Does Medicare Cover Therapy and What Are the Costs?

Medicare is the federal health insurance program for individuals aged 65 or older and certain younger people with disabilities. Its coverage for therapy services can be complex, depending on the type of therapy and specific conditions.

Understanding Medicare Coverage for Therapy

Medicare’s structure divides coverage across several parts, each addressing distinct healthcare needs, including therapy services. Part A, or Hospital Insurance, generally covers therapy received during an inpatient hospital stay. This includes physical, occupational, and speech-language pathology services, provided they are part of a beneficiary’s care plan within the hospital or a skilled nursing facility (SNF). Part A also covers therapy in an SNF after a qualifying hospital stay.

Medicare Part B, or Medical Insurance, is the primary component for outpatient therapy services. It covers medically necessary outpatient mental health services, encompassing visits with psychiatrists, psychologists, clinical social workers, and other licensed therapists. Part B also extends to outpatient physical, occupational, and speech-language pathology services. A doctor’s referral or prescription is required for these services to be covered.

Medicare Part C, known as Medicare Advantage Plans, offers an alternative way to receive Medicare benefits. These plans are provided by private companies approved by Medicare and are legally required to cover at least everything that Original Medicare (Parts A and B) covers. Many Medicare Advantage plans also offer additional benefits, which might include more extensive therapy coverage than Original Medicare. However, these plans operate with their own networks of providers, specific rules, and varied cost-sharing structures.

Medicare Part D focuses exclusively on Prescription Drug Coverage. While it covers prescription medications, including those used for mental health conditions, Part D does not provide coverage for the therapy services themselves. Its role is confined to pharmaceutical costs, complementing the therapy coverage provided by other Medicare parts.

Financial Aspects of Therapy Coverage

For services covered under Medicare Part B, beneficiaries are responsible for an annual deductible, which is $257 in 2025. After meeting this deductible, Medicare typically pays 80% of the Medicare-approved amount for most therapy services, leaving the beneficiary responsible for the remaining 20% coinsurance. This 20% coinsurance applies to each Medicare-approved outpatient therapy service.

Cost-sharing differs between inpatient and outpatient therapy. For therapy received during an inpatient hospital stay, covered by Part A, the beneficiary is subject to a deductible per benefit period, which is $1,676 in 2025. If the hospital stay extends beyond 60 days in a benefit period, a daily coinsurance amount applies, increasing the financial responsibility. In contrast, outpatient therapy falls under Part B’s deductible and 20% coinsurance structure, as previously noted.

Medicare Advantage plans have their own distinct cost-sharing rules, which can vary significantly from Original Medicare. These plans may feature different copayments or coinsurance amounts for therapy services, and some might include an out-of-pocket maximum. Beneficiaries enrolled in a Medicare Advantage plan should review their plan’s Summary of Benefits to understand their specific financial responsibilities. For instance, the maximum out-of-pocket limit for in-network services in Medicare Advantage plans can be up to $9,350 in 2025.

Medigap, also known as Medicare Supplement Insurance, can assist in covering out-of-pocket costs for services covered by Original Medicare. These policies help pay for expenses like deductibles, copayments, and coinsurance that Original Medicare does not cover. Medigap policies are standardized, meaning the benefits for each plan letter (e.g., Plan G, Plan N) are the same across all insurers, though premiums can vary.

Navigating Your Therapy Options

Locating a therapist who accepts Medicare is a practical first step for beneficiaries seeking therapy services. Medicare’s “Physician Compare” tool on Medicare.gov allows individuals to search for and compare clinicians enrolled in Medicare. It is important to confirm that the therapist “accepts assignment,” meaning they agree to accept the Medicare-approved amount as full payment for their services. This helps control out-of-pocket costs.

Many therapy services covered by Medicare Part B require a doctor’s referral or prescription to be eligible for coverage. This medical necessity documentation ensures that the services are appropriate for the beneficiary’s condition and meet Medicare’s guidelines. Without a proper referral, Medicare may deny coverage, leaving the beneficiary responsible for the full cost of the therapy.

For those with a Medicare Advantage plan, contacting the plan directly is advisable before starting therapy. This direct communication allows beneficiaries to confirm coverage details, identify in-network providers, and understand any specific cost-sharing requirements. Each Medicare Advantage plan has unique rules, and verifying these details upfront can prevent unexpected expenses.

If Medicare or a Medicare Advantage plan denies coverage for therapy services, beneficiaries have the right to appeal the decision. The appeal process involves several levels, beginning with a redetermination by a Medicare Administrative Contractor (MAC) for Original Medicare claims. For Medicare Advantage plans, the initial appeal is made directly to the plan. Instructions for appealing are provided on the denial notice, outlining the steps and deadlines for submitting an appeal.