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The Impact of Proposed Medicaid Cuts on the Opioid Crisis

July 11, 2017

The fight against the opioid epidemic is one of the few issues that enjoys almost unanimous bipartisan support on Capitol Hill. That’s primarily because in every district, in every state, communities are grappling with how to fight a public health crisis that has transcended age, race, and socioeconomic status. The emotional and economic costs of the crisis are hitting hard, as communities feel the impact not only in real dollars but also in opportunity costs.

As pressure escalates for Congress to do something, a disparity has begun to emerge between talk and action. Currently, the opioid epidemic is being fought on many fronts. There is the fight to curb the supply; tightening the border, increasing Custom’s and Border Protection’s funding, bolstering the US Postal Service’s ability to screen international packages using Advanced Electronic Data, and increasing police crackdowns of dealers and suppliers within the US [1]. Then there is a fight to curb demand, a battle requiring nuance, patience, and money [2]. Ultimately, however, no matter how hard law enforcement works, the epidemic will not come to a halt until demand is reduced or eliminated.

To reduce demand, those who are addicted to opiates need to receive the appropriate treatment. That treatment usually comes in the overlap of therapy and medication, and various combinations have proven to be effective [3]. However, these treatment options are usually expensive, and for poorer individuals, their cost poses a steep barrier.Several government programs have been established to subsidize these treatments. The most impactful among them has been the expansion of Medicaid under the Affordable Care Act. Furthermore, that law’s mandate that mental health and substance abuse receive Medicaid coverage has reshaped the treatment landscape. According to Michael Botticelli, the former Director of the White House Office of National Drug Control Policy, “The Affordable Care Act contributed to perhaps the greatest expansion of treatment by ensuring substance use disorder treatment was one of the 10 essential benefits that Medicaid expansion plans and marketplace plans had to cover. It also ensured that those benefits be offered on par with the federal mental health parity and addiction equities gap.”[4] The 21st Century CURES ACT, another crucial piece of legislation recently signed into law, also helps to address many of the mental health issues associated with the epidemic.

 Image: Centers for Medicare and Medicaid Services logo. Source: Wikimedia Commons. Image: Centers for Medicare and Medicaid Services logo. Source: Wikimedia Commons.

Several government programs have been established to subsidize these treatments. The most impactful among them has been the expansion of Medicaid under the Affordable Care Act. Furthermore, that law’s mandate that mental health and substance abuse receive Medicaid coverage has reshaped the treatment landscape. According to Michael Botticelli, the former Director of the White House Office of National Drug Control Policy, “The Affordable Care Act contributed to perhaps the greatest expansion of treatment by ensuring substance use disorder treatment was one of the 10 essential benefits that Medicaid expansion plans and marketplace plans had to cover. It also ensured that those benefits be offered on par with the federal mental health parity and addiction equities gap.”[4] The 21st Century CURES ACT, another crucial piece of legislation recently signed into law, also helps to address many of the mental health issues associated with the epidemic.

According to Rachel Roubein, “In states like West Virginia, Ohio and Alaska, Medicaid pays for between 34 to 50 percent of one form of medication-assisted treatment for substance use disorders. Overall, Medicaid, which helps low-income and disabled people, is the single largest payer for these services.” [5]

Those services are seen by leading experts as vital to the successful pushback of the opioid plague. In a recent testimony to the Senate Homeland Security Subcommittee on Investigations, Dr. Terry Horton said that he is primarily afraid that, “I know how to address this opioid epidemic, I know how to treat the patients that I have who are addicted to heroin and to other drugs. I know how to get them into a safe place, but I’m fearful that…I will lose the tools and the medicines I need to keep them safe. And I’m really fearful that some of the cuts that have been proposed will completely gut the system that I rely on to treat my patients and …help them get to a better place… Don’t take away my ability to treat my patients and keep them safe.” [6]

But the fervidity with which Dr. Horton defended his patient’s access to Medicaid expansion is not shared by all. Republican efforts to “repeal and replace Obamacare”, and pass both the American Health Care Act and a budget slashing Medicaid funding, would stymie efforts to roll back the opioid tide. Without proper funding, states won’t be able to provide addicts with the proper treatment that they need to get into recovery, and ultimately stay there. [7]

Among the most vocal advocates for fighting the opioid epidemic was candidate Donald Trump. Throughout his campaign, Mr. Trump repeatedly attacked the Obama Administration for offering too light of a response to the crisis, while adding that, “It is tragic enough that so many Americans are struggling with life-threatening addiction. We should not compound that tragedy with government policies and bureaucratic rules that make it even harder for them to get help.” [8] But the American Health Care Act, passed by House Republicans and initially praised by President Trump, calls for $800 billion in cuts to Medicaid. Ben Allan of NPR says, “if federal Medicaid money gets cut, that would leave states to either fill in the financial gap, limit access to care or drop some people’s coverage.”[9]

