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5 Ways the Opioid Crisis is Hurting the U.S. Economy

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On March 6, the CDC released data showing incredible spikes in opioid-related emergency room visits since July 2016: in Wisconsin, they were up 109 percent; in Illinois, up 66 percent; Delaware, 105 percent, Pennsylvania, 81 percent.

These are just some of the devastating numbers behind the growing health crisis. The CDC says 64,000 people died from drug overdose in 2016, roughly three-quarters from opioids alone. That rate has risen fivefold since 1999. For comparison, about 37,000 Americans died in automobile accidents in 2016 and 58,000 died during the entire Vietnam war.

Meanwhile, addiction impacts far more than mortality counts.

About 2.4 million Americans have some kind of opioid-use disorder, including prescription drug abusers of OxyContin and Vicodin and illicit users of heroin and fentanyl. A recent Trump administration report found that when the various costs are piled up — with treatment, lost productivity, judicial procedures — the annual price tag is an estimated $500 billion or 2.8% of GDP — that’s $2,000 per U.S. adult. This is over six times larger than the most recently estimated economic cost of the epidemic.

That includes cost of long-term care, opportunity cost, emergency room visits and many other factors. Those costs include about 45,000 emergency-room visits for opioid patients in 2017, and costs associated with making naloxone, an antidote for overdoses, available.

Understanding the depth of the crisis, and its widespread cost, is critical to attracting the focus it will need to repel it.

The economics of the opioid crisis

1. Opioid addiction is so prevalent, it shows up in unemployment data.

Economists have been struggling to understand the stubbornly low workforce participation rate, particularly among men, for some time. An aging population and other demographic factors explains a lot of the trend, but that explanation seemed incomplete. Princeton’s Alan Krueger filled in the blanks by examining county-level opioid prescription rates and labor participation rates, and discovered that higher prescription rates correlated with higher dropout rates. He estimated that about 20% of the reduced rate among men ages 25-54 can be blamed on opioid use. His research also found that two-thirds of prime-age men who aren’t working take prescription pain medication on a daily basis.

Federal Reserve researchers have found that at least some employers are struggling to find workers because potential employees can’t complete drug screening programs.

“Manufacturing contacts in Louisville and Memphis reported difficulties finding experienced or qualified employees, with some citing candidates’ inability to pass drug tests,” stated the St. Louis Fed in its July 2017 “Beige Book” report on regional economic circumstances.

Former Federal Reserve Chair Janet Yellen addressed the issue directly during a July U.S. Senate hearing.

“I do think it is related to declining labor force participation among prime-age workers,” she said. “I don’t know if it’s causal or if it’s a symptom of long-running economic maladies that have affected these communities and particularly affected workers who have seen their job opportunities decline,” she said.

2. Addiction is fueling poverty.

The Federal Reserve Bank of Boston found that the 20 New England counties that had the highest overdose mortality rates have several economic characteristics in common — poverty, disability and unemployment rates that exceed New England averages. These areas also have seen above-average declines in manufacturing and manual-labor occupations since 1970. Meanwhile, a paper by the National Bureau of Economic Research published last year found a pretty dramatic correlation between unemployment and drug abuse: For every single percentage point increase in county unemployment rate, the opioid death rate rises 3.6% per 100,000, and the opioid overdose emergency room visit rate increases by 7.0%.

3. The individual expense of dealing with opioid addiction is skyrocketing.

One of the more depressing economic facts you’ll find about opioids: The street price of heroin can be less than the cost of a pack of cigarettes in some places. Meanwhile, curing addiction is costly. The Trump administration report calculated that “total nonfatal cost” of fighting addiction among prescription opioid abusers is about $30,000 per patient. Individual costs are rising fast. Between 2009 and 2015, the average cost of an opioid admission increased from $58,500 to $92,400, according to a study of 162 academic hospitals led by Beth Israel Deaconess Medical Center in Boston. Why? Patients are arriving in worse condition, and require longer stays, the authors speculate.

4. Public money (i.e., you) is paying for most of this.

A 2016 report published in the Medical Care journal authored by experts from the National Center for Injury Prevention and Control, estimated that one-fourth of the costs from the opioid crisis are paid for by public sources like Medicare and Medicaid. That might understate the cost, however. Krueger, exploring the problem of labor force participation, found that two-thirds of men not in the labor force and taking pain medication used programs like Medicaid and Medicare to buy their prescription opioids for daily use. And there are plenty of hidden costs. As just one example: There are an estimated $7.7 billion in criminal justice-related costs to opioids, pushing addicts through the court systems and into incarceration. Nearly all of the costs are born by state and local governments; that’s funds which can’t be spent on schools or roads or parks.

