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The tragic opioid epidemic continues to rage in the U.S. Roughly 76 percent of U.S. drug overdose deaths, more than 70,000 people in 2023, are linked to opioids, including heroin and illicit fentanyl. The bill for that calamity—dire enough to justify a global trade war with Canada, Mexico, and China—is falling increasingly on a federal health coverage program that now faces the chopping block.

That program is Medicaid, which in 2023 paid for about 39 percent of the nonfatal emergency department overdoses. That alone helped people in acute distress some 118,000 times in the 26 states that provide data. The total number of people treated for opioid use disorder (OUD) under Medicaid in 2021 was nearly 1.82 million, or 35 percent of all people treated for the disorder in the U.S. More than half, or 930,910 people, became eligible for Medicaid because of the Affordable Care Act’s (ACA) Medicaid expansion.

In February, Congress passed a resolution that will most likely mean $880 billion in reduced federal spending in Medicaid over 10 years. That would reduce its spending by nearly 12 percent over the next 10 years. To provide some context, in 2023, Medicaid spent $616 billion of federal funds, alongside an additional $245 billion in state spending, according to the Centers for Medicare and Medicaid Services (CMS). Widespread cuts to Medicaid enrollments and spending of the kind Congress contemplates, will surely hurt people who rely on the program for treatment of their addictive conditions.

To realize $880 billion in reduced Medicaid spending, Congress is considering imposing work requirements on beneficiaries who do not qualify for Social Security Disability payments, reduced subsidies for states that expanded Medicaid, and reduced federal “matching” spending provided to states. All of which would result in reduced enrollment of people suffering from opioid use disorder and substance use disorders, involving alcohol, cocaine, methamphetamines or other drugs, generally. If that happens, evidence based on lessons from Medicaid expansion shows that fewer people in the expansion population will have healthcare coverage. In fact, it is estimated that if the expansions were eliminated, roughly 65 percent of people in the expansion population would likely end up uninsured. This is especially salient because Medicaid financed care represents such a large share of all the OUD treatments in the country, in large measure because of the Medicaid expansion.

The lesson from the expansion experience is that when people gain coverage, they are more likely to seek treatment for addiction and get treated with lifesaving drugs. Furthermore, people in treatment are less likely to overdose and die than those not in treatment. So dramatic reductions in spending on treatment for OUD will likely result in more overdoses and more deaths consequent to the disorder.

Medicaid expansion has also contributed to the financial health of hospitals, especially those in rural areas of the nation. It led to significantly reduced uncompensated care costs experienced by hospitals. This was found for hospitals overall. More specifically, states that expanded Medicaid experienced large drops in the percentage of emergency department visits for an OUD (frequently for a nonfatal overdose) that were delivered to people without health insurance. Likewise, expansion states experienced a 50 percent drop in the number of opioid-related hospitalizations that were for people without insurance. That improved hospital bottom lines by millions of dollars. Hospital willingness to address substance use issues through targeted programs generally, and for OUD specifically, has been shown to be greater in states that have expanded Medicaid. This willingness is especially important for rural areas, as about 74 percent of rural hospital closures have been in the non-expansion states. Without these funds, a lot more rural hospitals will close.

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