

Some people qualify for both Medicare and Medicaid, which is known as dual eligibility. The rules for qualifying for dual eligibility are complex, but the good thing about having both Medicare and Medicaid is that any services that are not covered by one plan are generally covered by the other. People who are dual-eligible beneficiaries may have both Medicare Part A and/or Part B and are covered by Medicaid. In addition, some dual eligible participants have Medicare Savings Programs (MSPs). These MSPs pay such expenses as the Part A premiums, the deductibles for Part A and Part B, as well as coinsurance and copayments. However, the amount of this coverage does vary according to the type of program that the dual eligible participant has.3

In some cases, Medicare can have significant co-pays, but if you have both Medicare and Medicaid, you do not have to pay the co-pays.4

What Are the Benefits of Medicaid?

Medicaid benefits may cover inpatient and outpatient treatment and physician visits. In addition, Medicaid has mandatory benefits that include:5

  • Inpatient and outpatient hospital treatment.
  • Physician services.
  • Lab and x-ray fees.
  • Home health services.

Other services are optional and will vary depending upon one’s need. These optional benefits include such items as case management, physical therapy, occupational therapy, and prescription drugs. The inclusion of these optional benefits varies by state.5 Furthermore, many rehabs take Medicaid as payment.

Medicaid Eligibility

To determine if you are eligible for Medicaid, you need to go to your state’s website to start the process of applying for coverage. This page can help you link to your state’s web page to see if you qualify for Medicaid. On your state’s Medicaid page, you will see other factors that can impact your eligibility, such as parenting status, age, or if you are pregnant. Each state has different criteria for eligibility, but generally, you must be a resident of the state where you are applying for coverage. Your income must also fall below a certain threshold. Furthermore, you have to either be a US Citizen or be a lawful permanent US resident. In general, states base eligibility for Medicaid on such factors as:5

  • Income that meets certain criteria that each state sets and which is generally considered low or very low income.
  • Pregnancy, as states will often cover pregnant women with different levels of income and other criteria than non-pregnant people.
  • Family size, as having more family members increases the amount of family income you can earn.
  • Disability status, as certain types of disabilities, can make a person eligible for Medicaid despite other factors.

Can Veterans Apply for Medicaid?

Veterans can qualify for Medicaid coverage if they meet the eligibility requirements in their state. While your social security payments count as income, veteran’s disability benefits do not. You can have both VA disability benefits and Medicaid coverage in many situations.6

Do I Need Medicaid If I Have VA Benefits?

Some veterans may wonder if they need Medicaid, especially if they already have VA benefits. VA benefits do cover a large variety of services, but it depends entirely on your situation as to whether or not Medicaid will be of benefit to you. Medicaid can help pay for services not covered by the VA.7

Do VA Benefits Count as Income for Medicaid?

In determining if you qualify for Medicaid, such income streams, such as retirement pensions, do count as income, as do some governmental payments, such as SSI disability. However, your VA disability payments do not count towards income.6

It is important to note that other criteria for Medicaid, such as family size and income limits, vary from one state to another and there is no way to know if you will qualify for Medicaid in a certain state until you apply. It is important to note that you never know until you apply if you will qualify for Medicaid. The changes under the Affordable Care Act in 2010 led to changes in many states where Medicaid coverage was open to a greater number of people under age 65 than ever before with higher income levels than had been used in the past to determine Medicaid eligibility. This means that, even if you applied for Medicaid in the past and were denied, you may now be eligible for Medicaid in your state.2

Does Medicaid Cover Rehab?

Many may wonder if Medicaid covers rehab or other treatments for substance abuse. In general, the answer is yes. There are many treatment centers that accept Medicaid. However, Medicaid is not universally accepted, so it’s important to make sure a rehab facility accepts and works with the program.

