Addiction and substance abuse can have devastating effects on people’s lives. Not only does substance addiction impact the addict, but also their loved ones. Addiction can lead to financial ruin, and in some cases, hospitalization. But who pays for addiction hospitalization?

The answer to this question will depend on the addict’s personal financial status and qualifications for financial grants. The type of addiction treatment needed is also important to know. In this blog post, we will explore the financial costs of addiction and the available funding for people with substance use disorders.

Who Pays For Addiction Hospitalization?

What is a common reason for the hospitalization of people with addiction?

Hospitalization is needed for addiction treatment when someone is experiencing a medical emergency due to excessive drug and alcohol use. This might include an overdose, severe withdrawal symptoms, or another health complication from drug use.

Another common reason for hospitalization is when a person’s medical condition has been worsened by their substance abuse. For example, a person with alcohol addiction may be hospitalized to receive treatment for a liver infection. Alternatively, people with addiction may be hospitalized in order to undergo detoxification or drug and alcohol rehab.

Is addiction hospitalization expensive?

Addiction treatment programs in a hospital can be expensive, whether it is inpatient or outpatient treatment. For a person seeking addiction treatment without insurance, it is even more expensive to pay for rehab.

Data from the Substance Abuse and Mental Health Services Administration and a report from the Treatment Advocacy Center show that the average cost of a psychiatric hospital stay in the United States is $200 per day. For someone without insurance, this cost can be prohibitive.

Substance Abuse Statistics in the United States

According to the 2020 National Survey on Drug Use and Health (NSDUH) conducted by the Substance Abuse and Mental Health Services Administration (SAMHSA), almost 60 million people engaged in illicit drug use in 2020. For alcohol addiction, the survey showed that almost 140 million people consumed alcohol in the same period, of which almost 62 million engaged in binge drinking.

Both alcohol and drug abuse can affect a person’s mental health and stability. Based on the data collected by the SAMHSA, one of the factors that contributed to the heightened drug and alcohol use is the COVID-19 pandemic. In the same year, almost 42 million people were seeking treatment for mental health conditions.

What are the financial costs of addiction in the United States?

Substance addiction is a serious problem in the United States. The National Institute on Drug Use estimates that addiction costs the nation more than $600 billion per year. This figure includes the costs of healthcare, lost productivity, criminal justice involvement, and motor vehicle accidents.

Substance abuse treatment centers provide drug and alcohol rehab to addicts and people suffering from a substance use disorder. Aside from helping the addict stop the substance use through addiction rehab programs, these treatment centers also help the person improve their physical and mental health. Although it comes at a price, substance abuse treatment is still the better alternative as compared to harsher and more expensive methods such as incarceration.

National Budget for Addiction Treatment Programs

The United States government is currently prioritizing healthcare for behavioral and mental health issues that may have been caused by substance abuse. A significant part of the national budget for healthcare is allocated for treatment centers that focus on drug rehab and addiction treatment.

Financial Grants

The Substance Abuse and Mental Health Services Administration provides support to substance abuse treatment centers, whether these centers support inpatient rehab or outpatient treatment. In 2021, the administration released financial grants to Community Behavioral Health Clinics. The 100 clinics that received the grant function as treatment centers for substance use disorder and mental health issues. The total amount of the grants reached $250 million.

These clinics provide addiction rehab – drug or alcohol rehab – to people suffering from substance use disorders. The requirement to receive a grant was that these treatment centers had to focus on lower-income and less-funded communities.

Aside from the $250 million, the SAMHSA also released over $54 million for Project AWARE. Project AWARE, which stands for Advancing Wellness and Resilience in Education, focuses on awareness and treatment of mental health issues, especially in the youth.

The SAMHSA’s budget comes from the American Rescue Plan Act (ARP) as well as realigned COVID funds. The end goal of the increased funding is to provide substance abuse treatment programs for people of all ages without prejudice to social status. Treatment programs include inpatient treatment, outpatient treatment, group therapy, residential treatment, and education on substance abuse prevention.

