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Medicaid: Definition, Coverage, Advantages and Disadvantages

Author: Thomas Roth

Last Updated: 10/02/2023

Alcoholism, a severe and often chronic condition, affects millions of Americans every year. Navigating the path to recovery can be challenging, especially when considering the financial implications of treatment. Enter Medicaid – a state and federally funded program designed to provide health coverage to individuals based on income and other qualifying factors. But what role does Medicaid play in addressing alcoholism? 

This guide aims to shed light on Medicaid’s provisions, eligibility, and the support it offers to those seeking alcoholism treatment. Whether you’re personally affected, know someone who is, or are simply seeking information, understanding Medicaid’s role can be a pivotal step in the recovery journey.

What Is Medicaid?

Medicaid is a joint federal and state program designed to provide health coverage for individuals with limited income, including some low-income adults, children, pregnant women, elderly adults, and people with disabilities. Established in 1965 alongside Medicare under the Social Security Act, Medicaid has since been a crucial lifeline for millions of Americans who might otherwise go without essential health services.

Unlike Medicare, which is primarily based on age, Medicaid eligibility is primarily determined by income. Each state administers its own Medicaid program, and while there are federal guidelines, states have flexibility in shaping many aspects of their programs. This means the specifics of Medicaid — from the services covered to the eligibility criteria — can vary considerably from one state to another.

Beyond providing a safety net for many underserved populations, Medicaid also plays a vital role in supporting public health goals, including the fight against chronic conditions and diseases like alcoholism. Through Medicaid, many individuals gain access to treatment services that can be instrumental in fostering recovery and improving overall health outcomes.

How Does Medicaid Work? 

At its core, Medicaid operates as a partnership between the federal government and individual states. Both parties contribute funding, and both have a say in the program’s rules and administration. However, the specifics can get more nuanced. Learn more about how Medicaid works below.


Medicaid is funded jointly by states and the federal government. The federal government provides a matching amount for every dollar the state spends on its Medicaid program. This matching rate, known as the Federal Medical Assistance Percentage (FMAP), varies by state based on criteria like average per capita income.


Each state administers its own Medicaid program within federal guidelines. This means states have flexibility in how they design their programs. For example, they can choose the types, amount, duration, and scope of services they offer. They can also determine how Medicaid services are delivered, whether through private insurance companies, state-run programs, or a combination of both.


While the federal government sets baseline eligibility criteria, states have the option to expand eligibility to other groups or set more restrictive criteria. Generally, Medicaid serves low-income individuals and families, people with certain disabilities, and elderly populations. With the Affordable Care Act (ACA), many states expanded their Medicaid programs to cover all adults below a certain income level.


Medicaid covers a comprehensive set of benefits, including hospital and doctor visits, prescription drugs, mental health services, and preventive care. Additionally, states can opt to provide other benefits beyond these standard offerings.


Those seeking to benefit from Medicaid must apply through their state’s Medicaid agency or through the Health Insurance Marketplace. The process typically involves providing documentation about one’s financial situation, family size, and any other factors relevant to determining eligibility.

Service Delivery

States can determine how they deliver Medicaid services. Some use a fee-for-service model, where healthcare providers are paid directly for each service rendered. Others use managed care, where Medicaid recipients are enrolled in health plans that receive a set fee per enrollee, making those plans responsible for ensuring enrollees receive the right services.

Costs to Beneficiaries

While Medicaid aims to serve low-income individuals, not all services are necessarily free. Some beneficiaries might have to pay a small part of the cost (known as co-payment) for certain services or medications.

In summary, this is what to consider about Medicaid and how it works.

What Are the Parts of Medicaid? 

Medicaid, as a comprehensive health coverage program, encompasses a range of services and components. While the term “parts” is more frequently associated with Medicare, Medicaid does have distinct service categories and benefit packages. 

Let’s delve into the primary areas and services that Medicaid covers.

