Medicare's blind spot: Coverage for substance use disorders falls short

America’s overdose crisis is often framed as a tragedy of youth and midlife. But a quieter, equally devastating reality is unfolding among older adults. Over the last two decades, the overdose death rate among adults over 65 has quadrupled — an alarming increase. Yet Medicare, the primary insurer for older Americans, fails to cover the full range of evidence-based, lifesaving addiction treatment.

Congress can and must fix this by reintroducing and passing the bipartisan Residential Recovery for Seniors Act.

As of 2023, about 6.4 million Medicare beneficiaries nationwide were living with a substance use disorder. Of these,1.9 million had opioid use disorder, including more than 25,000 beneficiaries in Illinois.

But according to the U.S. Department of Health and Human Services, less than 1 in 5 of all Medicare beneficiaries with opioid use disorder received medication to treat it. In Illinois, the rate was even lower. Disparities widen when other factors, including race, geography and income status, are considered.

This failure stems directly from outdated Medicare policies lagging behind other payers — including Medicaid and many private insurers. It’s beyond time to change this and ensure Medicare covers the full continuum of substance use disorder care.

The American Society of Addiction Medicine defines four levels of care for substance use disorders, ranging from outpatient services to intensive inpatient hospitalization. For years, traditional Medicare covered only the extremes: basic outpatient services (Level 1) and hospital-based inpatient care (Level 4), leaving a dangerous gap in the middle —precisely where many patients need to be treated.

In January 2024, Medicare began covering intensive outpatient programs (Level 2), but non-hospital-based residential treatment (Level 3) is still excluded. Level 3 provides the full range of services clinically necessary for individuals with intensive needs in residential settings that support people’s recovery goals. This level can be both an entry point for people in crisis as well as an important “step down” for patients who no longer need 24/7 care in a hospital setting.

The Residential Recovery for Seniors Act was designed specifically to address this remaining coverage gap. First introduced in 2024 by U.S. Rep. Lauren Underwood, D-Illinois, the bipartisan bill would establish a new Medicare Part A benefit covering residential addiction treatment programs that meet nationally recognized standards. It is cost-effective and supported by detailed budget analysis and health policy research. Lawmakers on both sides of the aisle must build on this important work and reintroduce the bill without delay.

The urgency could not be clearer. Older adults often face unique risk factors for substance use conditions, including chronic pain, social isolation, grief and high rates of prescription drug exposure. They’re also more medically fragile, making timely and appropriate treatment even more essential.

As Medicare fails to cover residential care, individuals are forced to pay out of pocket, often accumulating tens of thousands of dollars in medical debt. Or they forgo the appropriate level of care, only to end up cycling through emergency rooms and hospitals — an approach that’s ineffective at sustaining patients’ recovery and unnecessarily increases their exposure to high-risk environments for infectious disease. It is also far more expensive than planned, evidence-based treatment. Going without care doesn't make substance use disorders go away. It just means people will need more acute, more costly treatment later, when other health conditions are more likely to be exacerbated.

Our seniors deserve better. Congress has an opportunity to correct one of Medicare’s most glaring shortcomings and save lives in the process. Seniors have paid into Medicare their entire working lives, and the Residential Recovery for Seniors Act would make available the full spectrum of lifesaving substance use treatment they need and deserve.

Deborah Steinberg is a senior health policy attorney at the Legal Action Center and leads the Medicare Addiction Parity Project, a specific initiative to expand Medicare's coverage of substance use disorder treatment and apply the Parity Act to Medicare. Gerald (Jud) DeLoss is CEO and chief legal officer of the Illinois Association for Behavioral Health. He practiced health law for 25 years and served as a subject matter expert before Congress, legislative committees and in court proceedings.