Medicaid Cuts Will Worsen the Overdose Epidemic

Editor: Patti Boozang, Amanda Eisenberg and Ashley Traube
Author: John O’Brien

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tl;dr

• Approximately one in five Medicaid enrollees have substance use disorder (SUD), a condition often marked by co-morbidities with other chronic mental and physical health issues, making their care more complex and resource intensive.

• Medicaid expansion has significantly improved access to comprehensive SUD treatment, including medication-assisted treatment (MAT), inpatient, outpatient, and residential care, telehealth services, and peer support, especially in states heavily impacted by the overdose epidemic.

• Proposed changes to Medicaid eligibility under the One Big Beautiful Bill Act threaten significant coverage losses across the entire expansion population and are poised to reverse recent progress on overdose prevention and SUD care. The CDC reported 27% fewer overdose deaths in 2024 compared to the previous year, an indicator that coverage and access to SUD care save lives.

• At the very least, members of Congress should amend the bill to give states flexibility to exempt people with SUD (not just those in SUD treatment) entirely from work requirements and from the six-month coverage redetermination requirement. Indeed, states need flexibility to exempt any high-need populations who are most vulnerable to losing coverage and care because of the bill’s new constraints on eligibility.

The 80 Million Impact

The overdose epidemic has become one of the biggest health care crises of the 21^st century, killing nearly 750,000 people, per the Centers for Disease Control and Prevention (CDC). But with the advent Medicaid expansion, more people have been able to access a variety of treatment options, especially in underserved areas that have been heavily affected by the opioid overdose epidemic in states like Kentucky, Maine, New Mexico, Ohio and West Virginia. Expanded access to SUD treatment didn’t stop with the Covid-19 pandemic, an event that created significant economic turmoil and mental health stress. Emergency telehealth expansion in response to the pandemic allowed providers to prescribe medications like buprenorphine over the phone, ensuring more people didn’t relapse when their regular care seeking patterns and provider access were disrupted.

As the One Big Beautiful Bill Act continues to advance in Congress, and the just released Senate bill language reflects a shocking increase to the already deep Medicaid cuts in the House bill, it is essential to amplify the deleterious effects of the act, if passed, on Medicaid enrollees with SUD — a population that tends to be male, white and over 25 years old. Some of the expected impacts of the bill that would undermine the national response to the overdose crisis and other pressing public health challenges, include:

• Significant coverage losses in the Medicaid expansion group related to work requirements and six-month eligibility redetermination requirements (both high hurdles to keeping coverage for people with SUD)

• Steep Medicaid funding cuts likely to reduce access to SUD treatment

• Increased use of costly emergency departments (EDs) and a greater burden of uncompensated care triggered by widespread Medicaid coverage loss

• Poorer health outcomes, including more deaths by suicide and overdose

The bill’s “work requirement” provision requires states to condition Medicaid eligibility for individuals ages 19-64 applying for coverage or enrolled in the ACA expansion group on working or participating in qualifying activities for at least 80 hours per month. While most people with Medicaid benefits work, this directive will prompt millions to lose coverage, partially due to confusion around paperwork and reporting requirements. States are expected to implement the provision, which exempts incarcerated individuals and those 90 days post-reentry, by Dec. 31, 2026. People with SUD who are participating in drug treatment are also exempt from work requirements.

Importantly, having a SUD is not sufficient to qualify for the exemption; an applicant or enrollee must be participating in treatment to be exempt from work. Most individuals with a SUD are not participating in treatment, especially as new applicants to Medicaid. The legislation would also require individuals with SUD to provide proof they are exempt, such as requiring supporting documentation from their providers of their participation in treatment.

It’s not just the enrollees who will be impacted by this requirement. Providers will need to submit or provide exemption information on behalf of their patients to Medicaid agencies. The additional administrative burden will be challenging for providers and create more opportunities for coverage losses.

There are other requirements of the bill that will jettison people from coverage and undermine progress in overdose reduction and SUD treatment. The One Big Beautiful Bill Act would require states to renew eligibility for Medicaid expansions enrollees more frequently than they do today — every six months starting October 2027, instead of every 12 months. Frequent redeterminations are a well-documented cause of people losing coverage for “administrative reasons” — because they don’t have the paperwork or the wherewithal to navigate renewal red tape. Individuals with SUD are often most challenged in completing the necessary paperwork and “touchpoints” with their state Medicaid agency necessary to renew coverage. If the bill passes, people with SUD, including those in treatment, will have to navigate those processes twice as often as they do today, compounding the coverage losses generated by the work requirement mandate.

This dynamic will cast people and providers back to the pre-Medicaid expansion era of SUD treatment. As their patients lose Medicaid coverage, providers will be forced to end treatment unless they are able to identify an alternative source of funding (e.g., philanthropy or state grant funding).

The overdose rate will once again climb, and people will die or be treated in the ED or inpatient setting — the costliest care settings. The average cost of an ED visit for someone who overdosed is $1,700, and the average cost for an inpatient stay is $9,000, according to a 2021 article published in the National Library of Medicine.

Beyond the financial cost, the human cost is immense. Relapse is a significant factor in overdoses, as people with SUD have lowered their drug tolerance during treatment. Individuals who lose access to their coverage and their SUD treatment in fast succession will be at higher risk for overdose. They will be more likely to delay care for their physical health and mental health conditions — leading to untreated SUD and other poor health outcomes. With unmanaged SUD and other health conditions, they will also be more likely to face long-term and persistent challenges finding and keeping a job — the antithesis of the stated policy goal of the work requirement mandate.

The Bottom Line

About four in five Americans believe that SUD treatment should be readily available and accessible to all, per a recent Legal Action Center poll. The Medicaid proposals in the One Big Beautiful Bill Act designed to cut Medicaid costs to the federal government are “savers” because they will result in millions of people losing Medicaid coverage. These proposals will harm people with SUD and others with serious and chronic health conditions who are most vulnerable to getting tangled in government red tape, causing them to lose coverage and access to treatment, thereby increasing risk of overdose and death. These proposals also shift the financial burden of treatment to health care providers and states. Despite these risks, it would seem that the passage of these proposals is all but inevitable at this point. At the very least, members of Congress should amend the bill to give states flexibility to exempt people with SUD (not just those in SUD treatment) entirely from work requirements and from the six-month coverage redetermination requirement. Indeed, states should have flexibility to exempt any high-need populations who are vulnerable to losing coverage and care because of the bill’s new constraints on eligibility.

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