Drug overdose deaths—63,632 in our country in 2016—now outnumber any other cause of accidental death. Fingers of blame point in many directions, with multiple proposals for federal government involvement in fighting the opioid epidemic.
But what if one of the contributing causes of the epidemic is well-intentioned federal spending?
Your federal tax dollars allowed Ramphis Pacheco of Meriden, Conn., to illegally obtain and traffic more than 6,000 oxycodone pills worth $185,400. His 2014 scheme depended on the fact that Medicaid beneficiaries can get large amounts of opioids for free or at little cost.
Pacheco recruited Medicaid beneficiaries, investigators said, by paying them to fill multiple opioid prescriptions. Beneficiaries then sold the drugs to Pacheco, who resold the drugs to illegal users. Pacheco paid beneficiaries approximately $50 to fill a prescription. He could sell a bottle of oxycodone for more than $3,000. Beneficiaries paid nothing for the drugs, and since their prescriptions and Medicaid cards were genuine, most pharmacies weren’t suspicious.
“Medicaid is what allowed (Pacheco) to make so much money with so little risk,” a police detective told my investigators.
Lawmakers never intended this, but I’m guessing there will be many who will not want to acknowledge it.
Why? Because Obamacare included a large-scale expansion of Medicaid. During the 2017 debate on repealing and replacing Obamacare, proponents of expansion cited its role in funding treatment for addiction. This argument became conventional wisdom: “Public appreciation for (Medicaid) has steadily increased as people come to understand … its central role in combating the opioid epidemic,” as the New York Times put it last month.
But that’s not the whole story. Writing in Commentary last February (http://bit.ly/2ljkQe3), demographer Nicholas Eberstadt described the plight of prime working-age male labor-force dropouts, about 7 million men in all. Nearly half take pain medication on a daily basis, according to a study by Alan Krueger, former chairman of President Obama’s Council of Economic Advisers.
How do so many non-working men afford daily pain medication? Eberstadt notes that as of 2013, 53 percent of prime working-age Americans not in the labor force were on Medicaid. “Means-tested benefits cannot support a lavish lifestyle,” Eberstadt writes. “But they can offer a permanent alternative to paid employment, and for growing numbers of American men, they do.”
Eberstadt also explains how. He quotes journalist Sam Quinones’ “Dreamland,” an account of the opioid epidemic’s tragic toll. “For a three-dollar Medicaid co-pay … addicts got pills priced at thousands of dollars, with the difference paid for by U.S. and state taxpayers. A user could turn around and sell those pills, obtained for that three-dollar co-pay, for as much as ten thousand dollars on the street.”
When I read this, I asked my staff to investigate. Within four days, they found 261 examples in six states of individuals convicted of diverting Medicaid-obtained painkillers, which often were sold on the street at enormous profit. This week I am releasing our investigative report that documents more than 1,000 examples of how federal spending intended to help solve the opioid epidemic is being used to fund it.
This should surprise no one. Obtaining employer-provided health insurance is a primary reason for seeking employment. This is why the Congressional Budget Office predicted Americans would do less paid work once Obamacare was implemented, the equivalent of 2 million fewer full-time workers. Give individuals free health care plus the ability to obtain products they can sell for thousands of dollars, and you’ve enabled a new non-working lifestyle.
This is not theory, as our report illustrates, and the dollars involved are not trivial, as Pacheco’s case shows. A one-month prescription of a painkiller might contain 90 pills at 30 mg each. Pacheco was selling such pills for about $30 each, and some drugs can sell as high as $80 a pill. That’s as much as $7,200 per month, or $86,400 per year. The report is replete with examples, from small-time diversions to dishonest prescribers to larger criminal enterprises like Pacheco’s. The common element is that Medicaid spending, which has risen 48 percent since 2013, made the drugs easier to obtain and extremely inexpensive.
Far from being an aberration, the examples in our report represent only the tip of the proverbial iceberg, given that a relatively small percentage of crimes are ever prosecuted. No one knows exactly how prevalent this illicit activity is, or how much it costs American taxpayers.
Our report does not argue that federal spending is the primary cause of overdose deaths, nor do we deny that it benefits millions of Americans. But our report does provide solid evidence that federal spending is also funding the opioid epidemic that is killing thousands. That is a reality we should not deny.