How to find help

Start with your insurer. If you or a loved one is suffering from an opioid addiction, there are plenty of ways to get help. For starters, the Affordable Care Act (Obamacare) forced health insurers to cover substance abuse and addiction treatment the same as other treatments, through a concept known as “parity.” Combined with the expansion of Medicaid, and removal of the pre-existing condition rules, the ACA made addiction treatment coverage newly available to millions of Americans.

Private plans must cover addiction treatment as other diseases, too. Coverage amounts and deductibles can vary, but some plans will cover all or most of the cost.

Choose your treatment center carefully. Patients need to choose carefully, however. There are 14,500 addiction treatment centers, according to The National Institute on Drug Abuse. Not all of them are covered equally, or by every insurance plan.

Some addiction treatment centers have been criticized for putting profits above treatment, using brokers to find would-be patients with the most generous benefits — and sometimes, committing fraud to insure patients.

Medications can help. Some medications, such as methadone, buprenorphine and naltrexone, have been found to help wean patients off their addiction. These drugs are only covered under certain circumstances, however. Meanwhile, fewer than half of private-sector treatment programs offer medications for opioid use disorders, according to the National Institute on Drug Abuse.

Family members concerned about loved ones should know about naloxone, the life-saving drug that can reverse the potentially deadly impacts of an overdose long enough to get a patient to the hospital. In some states, it can be obtained without a prescription. A new nasal spray called Narcan® is now also available. Use this site to find a location where naloxone can be obtained. Have access to this before an overdose occurs; there may not be time during an incident.

Ask for help. Family members and those in need of treatment can learn more at Substance Abuse and Mental Health Services Administration, which has a 24-hour hotline at 1-800-662-HELP (4357), or at their website at

The National Council on Alcoholism and Drug Dependence and has a 24-hour hotline at 1-800-622-2255, and information is always available at

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Bob Sullivan
Bob Sullivan |

Bob Sullivan is a writer at MagnifyMoney. You can email Bob here


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Study: Millennials Depend on the Bank of Mom and Dad

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Millennials are advancing steadily into middle age. But statistically speaking, America’s largest generation retains one characteristic of their youth: Widespread dependence on their parents to help pay the bills.

A new survey reveals that even millennials who think of themselves as independent on money matters still hit up their parents for regular, recurring expenses. Of those surveyed, 54% claimed they stood on their own two feet, but when pressed a further 30% of those admitted to leaning on their parents to help cover costs on everything from groceries to car insurance.

The costs being covered by parents

For the most part, millennials aren’t hitting up their parents for cash to cover extravagant, one-off charges like airfare for an Instagram-worthy vacation. Instead, the survey found millennials ask mom and dad for help making ends meet for living expenses, such as the phone bill, food and rent. For example, of the millennials who receive monthly help from their parents, 48% of respondents say the money helps cover the phone bill. A more detailed breakdown can be seen in the graph below:

Besides these day-to-day costs, emergency spending requires a call home for some millennials. About 15% of all survey respondents said they would need help from their parents to cover a sudden $1,000 expense. Instead, most would opt to use either cash or savings, provided those savings weren’t earmarked for retirement in a tax-advantaged account.

Millennial money worries

Dipping into your emergency fund to repair a hole in the ceiling is a good strategy (and a reason why you save), while making a withdrawal from your savings account to pay for a bottle of rosé is not. Unfortunately a staggering 70% of millennials surveyed admitted to using savings to cover non-emergency expenses.

To use a favorite phrase of millennials, “this is problematic.” A savings account can only be drawn upon six times a month via debit card or check (due to federal regulations) and you don’t want to waste one of your six free withdrawals to pay for a pint of Americone Dream. Even worse, the money spent on non-emergency expenses won’t be there when you need it to pay for an unexpected, urgent cost.

Another metric of financial health where millennials could stand to improve is retirement savings. While 58% of the millennials surveyed claimed to save money with either each paycheck or once a month, 44% don’t have any sort of retirement savings account — either a private one or through work.

To be fair, millennials aren’t exactly celebrating these personal finance failures. Approximately 57% said they regretted how they’ve spent money from their savings account, and a little over 36% said that during the past week, they felt anxiety about their finances every single day.

