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Society of Actuaries: Economic Cost of the Opioid Crisis

In Whitewater, in the Midwest, and opioid addiction has been personally devastating and economically debilitating. In a recent study, the Society of Actuaries estimates the Economic Impact of Non-Medical
Opioid Use in the United States
:

The estimated costs consist of the following:

• Nearly one-third ($205 billion) of the estimated economic burden of the opioid crisis is attributable to excess health care spending for individuals with OUD, infants born with neonatal abstinence syndrome (NAS) or neonatal opioid withdrawal syndrome (NOWS), and for family members of those with diagnosed OUD.

• Mortality costs accounted for 40% ($253 billion) of the estimated economic impact, predominantly driven by lost lifetime earnings for those who died prematurely due to drug overdoses involving opioids.

• Costs associated with criminal justice activities, including police protection and legal adjudication activities, lost property due to crime, and correctional facility expenditures, totaled $39 billion, roughly 6% of the total cost from 2015 to 2018.

• Costs associated with government-funded child and family assistance programs and education programs contributed another $39 billion over the four-year period.

• Lost productivity costs comprised the remaining 15% of total costs from 2015 through 2018, totaling $96 billion. Lost productivity costs are associated with absenteeism, reduced labor force participation, incarceration for opioid-related crimes, and employer costs for disability and workers’ compensation benefits to employees with OUD.

It is important to recognize who bears these economic burdens. In total, we estimate $186 billion (29%) of the total economic burden of the opioid crisis was borne by federal, state and local governments, while the remainder was borne by the private sector and individuals.

Using the latest available data, we also projected costs for 2019 based on three scenarios reflecting how the opioid crisis may develop. Our midpoint cost estimate for 2019 is $188 billion, with our low and high cost estimates ranging from $172 billion to $214 billion. These cost estimates reflect a range of potential outcomes for key assumptions such as the prevalence of OUD and the number of opioid overdose deaths in 2019 and are intended to represent a reasonable range of scenarios, rather than the minimum or maximum of possible outcomes.

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