How Rising Addiction Rates Affect the US Economy | Futures of Palm Beach
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How Rising Addiction Rates Affect the US Economy

How Rising Addiction Rates Affect the U.S. Economy

The debate over rising addiction rates and how it affects America’s economy is ongoing and a point of contention for many. There is no denying the great expense at which treatment for substance abuse and its side effects come. Whether it’s the rising addiction rates or number of people on Medicaid combined with the unregulated cost of treatment, or the price of treating emergency department patients, the economy stands to bear a great portion of the fiscal burden associated with substance abuse and addiction. In 2011, 49 percent of the 5.1 million drug-related emergency department visits in America were due to drug misuse and abuse, while 45 percent were due to adverse effects stemming from drug use.[1]

Addiction in the Workplace

drug_testing_costWhile a lot of employers will foot the bill for drug and alcohol screenings prior to hiring someone, a great many still do not. Among adult substance abusers, 66 percent are employed.[2] In fact, 40 percent of employers don’t utilize pre-employment drug screening, and 64 percent don’t test their employees any time after hiring them.[3]

Even for those employers that do opt for drug testing as part of their hiring process, there is no guarantee that someone who passes a substance abuse screening won’t engage in substance abuse down the road. In addition, some applicants may take extensive measures to ensure that they pass a drug test, such as commercial system cleanses and abstaining from substance abuse just long enough to take the test. Nonetheless, even for those who do screen present employees, the practice is generally randomized and may be ineffective. The odds of being chosen for screening are slim for most, especially in larger companies, which make up the majority of those who use the testing system. Thus, some people take their chances with using anyway, and many do not get caught.

Companies can screen their employees and spare themselves the trouble of hiring — and often later firing — lackluster workers. The cost comes at less than $30 per test for 39 percent of respondents in one survey, $31-$40 for 24 percent of employers, $41-$50 for 19 percent, and over $50 per test for the remainder.[4] In the end, it costs the employer more to process the hiring of a new employee and later lose them than it does to screen them in the first place. Displaced costs in the private and public employment sectors add up across the board to a great loss. Between 2002 and 2004, 16.3 percent of full-time employees who were presently using drugs skipped one or more days of work, in comparison to only 8.2 percent of non-drug users.[5]

What Is Addiction?

Per Psychology Today, “Addiction is a condition that results when a person ingests a substance … or engages in an activity … that can be pleasurable but the continued act/use of which becomes compulsive and interferes with ordinary life responsibilities, such as work, relationships, or health.”[6] Nationwide, around 23.1 million people were addicted to drugs and/or alcohol in 2012.[7] The symptoms of addiction can vary from one person to the next and may be different depending on what substance they are abusing. That being said, most people who exhibit the following signs meet the criteria for substance dependency.

  • Tolerance
  • Withdrawal when abstaining for too long
  • Lack of interest in activities once enjoyed
  • Failure to cut back after attempts to do so
  • Ongoing use of drugs or alcohol even when it causes negative issues
  • Obsession with making sure there is a steady supply of the substance in stock

Of the many millions who needed help in 2012 for their substance abuse issues, just 2.5 million received any kind of specialized care.[8] The problem isn’t merely that there is addiction, but that it is growing at a rapid rate.


While the government and private organizations maintain a significant number of resources on the statistics surrounding substance abusers, it would impossible to calculate an exact number of people who are both addicted and using some form of government assistance. One of the easiest forms of government assistance to come by is food stamps. Put into effect in 1964, they serve to provide low-income families with financial assistance for the purchase of groceries. In 2013, the average monthly award amount per person across the United States was $133.07.[9]

Typically, food stamp guidelines are set by the state but enforced by the county in which the beneficiary is resident. In some counties, merely living there and meeting income requirements can qualify one for food stamps. In some areas, the individual doesn’t have to be employed, or even try to seek employment, to qualify. This is mostly true in more rural areas that have limited employment opportunities. Other exceptions to traditional qualifications include giving food stamps to individuals who cannot seek or keep employment due to not having transportation to get to and from work. In rural regions where public transportation is scant, and a recovering addict doesn’t have a vehicle or license, he will automatically qualify to remain unemployed and receive a monetary award for food every month.

vegetablesMuch like addiction rates, the rate at which new cases are building for the Supplement Nutrition Assistance Program is accelerating quickly. While there were 17.2 million cases in the year 2000, there were 47.6 million cases by 2013.[10] Welfare eligibility requirements generally include:

  • Income restrictions
  • Household size
  • Access to other insurance
  • Assets, including savings and checking account balances, second homes, vehicles, and more

medicaid_dollarThe biggest influence addiction has on the American economy may very well be Medicaid. As of April 2014, 65 million people in the nation benefitted from this government-funded health insurance.[11] There are income requirements for Medicaid, and more people on it means more people are living in poverty.The cost of substance abuse treatment is an issue itself for those on Medicaid. One report notes “at least 1 of every 5 Medicaid dollars spent on hospital care and 1 in every 5 Medicaid covered hospital days were attributable to substance abuse.”[12] These charges tallied nearly $8 billion in 1994.[13] In totality in 2007, illegal drug use and abuse cost the US economy around $174 billion.[14]

