Allstate cuts $2.7bn as it faces steep costs of opioid crisis
Allstate has announced plans to cut $2 billion from its opioid opioid drug insurance business as it struggles to combat the deadly epidemic.
The announcement comes just weeks after the company’s chief executive officer, Jim Meyer, was named to the U.S. Senate’s Finance Committee.
He said the company would spend the savings to reduce the number of people in its ERs and boost access to health care for the nation’s opioid users.
The opioid epidemic has become a national crisis with an estimated 2.5 million Americans dying of opioid overdoses in 2016, according to a New York Times analysis.
In October, Allstate announced it would cover $1 billion of the cost of treating opioid-related illnesses in the United States, including those linked to the opioid epidemic.
A spokesman for the company said the decision to make the cuts is “not related to the cost per insured or the number or severity of opioid related deaths.”
The company has said it has not decided whether it will offer any insurance policies to individuals with chronic conditions.
It has also not disclosed how many of its plans will be affected.
The news comes as the government and pharmaceutical companies are grappling with the escalating cost of the opioid crisis.
The Trump administration announced plans this month to cut funding for drug testing for people who use prescription painkillers and has been pressuring other states to do the same.
The cuts will impact about 500,000 individuals and $1.6 billion in federal funding.
A federal appeals court ruled in April that the Trump administration’s opioid rule should be rescinded, and a judge in Washington state said on Tuesday the administration must make more detailed proposals about how it will address the problem.
Federal health officials said the administration has not offered an alternative plan to address the crisis, and the Justice Department has said the rule does not apply to the state of Ohio.