In a Joint Economic Committee hearing on the economic impacts of the opioid crisis, Professor Sir Angus Deaton said that this crisis poses a situation in which the deep opportunity costs in terms of life and work potential lost will span generations. Addiction can start a cycle that leads to broken families, and communities torn apart by low employment and recurring drug use and incarceration. [10]

In the same committee hearing, Dr. Richard Frank described why people suffering from opioid addiction don’t receive treatment. According to Dr. Frank, “The predominant reasons include inability to afford treatment and lack of readiness to seek treatment. For persons suffering from drug use disorders, 36 percent reported that they had no health insurance coverage and could not afford the cost of treatment.” he also added that “it is also the case that traditional Medicaid also serves a critical function in reducing financial barriers to treatment access in a population that is at elevated risk of [Opioid Use Disorders]. The result is that the states that have been hit hardest by the opioid epidemic are using Medicaid to finance a response that aims to expand treatment using the gold standard for care Medication Assisted Treatment. These states rely more heavily on Medicaid than the national average.”[11]

Without that coverage, rural areas will likely be hit the hardest, as care is both expensive and remote in those areas. On average, 11% of a rural hospital’s budget is reliant on Medicaid, and cuts to funding could cause hospitals to close, which in turn would affect local economies, jobs, and health. [12] So while much rhetoric has been devoted to reducing the supply of illegal opiates, reducing the demand is just as, if not more important. To do that, cultural attitudes about how prescription painkillers are initially prescribed need to change, but so too do our attitudes towards Medicaid and other programs that help manage the human cost of this terrible disease. Cutting the social safety net will only deter, rather than advance, our fight. 

Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Penn Wharton Public Policy Initiative’s strategies, recommendations, or opinions.

References

  [1] Stopping the Shipment of Synthetic Opioids: Oversight of U.S. Strategy to Combat Illicit Drugs, 115th Cong. (2017) (testimony of Michael Botticelli, Thomas Synan Jr., Thomas P. Gilson, M.D.,Terry L. Horton, M.D.).

  [2] NIDA. “Principles of Drug Addiction Treatment: A Research-Based Guide (Third Edition).” National Institute on Drug Abuse, 1 Dec. 2012, https://www.drugabuse.gov/publications/principles-drug-addiction-treatment-research-based-guide-third-edition. Accessed 15 Jun. 2017.

  [3] Stopping the Shipment of Synthetic Opioids: Oversight of U.S. Strategy to Combat Illicit Drugs, 115th Cong. (2017) (testimony of Michael Botticelli, Thomas Synan Jr., Thomas P. Gilson, M.D.,Terry L. Horton, M.D.).

  [4] Ibid.

  [5] Roubein, Rachel. “Opioid crisis becomes central issue in debate over Medicaid.” TheHill. May 11, 2017. Accessed June 15, 2017. http://thehill.com/policy/healthcare/332852-opioid-crisis-becomes-central-issue-in-debate-over-medicaid.

  [6] Stopping the Shipment of Synthetic Opioids: Oversight of U.S. Strategy to Combat Illicit Drugs, 115th Cong. (2017) (testimony of Michael Botticelli, Thomas Synan Jr., Thomas P. Gilson, M.D.,Terry L. Horton, M.D.).

  [7] Merica, Dan. “Trump’s plan for Medicaid could hurt the opioid abusers he promised to help.” CNN. March 12, 2017. Accessed June 15, 2017. http://www.cnn.com/2017/03/11/politics/donald-trump-medicaid-cuts-opioids/index.html.

  [8] Trump, Donald J. “Donald J. Trump Remarks at the Cross Insurance Center in Bangor, Maine.” Speech, Cross Insurance Center, Bangor, Maine, October 15, 2016. Accessed June 15, 2017. http://www.presidency.ucsb.edu/ws/index.php?pid=119172.

  [9] Allen, Ben. “GOP’s Proposed Cuts To Medicaid Threaten Treatment For Opioid Addiction.” NPR. June 11, 2017. Accessed June 15, 2017. http://www.npr.org/sections/health-shots/2017/06/11/531214580/gops-proposed-cuts-to-medicaid-threaten-treatment-for-opioid-addiction.

  [10] Joint Economic Committee Hearing on the Economic Aspects of the Opioid Crisis, 115th Cong. (2017) (testimony of Professor Sir Angus Deaton,The Honorable Mike DeWine,Dr. Lisa N. Sacco,Dr. Richard G. Frank).

  [11] Joint Economic Committee Hearing on the Economic Aspects of the Opioid Crisis, 115th Cong. (2017) (testimony of Professor Sir Angus Deaton,The Honorable Mike DeWine,Dr. Lisa N. Sacco,Dr. Richard G. Frank).

  [12] Heinrich, Martin. JEC Minority Staff Report: TrumpCare: Leaving Rural Health Behind. Report. May 2017. Accessed June 16, 2017.

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