Mandatory Benefits

These are services that all Medicaid programs, regardless of the state, must provide to beneficiaries. They include:

  • Inpatient and outpatient hospital services
  • Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services for individuals under 21
  • Doctor services
  • Home health services for those eligible for skilled-nursing services
  • Nursing facility services for adults
  • Family planning services and supplies
  • Rural health clinic and Federally Qualified Health Center (FQHC) services
  • Laboratory and X-ray services
  • Nurse Midwife and Certified Pediatric and Family Nurse Practitioner services
  • Transportation to medical care
  • Tobacco cessation counseling for pregnant women

Optional Benefits

States have the discretion to include these services in their Medicaid programs. While many states do opt to provide these benefits, the exact offerings can vary. Optional benefits include

  • Prescription drugs
  • Physical therapy
  • Occupational therapy
  • Speech, hearing, and language disorder services
  • Respiratory care services
  • Podiatry services
  • Optometry services
  • Dental services
  • Chiropractic services
  • Private duty nursing services
  • Clinic services beyond those in rural health clinics or FQHCs
  • Personal care
  • Hospice
  • Case management
  • Services for individuals with chronic mental illness

Long-Term Services and Supports (LTSS)

These services assist individuals, especially elderly adults and those with disabilities, with routine daily activities. LTSS can be provided in homes, community settings, or institutional settings like nursing homes. They include:

  • Home and Community-Based Services (HCBS): These allow individuals to receive services in their own home or community instead of institutions.
  • Institutional Care: Services provided in nursing facilities, intermediate care facilities, and psychiatric residential treatment facilities.

Managed Care

Many states use managed care to deliver Medicaid services, enrolling beneficiaries in managed care plans. In this model, states contract with private insurance companies, which are then responsible for providing and coordinating Medicaid services.

Special Programs

Medicaid also includes specific programs or waivers designed to meet the unique needs of certain populations or to test new service delivery models. Examples include the Program of All-Inclusive Care for the Elderly (PACE) or Home and Community-Based Services (HCBS) waivers.

In essence, Medicaid is a vast and varied program, ensuring that beneficiaries across different states and needs can access essential health services. However, the specific “parts” or services available can differ by state, so individuals are encouraged to check with their state’s Medicaid program to understand the full scope of benefits available to them.

What Does Medicaid Cover?

Medicaid covers a lot of things and varies based on the needs of the recipient. We list some of the things that Medicaid covers below.

  • Hospital Services: Medicaid covers both inpatient and outpatient hospital services. This means that stays in the hospital, as well as services like surgeries, laboratory tests, and X-rays provided in a hospital outpatient department, are covered.
  • Physician Services: This includes visits to a doctor’s office, preventive care, vaccinations, medical procedures, and surgeries.
  • Early and Periodic Screening, Diagnostic, and Treatment (EPSDT): For individuals under 21, Medicaid provides a comprehensive set of screenings, diagnostic services, and treatments to ensure that children and adolescents receive appropriate care.
  • Laboratory and X-ray Services: Diagnostic services such as blood tests and X-rays are covered.
  • Nursing Facility Services: Medicaid covers services provided in licensed and certified nursing facilities, offering both short-term rehabilitative stays and long-term care.
  • Home Health Services: For individuals eligible for nursing facility services, Medicaid will also cover necessary home health services, including part-time nursing, home health aide services, and medical supplies and equipment.
  • Family Planning Services: This encompasses consultations, pharmaceutical supplies, and procedures to prevent or delay pregnancy.
  • Clinic Services: Services provided in an outpatient clinic setting are covered, including preventive, diagnostic, therapeutic, rehabilitative, or palliative services.
  • Prescription Drugs: While prescription drug coverage is optional, all states currently offer it. Each state has its own list of covered drugs and may require co-payments.
  • Mental Health and Substance Use Disorder Services: Medicaid covers a broad range of services to address mental health and substance use disorders, including inpatient and outpatient services, counseling, therapy, and medication.
  • Long-Term Services and Supports: These can range from home and community-based services that allow individuals to live independently in their communities, to institutional care in nursing facilities.
  • Preventive Services: Screenings, vaccines, and early detection services are covered, including mammograms, colonoscopies, and flu shots.
  • Dental Services: While adult dental coverage is optional and varies by state, Medicaid requires coverage for dental services for children.
  • Transportation: Non-emergency transportation to and from medical appointments is covered for individuals who have no other means of transportation.
  • Other Services: Depending on the state, Medicaid might also cover services like physical therapy, occupational therapy, speech therapy, optometry, chiropractic services, and more.

