Analysis: Health Care Insurance Premiums Decline Following Adoption of Medical Cannabis Legalization

Medical cannabis legalization is associated with reductions in the average cost of individual health care premiums, according to data published in the International Journal of Drug Policy.

A team of researchers affiliated with Bowling Green State University in Ohio and Illinois State University assessed the impact of state-specific medical cannabis legalization laws on individual health insurance premiums. Investigators compared trends in premium costs in states with and without legalization over an eleven-year period (2010 to 2021).

They reported that prices for individual premiums fell in medical cannabis states as compared to jurisdictions where marijuana is illegal. “Initial concerns about medical cannabis legalization leading to increases in medical care costs, which would be reflected in higher insurance premiums, appear to be unfounded,” authors determined. “Starting seven years after MCL [medical cannabis legalization] implementation, we estimate a sizeable and statistically significant reduction in annual per-enrollee premiums of about $1600.”

The study’s authors further estimated, “If MCLs were enacted nationally, conservatively, we expect to see a savings of at least $16.8 billion.”

Investigators concluded: “In this study, we provide evidence of a statistically significant reduction in individual market premiums starting seven years after the implementation of medicinal cannabis laws. Because of the pooled nature of insurance, the lower premiums benefit cannabis users and non-users alike in medical cannabis states. Our results are important as health care expenses, including health insurance premiums, have been growing faster than inflation and comprise an increasing share of a household’s budget.”

The study’s findings are consistent with prior analyses showing that medical cannabis implementation is associated with a reduction in Medicaid costs. Other studies have shown that legalizing medical marijuana access is associated with significant reductions in patients’ use of opioids and other prescription medications.

Full text of the study, “Medical cannabis laws lower individual market health insurance premiums,” appears in the International Journal of Drug Policy.

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