Insurance coverage and provision of opioid disorder treatment: Evidence from Medicare

Older adult opioid overdose deaths have increased over the past two decades in the United States. Methadone, one of three medications approved 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 the treatment of OUD in the U.S., to this policy change using administrative data and a difference-in-differences framework. We find an increase in Medicare acceptance by OTPs and in the number of methadone treatment episodes post-policy. Further, we document spillovers to other insurance markets and changes in (non-methadone) treatment services offered by OTPs, suggesting that Medicare's entrance into this market has implications for all OUD patients receiving methadone treatment in OTPs.