NOV 14, 2023 5:00 AM PST

Reduction in Health insurance Premiums After Cannabis Legalization

WRITTEN BY: Kerry Charron

A study published in the Journal of International Drug Policy examined the impact of medical cannabis laws (MCLs) on individual healthcare premiums. The findings indicate that states with regulated medical cannabis programs have more significant reductions in private health insurance premiums. 

Since states have implemented MCLs at different points over the last few decades, the researchers used a difference-in-differences approach that accounted for the variation in treatment timing. The study concluded that significant effects begin roughly seven years after MCL implementation. The study links MCLs to cost savings of approximately $1,663 per year. The researchers compared premium activity in states with RMLs and those without any form of cannabis legalization. 

The study links MCLs to cost savings of roughly $1,663 per year. The researchers compared premium activity in states with RMLs and those without any form of cannabis legalization. 

The researchers analyzed National Association of Insurance Commissioners data collected in 2010-2021 on private health insurer financial reports. The researchers noted trends in individual market health insurance premiums after medical cannabis legalization. Other studies have identified a similar trend of declines in Medicare and Medicaid prescription costs in states with medical and recreational cannabis laws.

Previous studies indicated the potential impact of legalized medical cannabis on insurance premiums. MCLs increase access to treatment options for a wide variety of health conditions, such as anxiety, chronic pain, inflammation, and nausea. Many studies highlight the link between legalization and drops in substance abuse crisis therapy and hospital admission rates.

Future research will illuminate the link between MCL implementation and reduced health insurance spending. Tracking the impact of cannabis legalization on private health insurance spending will be critical as the regulatory and legal changes evolve. New York recently passed legislation requiring medical cannabis doctor visits to be covered by state-run insurance programs, and states like Ohio recently passed recreational cannabis laws. Many cannabis industry leaders believe that Ohio’s Issue 2 law would increase access for individuals who may not be able to afford medical marijuana through their private insurance or obtain approval from a medical doctor. Recent examples of legislation in these two states and many others point to critical future research topics. 

Sources: Drexel University, Journal of International Drug Policy


About the Author
Bachelor's (BA/BS/Other)
Kerry Charron writes about medical cannabis research. She has experience working in a Florida cultivation center and has participated in advocacy efforts for medical cannabis.
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