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Could Implementing Medicinal Cannabis programs mean lower health insurance costs?

Studies on the long-term impacts of medicinal cannabis policies on healthcare costs and potential, individual healthcare savings have recently emerged. Where initially there were concerns about cannabis legalization leading to an increase in medical expenses, we are actually witnessing a decrease in medical expenses – ranging from decreased prescription use to lessened need for treatment facilities. 


Here we explore some of the researched ways medical savings are taking place when cannabis is legalized for medicinal use. 


Less ER visits and hospital admissions


The key finding of a 2020 published study, including 1,276 participants, was that medicinal cannabis use was associated with more positive ratings of health and quality of life, assessed across multiple domains. The group of individuals from this study who initiated cannabis use after their first study showed improvement in their health. The group of individuals using cannabis who stopped using cannabis showed diminished health. 


From this study, in addition to 14% of cannabis users reporting less use of current prescription medication, 39% reported less past-month Emergency Room (ER) visits, and 46% reported less hospital admissions. 


Reducing occurrences of substance use disorders


There is a longstanding debate that cannabis use complements use of hard drugs. However, one 2015 study showed no evidence that cocaine and heroin use increases with cannabis use. Instead, in states with medicinal cannabis laws, there was a 20% decrease in treatment for heroin use disorders and no change in treatment for cocaine use disorders following implementation.


A 2022 published study used a longitudinal, co-twin control design in 4043 twins. The tested the effect of cannabis legalization on outcomes of interest and whether legalization interacts with established vulnerability factors (age, sex, or externalizing psychopathology). They found that while legalization was associated with increased cannabis use that it was not associated with cannabis use disorder. Additionally and most notably, the authors found a decrease in alcohol use disorder symptoms and no changes in alcohol or illicit substance consumption.  


Decreased need for mental health treatments


Literature on the effects of expanding cannabis legislation on mental health treatment is scarce. There is evidence to point to decreased prescriptions for antidepressants and sedatives among the elderly and, more recently, research to show a decrease in the number of mental health treatment admissions. Data collected from the Substance Abuse and Mental Health Services Administration (SAMHSA) illustrate the correlation between states who have passed recreational cannabis laws and a clear, immediate, statistically significant decrease in total admissions. Due to limitations, it is difficult to identify the exact mechanisms leading to a decline in seeking mental health treatment; therefore it is recommended that future studies examine outcomes of improved mental health, self-medication, or other factors. 


Type 2 Diabetes Intervention


Diabetes is among the most expensive chronic conditions in the United States, where $1 out of every $4 of healthcare costs is spent on caring for individuals with diabetes. That total annual cost comes to about $327 billion per year, with an estimated cost among medicare beneficiaries who are 65 and older at $5,876 per person, per year. 


Researchers examined the effects of cannabis on glucose regulation and insulin secretion, publishing findings in August of 2023. From this publication, a meta-analysis of 7 studies containing 11 surveys and 4 cohorts revealed that the odds of developing type 2 diabetes in individuals exposed to cannabis was 0.48 times lower than those without cannabis exposure. 


While interventions for chronic conditions are important to reduce the number of individuals affected, and cannabis is being realized as a beneficial intervention, it is recommended that more studies be conducted to increase levels of evidence.


Lower health insurer premiums in the individual market


Implementing medicinal cannabis laws may have a direct effect on individual market health insurance premiums – for both cannabis users and non-users given the nature of insurance pooling. A 2023 published study looked at state-level private health insurer data from the National Association of Insurance Commissioners from 2010-2021. Specifically, researchers were looking at the changes to health insurance premiums after a state adopted a medicinal cannabis policy. 


The authors “provide evidence that although the effect does not begin until seven years post-medical cannabis law implementation, there is a significant and sizable reduction in health insurance premiums” (Cook et al., 2023). A conservative statistical analysis predicts a reduction in annual premiums of $1,663 per individual. When considering the number of individuals enrolled in an individual health insurance market across legalized states – the resulting estimate in annual savings is approximately $9.6 billion. 


Finding Support


Evidence is spreading across the healthcare sector that cannabis has many health benefits. However, one thing that may be challenging is finding a product or dose that is right for you and your specific circumstance. This is where Realm of Caring steps in to support with free one-on-one guidance. Reach our dedicated and knowledgeable care team by calling (719)347-5400 or emailing Quality of life matters, we are here to help.