The opioid epidemic is skyrocketing private insurance costs

The opioid epidemic has caused thousands of deaths, broken apart countless families, and endangered untold babies and children. It’s also taking a heavy economic toll.

Private insurance is footing a large part of the bill for the opioid epidemic. But much of the existing information on private insurance costs has been limited, either because it didn’t include a large enough sample of private insurers or because it didn’t delve deeply enough into the specific services and price tags.

My organization, FAIR Health, owns and continuously updates a database of more than 21 billion claims from privately insured individuals. In a recent white paper, we analyzed the rising ocean of privately billed claims associated with opioid abuse, dependence, and overdoses. Since then, we’ve launched a glass-bottom boat on that ocean to further explore key issues such as the costs of treating the rising population of patients receiving opioid-related diagnoses and the specific services that contribute most to those costs. Here are a few highlights from our latest report, titled “The Impact of the Opioid Crisis on the Healthcare System.”

Aggregated across the nation, professional charges for services for patients with diagnoses of opioid abuse or dependence rose more than tenfold from 2011 ($72 million) to 2015 ($722 million). We estimated that allowed amounts (the maximum amount an insurer will pay for a covered health care service) grew more than thirteenfold during the same period, from $32 million in 2011 to $446 million in 2015. (A summary infographic of the findings is below.)

Treating opioid abuse and dependence is expensive. In 2015, the average annual per-patient charges and estimated allowed amounts were more than five times higher for patients with diagnoses of opioid abuse or dependence than for those with any diagnosis. On average, private insurers and employers providing self-funded plans paid nearly $16,000 more per patient for those with diagnoses of opioid abuse or dependence than for those with any diagnosis.

Our analyses revealed some significant differences between charges for individuals with opioid abuse and those for individuals with opioid dependence. Opioid abuse, generally considered to be a less-severe problem than opioid dependence, requires only one symptom in a year for a diagnosis (such as continued opioid use despite recurrent social problems caused or worsened by opioids), while opioid dependence requires three or more symptoms in a year. Between 2011 and 2014, emergency room visits were the costliest charges for patients with opioid abuse. Among patients with opioid dependence, who are more likely to be treated in substance abuse programs than in emergency departments, drug screening tests (which are common in substance abuse treatment programs) were the costliest charges.

Charges for services associated with opioid abuse and dependence diagnoses vary widely across the nation, from an average per-service charge of $45 in Rhode Island to $263 in Iowa. At least part of the difference is that, in the states with lower charges, the most common services are less expensive ones, such as methadone administration. In the states with higher charges, the most common services are more expensive ones, such as office visits, drug screens, and naloxone.

The increase in services for patients with opioid abuse or dependence diagnoses and the burgeoning cost for them affects our entire society and will likely require responses on various fronts. Medical schools, for example, may need to adjust their curricula to provide future physicians with the skills needed to prevent, recognize, and treat opioid abuse and dependence. Insurers may need to diversify or increase the number of providers in their networks to ensure sufficient access to treatment for opioid abuse and dependence.

The findings in our new white paper will, we hope, help insurers, providers, legislators, educators, and policymakers make the best decisions possible.

Robin Gelburd is president of FAIR Health, a national, independent nonprofit organization dedicated to bringing transparency to health care costs and health insurance information.

FAIR Health breakdown of the costs of the opioid crisis