The numbers behind the stress

A significant financial worry on millennials’ minds is not having enough money. While we’re pretty sure everyone, regardless of age, would like to have more money, a recent study by the Federal Reserve underscores that millennials are particularly hard-strapped for cash.

Titled “Are Millennials Different?”, the report found when compared to members of Generation X and Baby Boomers when they were roughly the same age as today’s millennials, the millennials have less means to deal with their financial challenges.

As the authors of the report put it in the conclusion of the report, “We showed that millennials do have lower real incomes than members of earlier generations when they were at similar ages, and millennials also appear to have accumulated fewer assets. The comparisons for debt are somewhat mixed, but it seems fair to conclude that millennials have levels of real debt that are about the same as those of members of Generation X when they were young and more than those of the baby boomers.”

How can millennials do better?

Besides winning the lottery, what else can millennials do to improve their financial situation and rely less on their parents?

“Many millennials are skeptical of the market,” said Dallen Haws, a financial planner based in Arizona. “Although it’s good that they are not investing willy-nilly, it will be very important that they get comfortable with investing to be able to reach their full financial potential.” Read more on how millennials (and everyone else) can start investing with an eye toward retirement.

Millennials should also embrace the power of austerity. That doesn’t mean living like a monk, but it does mean thinking twice (or thrice) about making big-ticket purchases and whether or not they are affordable.

“Without question, the biggest regret amongst millennials I work with is overpaying for a car,” said Rick Vazza, a CFA/CFP based in San Diego. “Some of my most successful young members have happily continued holding on to inexpensive cars allowing them to funnel more money toward travel, retirement funds or a down payment.”

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here


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7 Ways to Cool Down Summer Spending

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.


Summer is here and that means a few different things: battles with kids over sunscreen application, increased outdoor activities and a strained bank account. According to a 2018 study from LendEDU, the average adult American spends $2,229 during the summer, making it the second-most expensive season behind winter.

After being stuck inside your house for most of the colder months, it’s only natural to get excited about the outdoors and going on vacation. Unfortunately, leaving the comfort of your couch increases your expenses. Here are some tips to help you navigate the hotter months of the year without breaking a sweat.

Manage vacation expectations

One of the best ways to be able to afford a summer vacation is to work it into your yearly budget ahead of time. Steve Zakelj, a certified financial planner with Flatirons Wealth Management in Boulder, Colo. explained that a good vacation starts with planning.

“Start saving for it with $100, 500, $1,000 a month in the winter,” he said. “Set up a vacation account that gets an automatic deposit every month of the year. This way, you’re prepared for your summer trip and have a definitive budget you can use without guilt or long-term problems. Keep the monthly contributions going year-round so you’re already saving for next summer’s fun the moment you get back.”

Once you have your budget set, research places that are within your price range. If you love traveling overseas, try staying at budget-friendly, off the beaten path locations, like Sophia, Bulgaria. The average price of a hostel in Bulgaria’s capital is just $6.99 per night.

You can also keep your traveling costs low by thinking ahead. If you’re going to be out on the town a lot, there’s really no need to book an expensive hotel. If you are thinking the more activities the better, pick out ones that are affordable. “At your destination, look for free or cheap shows, events or festivals as opposed to venues that require the purchase of a pricey ticket,” explained Zakelj.

Another way to reduce vacation expenses is to stay put for a staycation. Plan local activities, hit up your favorite restaurant. Cutting out travel and accommodation expenses will allow you to funnel your money to some fun around town.

Get creative with child care

Having your kids home from school can make summer expensive, especially if you need to pay for child care. First, try asking other parents what their plans are — they may be privy to information about affordable camps or summer clubs you didn’t know existed. You may also find someone with a flexible schedule who can share child care duties with you. You take the kids one week, they take them the next and that frees up time for both of you to get stuff done without paying for day care or babysitters.

If you have relatives or your parents live nearby, see if it’s possible for your kids to visit for a week or two during the summer. Your loved ones get the benefit of seeing your kids, and you get the benefit of a free week of child care.

The YMCA is also a great source for affordable summer camps. This organization operates more than 1,850 day camps across the country. Search the YMCA site to find a camp near you.

When you do have the kids around, there are countless low-cost activities to keep them busy. “Enjoy the outdoors on the cheap,” suggested Zakelj. “Take hikes, go fishing, ride bikes, etc.  After an initial expense, most of these activities can have very low ongoing expenses.”