It’s essential to note that while Medicaid covers a wide array of services, some might require a small co-payment, or there may be restrictions on the number of visits or days of coverage. Beneficiaries should check with their state’s Medicaid program or their managed care plan for specifics on covered services and any associated costs.

Is Alcoholism Covered by Medicaid? 

Yes, Medicaid does cover services related to alcoholism and substance use disorders (SUD). Recognizing the significant public health challenges posed by alcoholism and other substance use disorders, the federal government has set guidelines to ensure that Medicaid beneficiaries have access to necessary treatments.

What Types of Alcohol Rehab Does Medicaid Cover?

While the exact scope and nature of coverage can vary by state, Medicaid generally covers a wide range of alcoholism-related services. We list some of the treatments that Medicaid covers below.

These are only some of the programs covered by Medicaid. Depending on your state and level of alcoholism, your results may vary.

Can Medicaid Be Used in Any County? 

No, Medicaid is a U.S. program and is generally limited to services provided within the United States and its territories. Medicaid does not typically cover medical services obtained outside of the country. However, there are limited exceptions in some border areas. For example, certain Medicaid beneficiaries living near the Canadian or Mexican borders might receive coverage for specific treatments or services in those countries if it’s more accessible or cost-effective than receiving care within the U.S.

Are Medicare and Medicaid the Same? 

Established as a federal initiative, Medicare primarily caters to seniors aged 65 and over. However, it also extends its coverage to some younger individuals who have particular disabilities or conditions. For instance, those with end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS) can be eligible for Medicare. The program is chiefly funded by the federal government and has several parts — Part A (Hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage), and Part D (Prescription Drug Coverage).

On the other hand, Medicaid is a combined effort of both state and federal governments, designed to provide health coverage to low-income individuals, including families, pregnant women, elderly adults, and people with disabilities. The specific criteria and benefits of Medicaid can vary considerably from one state to another since states have flexibility in designing their Medicaid programs within federal guidelines. Funding for Medicaid is shared between the state and the federal government.

Is Medicaid a Federal Program? 

Medicaid is a joint federal and state program, not exclusively federal. It was established to provide health coverage to low-income individuals, including families, pregnant women, elderly adults, and people with disabilities. While the federal government sets broad guidelines for the program, states have the flexibility to design their own Medicaid programs within those guidelines. This means that the specifics of Medicaid — including eligibility, benefits, and administration — can vary significantly from state to state.

The funding for Medicaid is also shared: both the federal government and each state contribute to the program’s costs. The federal government provides a matching rate to states based on a formula, which takes into account the average per capita income of each state relative to the national average. The lower a state’s per capita income, the higher the federal matching rate.

What Are Medicaid’s Coverage Restrictions for Alcoholism?

While Medicaid covers services related to alcoholism, there might be limitations based on the state’s Medicaid plan. For example, some states might have a limit on the number of counseling sessions or days of inpatient care covered per year. Therefore, make sure you check with your provider before making any commitments.

Get Help for Alcoholism Today!

Are you or a loved one seeking assistance with Medicaid or exploring your health coverage options? Don’t navigate the complexities alone. Contact our team at today. We’re here to help guide you every step of the way, ensuring you make the best choices for your health and well-being. Reach out now and take the first step toward a healthier future.