There is hope that the recent implementation of the Affordable Care Act will halt the increase in substance abuse in America, but even if it does, it won’t happen overnight. All insurance plans under the ACA are now required to offer substance abuse and mental health treatment coverage. This will make a significant impact on the 50 percent of people with severe mental health disorders who are also substance abusers.[15] Since the ACA was put into place, more than 11 million people who were uninsured before no longer are.[16]


While unemployment serves as yet another way to end up on welfare, many will keep jobs long enough to seek some kind of unemployment insurance. State guidelines stipulate how long someone must be working in a current position before they can collect unemployment benefits — as few as three months in some states. Individuals who are fired or voluntarily quit their jobs are not eligible for unemployment insurance in most cases.

By February 2015, 31.1 percent of individuals collecting unemployment in the US had been without employment for 27 weeks or longer.[17] In 2008, the Obama administration enacted extensions for unemployment insurance, from which almost 24 million people benefitted.[18]


Drug crime is another costly measure that takes away from the American economy on a regular basis. Incarcerating inmates, the price tag of judicial proceedings and fees for legal aid add up to a hefty sum. The cost of illegal drugs to society is estimated at around $181 billion, alcohol at $185 billion and tobacco at $193 billion per year.[19]

The Cost of Treatment

society_costThe monetary cost of treating a substance abuser can be — and often is — a lifelong ordeal. The price tag for a full course of treatment varies considerably from one facility to the next. That may be a big part of the problem. Much like the rest of the medical industry, medical providers are free to charge whatever they want for procedures and services rendered to patients.

Treating Economic Crisis

financial-stressTo many, the fiscal battle against substance abuse feels like a losing situation. While treatment comes at a substantial price, those who don’t get help likely end up on government assistance. They probably won’t hold a job for very long or maintain a stable family life. These are merely the consequences of a lifestyle that includes drug or alcohol abuse.

In the future, increased access to substance abuse treatment through the Affordable Care Act may very well change the scope of treatment and likewise, the impact addiction has on the economy.


[1]Highlights of the 2011 Drug Abuse Warning Network (DAWN) Findings on Drug-Related Emergency Department Visits.” (2013 February 22). Substance Abuse and Mental Health Services Administration. Accessed March 23, 2015.

[2]Think the Cost of Drug Testing is Too High? Think Again.” (2012 February 6). HireRight. Accessed March 24, 2015.

[3] Ibid.

[4] Ibid.

[5]How Illicit Drug Use Affects Business and the Economy.” (n.d.). Office of National Drug Control Policy. Accessed March 24, 2015.

[6]Addiction.” (n.d.). Psychology Today. Accessed March 24, 2015.

[7]Prevention of Substance Abuse and Mental Illness.” (n.d.). Substance Abuse and Mental Health Services Administration. Accessed March 24, 2015.

[8] Ibid.

[9]Average Monthly Food Stamp Benefits Per Person.” (n.d.). The Henry J. Kaiser Family Foundation. Accessed March 24, 2015.

[10] Riley, J.L. (2015 March 24). “The Next Welfare Reform: Food Stamps.” The Wall Street Journal. Accessed March 24, 2015.

[11] Radnofsky, L. (2014 June 4). “How Many People Got Medicaid from Obamacare? It’s Complicated.” Washington Wire. Accessed March 25, 2015.

[12]The Cost of Substance Abuse to America’s Healthcare System, Report 1: Medicaid Hospital Costs.” (1993 July). CASA Columbia. Accessed March 24, 2015.

[13] Fox, K., Merrill, J.C., Chang, H.H. & Califano, Jr., J.A. (1995 January). “Estimating the costs of substance abuse to the Medicaid hospital care program.American Journal of Public Health. Accessed March 24, 2015.

[14] Blum, J. (2011 May 26). “Illegal Drug Use Cost U.S. $193 Billion in 2007, Study Says.Bloomberg News. Accessed March 24, 2015.

[15]Mental Illness and Substance Abuse.” (n.d.). National Alliance on Mental Illness. Accessed March 24, 2015.

[16] Alonso-Zaldivar, R. (2015 March 24). “Number of Uninsured Fell By More Than 11 Million Since Passage Of Obamacare, CDC Reports.” Huffington Post. Accessed March 24, 2015.

[17]The Employment Situation – February 2015.” (2015 March 6). Bureau of Labor Statistics. Accessed March 24, 2015.

[18]The Economic Benefits of Extending Unemployment Insurance.” (2013 December). The Council of Economic Advisers and the Department of Labor. Accessed March 24, 2015.

[19]Addiction Science: From Molecules to Managed Care.” (2008 July). National Institute on Drug Abuse. Accessed March 24, 2015.