Medicaid coverage is a comprehensive health insurance plan funded by the Federal government, which mandates that states are required to cover all or part of substance abuse treatment.8 An estimated 12% of all Medicaid recipients have substance use disorders. Medicaid accounts for 21% of all the money spent each year in the U.S. to treat substance use disorders.9

However, for Medicaid drug rehab, the specific services that are covered for rehab are determined by each state, so your state may or may not cover a certain type of rehab.8 In general, the types of rehab that Medicaid covers include:10

  • Inpatient treatment, where you stay 24/7 in a hospital or other facility to receive treatment.
  • Residential treatment, where you stay for longer-term treatment, sometimes for months. In residential treatment, you attend self-help groups, engage in structured living, and may get help with finding a job.
  • Online or telehealth services, where you can receive some types of counseling and treatment in the comfort of your own home.
  • Intensive outpatient treatment, where you attend groups and other types of counseling but can go home in the evenings and on weekends. Ideally, you would attend treatment for at least 9 hours per week over 3 or more sessions.11
  • Medications, such as methadone and buprenorphine, are used to help stop cravings and prevent relapse for people with opioid use disorders.10

In some cases, Medicaid may also cover telehealth services.12

Does Medicaid Cover Medications?

Medicaid covers some types of medications, particularly those used as a form of medication-assisted treatment (MAT). However, not all states cover all types of medications. Commonly covered types of MAT are:13

What is the Name of Medicaid in my State?

Typically, Medicaid in your state will just be called [State] Medicaid, though some states have alternate names for their Medicaid programs. See the list of alternate names in the table below.

State Alternative Name
Alaska DenaliCare
Arizona Arizona Health Care Cost Containment System (AHCCCS)
California Medi-Cal
Colorado Health First Colorado
Connecticut HuskyHealth
Delaware Diamond State Health Plan (Plus)
Florida Statewide Medicaid Managed Care Program
Hawaii MedQuest
Illinois Medical Assistance Program
Indiana Hoosier Healthwise Hoosier Care Connect M.E.D. Works Health Indiana Plan (HIP) Traditional Medicaid
Iowa IA Health Link
Kansas KanCare Medical Assistance Program
Louisiana Bayou Health HealthyLouisiana
Maine MaineCare
Maryland Medical Assistance
Massachusetts MassHealth
Michigan Medical Assistance or MA
Minnesota Medical Assistance (MA) / MinnesotaCare
Mississippi Mississippi Coordinated Access Network (MississippiCAN)
Missouri MO HealthNet
Nebraska ACCESSNebraska
New Hampshire
New Jersey New Jersey FamilyCare
New Mexico Centennial Care
New York Medicaid Managed Care
North Carolina Division of Medical Assistance (DMA)
North Dakota North Dakota Medicaid Expansion Program
Oklahoma SoonerCare
Oregon Oregon Health Plan
Pennsylvania Medical Assistance (MA)
Rhode Island RI Medical Assistance Program
South Carolina Healthy Connections
South Dakota
Tennessee TennCare
Vermont Green Mountain Care
Washington Apple Health
Washington D.C. Healthy Families
West Virginia
Wisconsin ForwardHealth / BadgerCare
Wyoming EqualityCare

You Might Also Be Interested In


  1. Medicaid.
  2. Eligibility.
  3. Learn based on your situation.
  4. Center for Medicare and Medicaid Services. (2020) Dually eligible beneficiaries under Medicare and Medicaid.
  5. Benefits.
  6. What to include as income.
  7. Department of Veterans Affairs. (2020). VA healthcare and other insurance.
  8. Grogan, C.M. et al. (2016). Survey Highlights Differences In Medicaid Coverage For Substance Use Treatment And Opioid Use Disorder Medications. Health Affairs, 35(12), 2289–2296.
  9. Substance use disorders.
  10. National Institute on Drug Abuse. (2019). Treatment approaches for drug addiction.
  11. McCarty, D. et al. (2014). Substance Abuse Intensive Outpatient Programs: Assessing the Evidence. Psychiatric Services, 65(6), 718–726.
  12. Telemedicine.
  13. Substance Abuse and Mental Health Services Administration. (2014). Medicaid coverage and financing of medications to treat alcohol and opioid use disorders.