Insurance Coverage and Provision of Opioid Treatment : Evidence from Medicare

Opioid overdose deaths in older adults have increased substantially over the past two decades. This increase has occurred despite the availability of effective treatments. Methadone, one of just three medications approved by the Food & Drug Administration for opioid use disorder (OUD) treatment, was not covered by Medicare -- the primary insurer of older Americans -- for OUD until 2020. We study the response of opioid treatment programs (OTPs), the only healthcare providers that can dispense methadone for OUD in the U.S., to this landmark policy change using administrative data and a difference--in--differences framework. We examine two outcomes: provider acceptance of Medicare payment and the number of treatment episodes, before and after the policy change, in OTPs relative to other substance use disorder treatment facilities. Our findings show a surge in Medicare acceptance by OTPs and an increase in the number of treatment episodes post-policy. We also test for potential spillovers of the Medicare policy change to other insurance markets, provision of charity care, and service offerings