Simulated impact of medicaid expansion on the economic burden of opioid use disorder in North Carolina

Abstract

Background: Opioid use disorder (OUD) imposes significant costs on state and local governments. Medicaid expansion may lead to a reduction in the cost burden of OUD to the state. Methods: We estimated the health care, criminal justice and child welfare costs, and tax revenue losses, attributable to OUD and borne by the state of North Carolina in 2022, and then estimated changes in the same domains following Medicaid expansion in North Carolina (adopted in December 2023). Analyses used existing literature on the national and state-level costs attributable to OUD to estimate individual-level health care, criminal justice, and child welfare system costs, and lost tax revenues. We combined Individual-level costs and prevalence estimates to estimate costs borne by the state before Medicaid expansion. Changes in costs after expansion were computed based on a) medication for opioid use disorder (MOUD) access for new enrollees and b) shifting of responsibility for some health care costs from the state to the federal government. Monte Carlo simulation accounted for the impact of parameter uncertainty. Dollar estimates are from the 2022 price year, and costs following the first year were discounted at 3 %. Results: In 2022, North Carolina incurred costs of $749 million (95 % credible interval [CI]: $305 M -$1,526 M) associated with OUD (53 % in health care, 36 % in criminal justice, 7 % in lost tax revenue, and 4 % in child welfare costs). Expanding Medicaid lowered the cost burden of OUD incurred by the state. The state was predicted to save an estimated $72 million per year (95 % CI: $6 M -$241 M) for the first two years and $30 million per year (95 % CI:-$28 M -$176 M) in subsequent years. Over five years, savings totaled $224 million (95 % CI:-$47 M -$949 M). Conclusion: Medicaid expansion has the potential to decrease the burden of OUD in North Carolina, and policymakers should expedite its implementation.