Research Brief: Examining the Potential Role of Opioid Settlement Funds in the Face of Impending Federal Budget Reductions for Substance Use Disorders
Summary Published by Johns Hopkins, September 16, 2026
By Zoe Lindenfeld
Study Authors: Zoe Lindenfeld, Amanda I. Mauri, Sachini Bandara, Jonathan H. Cantor, Ryan K. McBain, Abigail Winiker
Bottom Line: If all SAMHSA funds for substance use disorder were eliminated, opioid settlement funds could only replace around 50% of these dollars.
Background
The Substance Abuse and Mental Health Services Administration (SAMHSA) is one of the largest funders of substance use disorder (SUD) treatment and prevention in the United States. Proposed federal budget cuts, combined with broader restructuring of health programs, have raised concerns about how states will sustain these services.
At the same time, billions of dollars from national opioid settlement agreements are being distributed to states and local governments. These funds are intended for opioid remediation, such as expanding treatment access, harm reduction services, and overdose prevention activities. But as fiscal pressure grows, there is a risk that policymakers will use settlement dollars to replace federal funding. This analysis asks a straightforward question: could opioid settlement funds realistically offset federal SUD funding?
Methods
We compared annual federal SUD funding from SAMHSA (2024), obtained from the Tracking Accountability in Governments Grants System (TAGGS) and SAMHSA’s website, to projected opioid settlement payments to states (2022–2038), obtained from KFF Health News. To make results comparable across states, we calculated funding amounts for both SAMHSA funds and settlement dollars per person with a substance use disorder. We then estimated 1) the difference in dollars per capita between SAMHSA funds and settlement funds; and 2) the percentage of federal funding that settlement dollars could replace.
What We Found
1. Settlement funds cover only about half of SAMHSA funding
Across states, settlement funds could replace 51% of SAMHSA SUD funding on average, and the average shortfall was $56.83 per person with SUD. In other words, even if fully redirected, settlement funds would leave a substantial funding gap.
2. Nearly every state faces a shortfall
Oregon was the only state where settlement funds exceeded federal funding, and in all other states, settlement funds fell short, often by a wide margin. States with relatively high replacement shares (e.g., Tennessee, New York, North Carolina) still did not fully close the gap.
3. High-need states may be most vulnerable
States with the highest overdose death rates as of 2023 receive the most federal SAMHSA funding, but do not receive proportionally higher settlement funds. The places with the greatest need therefore face some of the largest funding gaps, which could have negative consequences for access to treatment and outcomes.
4. Results are consistent across multiple sensitivity analyses.
We found that using total projected settlement payouts (rather than annual) increases coverage (59%), as does using the highest possible payouts for each state across years (coverage raised to 73%). Restricting to state-controlled SAMHSA and settlement funds drops the percentage of funds replaced (~20%). Across these scenarios, the same conclusion holds: settlement funds are insufficient to replace federal funding.
Study Implications
Opioid settlement funds and federal substance use disorder (SUD) funding are not interchangeable. Settlement funds are time-limited and variable, whereas federal funding provides ongoing, structured support for treatment and prevention services. In addition, settlement agreements require that funds be used specifically for opioid remediation, rather than general budget relief. As a result, using settlement dollars to backfill federal cuts would not only fall short financially but also risk diverting resources away from their intended purpose.
These findings have several important policy implications.
- First, federal funding remains essential, as settlement dollars alone cannot sustain the current SUD treatment and prevention system.
- Second, misuse of settlement funds is a real concern; without strong oversight, these resources may be redirected away from evidence-based interventions.
- Third, funding gaps could worsen the overdose crisis, particularly given that the United States continues to experience high overdose mortality, with approximately 80,000 deaths in 2024, while access to treatment remains uneven.
- Finally, equity concerns are central: states with the highest overdose burden may face the largest funding shortfalls, potentially exacerbating existing disparities in access to care and health outcomes.
Key Takeaways
Opioid settlement funds provide an important but limited resource for addressing the overdose crisis. They were never designed to replace federal funding, and this analysis shows they cannot do so in practice. As federal support for SUD services faces potential reductions, relying on settlement dollars as a substitute would leave substantial gaps in funding, especially in the communities that need it most.
Read the full study here.
Zoe Lindenfeld, Ph.D., is an Assistant Professor at the Rutgers University Edward J. Bloustein School of Planning and Public Policy. She is a health policy and services researcher focused on mitigating factors that perpetuate health inequities for individuals with substance use disorders. She has used mixed-methods research designs with qualitative, quantitative, and geospatial data to evaluate questions related to how harm reduction can be operationalized as an approach to care within clinical settings, racial disparities in the availability of hospital-based substance use treatment, factors contributing to the development of comprehensive substance use treatment models, and the feasibility of using telemedicine for opioid use disorder treatment, among others. Her research contributes to theory and understanding of disparities in the distribution of services for substance use disorders, and can inform the decisions of health system leaders, policymakers, and practitioners. Zoe earned her Ph.D. in Public Health Policy and Management at NYU School of Global Public Health.
Citation
Lindenfeld Z, Mauri AI, Bandara S, Cantor JH, McBain RK, Winiker A. Examining the Potential Role of Opioid Settlement Funds in the Face of Impending Federal Budget Reductions for Substance Use Disorders. Health Serv Res. 2026 Apr;61(2):e70094. doi: 10.1111/1475-6773.70094. PMID: 41734911; PMCID: PMC12932015.