As the Trump administration pushes forward with budget bills, the debate around Medicaid expenses has intensified lately.
House Republicans have tasked the House Committee on Energy and Commerce with cutting spending by $880 billion over the next ten years, with a significant chunk—93%—of that budget tied to Medicaid.
This situation has sparked controversy about the necessary funding for the federal Medicaid program, which provides health services to over 70 million Americans. Some contend that there’s substantial waste within the system, while others warn that cuts could leave millions of vulnerable individuals without access to healthcare.
Experts are weighing in on this divisive issue as lawmakers consider whether there are alternative methods to reduce Medicaid costs.
Individuals enrolled in Medicaid with substance use disorders incur notably higher healthcare expenses compared to those without these disorders—about $1,200 versus $550 a month, according to KFF.
Roughly 7.2% of Medicaid recipients aged 12 to 64 have a diagnosed substance use disorder, and effective treatment is essential to prevent overdose, death, and other health complications.
So, is addressing substance use disorders a viable way to lower Medicaid expenses? That was the crux of my conversation with the experts.
Why are Medicaid costs high for people with substance use disorders?
The higher costs associated with Medicaid enrollees who have substance use disorders can be attributed to their often multiple health complications, as noted by Dr. Joshua Lynch, a professor at the University at Buffalo. These could include physical issues like high blood pressure and diabetes, alongside mental health disorders, which complicate medical needs.
People facing substance use challenges typically encounter fragmented care and struggle to access quality, cost-effective healthcare and preventive services. This, in turn, can lead to a heavier reliance on expensive health services.
Moreover, many individuals with these disorders remain undiagnosed, according to Brendan Saloner from Johns Hopkins University. It’s generally better to engage in proactive treatment rather than wait until issues like overdose arise.
So, yes, the higher costs faced by these individuals often reflect severe physical consequences of substance use—overdose risks, chronic diseases, and the potential for infectious diseases, as Heidi Allen from Columbia University pointed out.
The social instability tied to substance use disorders—unsafe housing, employment issues, and legal complications—also contributes to heightened costs.
Will addressing substance use disorders reduce Medicaid costs?
Investing in prevention and treatment for substance use disorders is critical. Although it wouldn’t immediately reduce Medicaid costs, there could be long-term economic benefits. Registering more individuals for drug treatment might increase short-term Medicaid enrollments, but it could also yield future savings by improving enrollees’ health.
If patients receive quality treatment and can effectively manage their conditions, they’ll likely need less high-cost healthcare, such as hospital stays and emergency visits, as Lynch indicated.
Addressing comorbidities can lead to better housing stability and employment opportunities, ultimately reducing overall Medicaid expenses.
Kelly, another expert, supports this notion, emphasizing that improving early intervention and care coordination can lessen reliance on costly acute services and prevent chronic issues like alcohol-related liver disease and HIV.
Saloner mentioned that while reducing costs is crucial, the complexity of the question remains. Some research suggests that addressing substance use problems may offset various societal costs, yet from a Medicaid budget standpoint, it’s harder to pin down specific savings.
From a health policy perspective, Carrie Fry from Vanderbilt University highlighted that effective treatments for substance use disorders can lower Medicaid expenses. This involves ensuring access to opioid treatment medications like methadone and buprenorphine.
Currently, only about half of Medicaid enrollees with opioid use issues receive evidence-based treatment annually. Thus, treatment is a vital step in alleviating the burden of substance use on Medicaid and can help prevent further expenses down the line.
Finally, addressing the broader societal factors that increase the risk of substance use disorders is necessary for effective prevention—a more holistic approach is needed.
