Last week, the Centers for Disease Control and Prevention (CDC) announced that the number of overdose deaths across the U.S. decreased almost 27% in 2024. While overdose deaths remain unacceptably high, the announcement follows a promising trend that began in 2023 and that responds to a wide set of interventions, championed by both Democrats and Republicans, focused on increased availability of substance use disorder (SUD) prevention and treatment services. The news also came in the midst of the debate surrounding the House Republicans’ reconciliation bill that proposes to cut Medicaid funding by $800 billion. The irony is that, if this bill becomes law, it would threaten the reduction in overdose deaths that we all celebrated last week and will lead, once again, to increased suffering and higher number of deaths associated with substance misuse and overdose.
Medicaid is the single largest payor of SUD services
Medicaid accounts for 21% of all spending for and provides coverage to 14% of all individuals with SUD. Considering that many individuals with SUD are low-income adults who are not eligible for traditional Medicaid coverage, the number of Medicaid beneficiaries with SUD would be significantly higher if the 10 states that have yet to expand Medicaid decided to do so. In fact, during the worst years of the overdose epidemic, Medicaid expansion became a lifeline for the states hardest hit, such as Ohio, West Virginia, Kentucky, and Maine. The effectiveness of Medicaid as a tool to address the overdose epidemic is also related to how comprehensive the program is. All states are required to cover a minimum level of SUD services, but states often cover additional SUD services under several optional categories of benefits or by taking advantage of demonstration opportunities.
Despite being exempt, work requirements will impact Medicaid beneficiaries with SUD
The biggest “savings” from the reconciliation bill would come from cuts in eligibility that apply particularly to Medicaid expansion populations. One way in which the bill would reduce the number of people enrolled in Medicaid is by imposing work requirements. The imposition of these requirements leads to significant reductions in eligibility without actually increasing employment, as proponents claim. The majority of individuals who lose coverage already work or are eligible for an exemption, but are unaware about the requirements or end up caught in a web of administrative red tape and deficient reporting systems that result in unnecessary loss of coverage.
This is precisely what is likely to happen to Medicaid beneficiaries with SUD. The bill includes language exempting individuals with an SUD from work requirements. However, the bill does not define “substance use disorder” or provide additional information about how individuals can demonstrate the presence of an SUD. This is problematic because SUD is not a traditional condition with a well-defined onset, progression, and duration. While there are widely accepted clinical guidelines for diagnosing SUD, it is still subject to clinical interpretation that could make an exemption difficult to implement.
The bill appears to give wide latitude to states in implementing the SUD exemption. Will individuals with SUD be subject to heightened scrutiny or will a letter from any provider documenting the presence of an SUD diagnosis suffice? What happens when an individual is in recovery but requires maintenance treatment to avoid relapse? At what point in the recovery process does an individual lose their exemption? Moreover, while SUDs are evidently chronic conditions, they are still behavioral health conditions, which means that inducing behavioral change is necessary for successful recovery. By tying Medicaid coverage to the presence of an SUD, the policy disincentivizes full recovery based on the fear of losing access to life-saving treatment.
Individuals with SUD will also lose coverage because the system for reporting is inadequate or fails to account for their needs. For example, a high number of Medicaid beneficiaries with SUD are currently experiencing homelessness and are therefore unable to access a computer in order to submit the required documentation. Given the nature of addiction, individuals with SUD may also be struggling with seeking care and unable to obtain a certification from a provider. They may lack transportation to get to their appointments with providers or with their Medicaid offices. They may also be battling stigma and discrimination from providers and state employees.
All of these factors will make the SUD exemption incredibly hard to obtain and will result in work requirements introducing significant coverage losses in states hardest hit by the overdose epidemic. For example, 43% of expansion beneficiaries in Arizona are estimated to lose coverage; of these, only 14% are not working and do not qualify for an exemption. That means that it is likely that a high number of individuals with SUD in the Medicaid expansion will lose coverage despite being eligible for an exemption. That trend repeats itself in other states still struggling with SUD (New Hampshire: 35% will lose coverage, and only 14% do not qualify for an exemption; New Mexico: 31% will lose coverage, and only 9% do not qualify for an exemption; Ohio: 37% will lose coverage, and only 10% do not qualify for an exemption; Pennsylvania: 32% will lose coverage, and only 9% do not qualify for an exemption; West Virginia: 33% will lose coverage, and only 11% do not qualify for an exemption).
Other Medicaid cuts will lead to elimination of coverage for certain SUD services
The reconciliation bill will also likely result in states cutting services that are essential for individuals with SUD. For instance, the bill proposes to severely restrict the use of provider taxes, which help states finance the non-federal share of Medicaid spending. If that state revenue source is curtailed, states will likely consider cutting coverage of services not explicitly mandated by federal law. That could include, for example, coverage for case management for people with SUD, care coordination services, and over-the-counter (OTC) naloxone (which the FDA moved to OTC to facilitate access). The bill also introduces reductions in the share of federal Medicaid spending for states that cover certain immigrant populations, putting states in the impossible position of having to choose between coverage of essential, but optional, services for people with SUD, and coverage for low-income individuals whose only impediment to accessing care is their immigration status.
Do not be fooled: Republicans claim they are cutting waste, fraud, and abuse from Medicaid. The evidence, however, indicates they are really harming low-income individuals with complex medical conditions and whose lives depend on access to treatment, including people with SUD and those at risk of overdose. Millions will lose coverage including many getting SUD treatment. If we are to sustain the recent gains in reducing the burden of the overdose epidemic, we must protect, sustain, and build upon the current levels of Medicaid coverage rather than destroying the program as we know it.