Pause your subscriptions

According to a study by tech consulting firm Waterstone Management Group, the average adult American spends $237.33 per month on subscription services. Summer, with its long days and beautiful weather, presents a great time to cut back on these costs. Are you running outside more? Consider canceling or pausing your gym membership. Find yourself hanging out with friends more often than sitting at home binge-watching TV shows? Cancel your Netflix account until the fall.

Take some time and comb through your bank account statements to find the subscription charges. Then, go through each one to see if you actually use it and if it truly adds value to your life. If you the answer is “no” to any of the services, cut away.

Don’t overdo it on the air conditioning

As the days get hotter and hotter, keep in mind that one big budget buster is your power bill. The Department of Energy says that air conditioners cost American homeowners about $29 billion annually. If you keep the AC cranked day and night, that’s a lot of money down the drain.

Instead of cooling an empty house, invest in a programmable thermostat that you can keep 7 to 10 degrees hotter than the setting you keep it at when you’re home. Doing this will save you about 10% on your power bill annually. If your AC unit is outdated, it might make sense to purchase a new, high-efficiency unit. Before you take that plunge, do some research on smart ways to finance the purchase.

Beyond taking steps to reduce energy costs with your AC unit directly, you can install ceiling fans to help circulate air. Consider planting leafy plants outside of your home (especially near windows), as they’ll shade your home and help keep it cool.

Take advantage of BBQ weather

You can avoid overspending during the summer by cutting back on dining out. The average American household shells out $2,667 on food costs outside of the home. The weather is nice and the days are longer, so why not have friends over to your place instead of going to a restaurant? As Zakelj explained, even reducing smaller expenses will help you keep spending under wraps.

“If you eat out regularly, think about eating your dinner at home and just going out for ice cream afterward,” said Zakelj. “You still get the fun of a trip out but just buying dessert is much cheaper than paying for an entire meal. Or have friends over to the back patio for BBQ and beer instead of hitting restaurants with them.”

Be realistic about wedding season

One big reason for summer overspending is weddings. According to wedding marketplace The Knot, the average amount guests spend on an out-of-town wedding is a whopping $901, including travel, attire, accomodations and gifts.

If you have to attend, save some cash by searching for cheap lodging. Check sites like for deals on rooms, or consider splitting the cost of a house through Airbnb or Vrbo. If you’re traveling alone, see if there’s another single friend with whom you can split a room. If you opt for a hotel, try to stay at the one reserved by the bride and groom — it’s common for the couple to request a block of rooms for their guests, often at a rate lower than listed prices.

As for traveling to the wedding, if it’s within driving distance, see if anyone wants to carpool to save on gas costs. Look into Amtrak, as it often has deals when you travel with multiple companions. Some airlines, like Southwest and United Airlines, also offer group rates, but you’ll need at least 10 people to take advantage of them.

While we all like to look spiffy for big events, there’s no need to break the bank on your wedding attire. Need a tux? Rent one from a site like, which lets you try one on for free. Looking for a dress? Try, where you’ll get 20% off your first rental.

Also, keep in mind: You don’t have to attend a wedding simply because you were invited. If the cost is high, ask yourself if you’re really that close to the couple getting hitched. If you’re not, skip it and send a gift instead.

Speaking of gifts: The earlier you buy from the wedding registry, the better. There will be plenty of options available, giving you the chance to purchase something the couple wants that’s well within your budget. If there’s not something affordable on the registry, ask other guests if they want to purchase a larger item together.

Beware of summer sales

There are plenty of sales during the summer — from July 4 weekend to back-to-school — but that doesn’t mean you need to hit every one. Take an inventory of all the items you already have, like notebooks and pens from the previous school year, or kids swim apparel that will still fit next summer. Once you know what you have, you can make a list of what you actually need. Let that list be your guide to summer sales. If it’s on the list, look into the sale. If it’s not, move along. Having a concrete reminder of the things you need will help you avoid spontaneous purchases that can derail your long-term savings goals.

The bottom line

It can be easy to overspend during the summer, but there are plenty of ways to avoid it. You just have to take the time to think through purchases, do some research and plan wisely. Dedicate yourself to streamlining your spending and you’ll see autumn arrive with your budget intact.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Chris O
Chris O'Shea |

Chris O'Shea is a writer at MagnifyMoney. You can email Chris here