Addiction Treatments and Cost of Rehabilitation

Addiction Treatments and Cost of Rehabilitation

For people seeking addiction treatment, a major factor is the cost of inpatient rehab or outpatient treatment. Not everyone can afford to pay for rehab. The good news is that there are several options such as health insurance coverage – whether private insurance or state-financed health insurance.

The cost of rehabilitation significantly increases with inpatient rehab or hospitalization. A treatment center generally focuses on creating a personalized treatment plan to help an individual suffering from substance abuse.

How can people with addiction pay for hospitalization?

There are several options available to people who need help paying for addiction treatment, both from the public and private sectors. Who pays for addiction hospitalization? Below are the different programs that can help cover the cost of hospitalization and inpatient programs.


Does insurance cover addiction treatment? This is a common question that a lot of people ask. Many medical plans provide some part of addiction treatment while others cover it in full. It should be clearly stated in the health insurance policy if inpatient addiction treatment or intensive outpatient treatment for substance abuse are included in the coverage.

What is hospital indemnity insurance?

Hospital indemnity insurance is a supplemental type of insurance that helps to cover the costs of hospitalization. Think of it as an “add-on” to a basic insurance policy. Thanks to hospital indemnity insurance, addiction hospitalization can be covered with just a minimal expense. Of course, this will depend on the type of insurance that a person has.

State and Local Government Assistance

To answer the question of who pays for addiction hospitalization, the government or public sector also provides assistance. The local health department of each state usually has a budget to help addicts pay for rehab.

State-funded Addiction Treatment

The government provides an annual budget for drug rehab. This budget is not limited to a single treatment center. The budget is usually allotted to provide a free treatment center even for addicts without insurance, although this varies per state.

Currently, however, these free treatment centers do not have a standardized program in all states. Thus, while some programs can cover a comprehensive rehab treatment plan which includes hospitalization, others are limited to outpatient programs and detoxification.

The Substance Abuse and Psychiatry Act aims to provide people who seek treatment with effective outpatient programs. With state-funded substance abuse services, there is no need to worry about how to pay for rehab. Programs such as Medicare and Medicaid, Veterans Affairs, the Affordable Care Act (ACA), and more, all help an addict recover from drug abuse.

What are the benefits of state-funded programs?

State-supported rehabilitation centers are facilities that get federal grants for their services to offer rehabilitation programs, usually connected with jail systems or the courts. Since the budget varies, some treatment facilities lack important amenities, only offering outpatient rehab programs.

State-funded programs are usually focused on low-income communities. These programs decide who is eligible to receive free treatment and who will need to pay a minimal amount.

Affordable Care Act (ACA)

The Affordable Care Act is a health care reform program that requires all Americans to have health insurance. If you do not have insurance, you can get it through the ACA marketplace. The ACA marketplace offers different types of plans, some of which cover addiction treatment partially or in full.


Medicaid serves low-income individuals. Although many hospitals do not accept Medicaid in place of an insurance policy, American Addiction Centers and other treatment facilities nationwide honor the Medicaid program.

Other Private Funding Methods

Addiction hospitalization is expensive. For those well-off, it is not important who pays for addiction hospitalization. However, for people who cannot afford hospitalization or don’t have insurance, there are other private methods available. Some ways to acquire private funding are through crowdfunding and personal loans.

Loans and Financing

Many banks and financial institutes can provide a loan for substance abuse treatment. This will depend on the qualifications of the person applying for the loan.


There are various platforms for raising funds online through donations. A crowdfunding service enables people to reach out to other people around the world for help.


Who pays for addiction hospitalization? Addiction hospitalization can be paid for by personal finances, the government, or private methods. With or without insurance, there is still a way to receive addiction treatment for substance abuse.

Treatment will depend on whether the addict will need outpatient or inpatient treatment. Several state-funded programs such as the ACA, Medicaid, and SAMHSA grants can help an addict get help even when they cannot afford it.

If you or someone you know is struggling with addiction, there are many resources available to help. Don’t let the cost of treatment keep you from getting the help you need.

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