New research shows medical marijuana laws could significantly reduce health insurance costs for employers.
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If you own or work for a company in one of the 38 states (and the District of Columbia) that have legalized medical marijuana, you could potentially save thousands of dollars. A new study from Leafwell that looked at U.S. companies from 2003 to 2022 found that:
· Medical insurance premiums were 3.4% lower for commercial private insurance plans in medical marijuana states than in states that prohibit medical marijuana. This results in annual savings of $238 per employee, the study reports.
· Employee Plus 1 compensation plan premiums decreased by 2.9% ($348) annually.
Therefore, a 50-employee company in a medical marijuana state could spend $14,650 less, the study says. And obviously, this savings can grow rapidly as your company grows. “A company in a state that employs 500 employees covered by a single health insurance plan and uses medical marijuana will be less likely to be a similar company with a similar workforce in a state without such laws.” compared to $119,000 less in medical costs,” Mitchell Doucette, Leafwell's senior research director, said in an email.
“Whether it’s chronic pain or cancer, we believe that ensuring access through insurance can have a huge impact on employee well-being and productivity,” Doucette added. Ta. “Investing in cannabis care not only benefits patient care, but it also helps streamline your business.”
Miami-based Leafwell is a medical marijuana telemedicine company that helps customers obtain the necessary medical marijuana usage cards. Leafwell's study, “Measuring the Impact of Medical Cannabis Laws on Employer-Paid Health Insurance Costs: A Differences-in-Differences Analysis,” was published this month in the journal Applied Health Economy and Health Policy.
The data used are from the Agency for Healthcare Research and Quality's (annual) Healthcare Expenditure Panel Survey from 2003 to 2022. The study, whose sample strategy and size and response rate are described here, asked employers to estimate the average health insurance premiums and deductibles per employee, stratified by health insurance plan type. We asked them to report their total costs.
In 2022, a total of 39,969 businesses nationwide were subject to expenditure surveys. Notably, Leafwell also looked at insurance savings for family insurance plans in medical cannabis states, but found no statistically significant results.
The big question, of course, was and remains the “why” behind these premium cost reductions in medical cannabis states. Are employees in these states simply saving their insurance companies money because they are looking for natural ways to cure their illnesses rather than billing their insurance for more expensive standard drugs?
“Without individual-level data, we cannot reveal where the savings are coming from,” Doucette said in an email, responding, “Why?” question. It also could not be determined whether the findings were related to drugs containing CBD, THC, or both.
However, he speculated about several possible explanations.
· Reducing medical spending on prescription drugs
Research reports show a decline in the number of prescriptions, including opioid prescriptions, in Medicaid and Medicare populations, indicating that, for better or worse, the cost of treatment is being passed on to patients.
・Medical changes in medical cannabis patients
Risky behavior may be on the decline as people turn to cannabis instead of beer, alcohol, and cigarettes. Although more research is needed, it is clear that there is a positive impact on health spending and associated negative events, such as reductions in drunk driving accidents.
· Reducing the use of mental health and/or substance abuse treatment
Medical marijuana laws appear to be associated with fewer opioid hospitalizations, indicating less spending on expensive addiction treatment.
Human suffering is certainly part of it. Leafwell's study looked at a woman named Sarah, a cancer patient who began using medical cannabis to reduce the nausea and anxiety caused by standard treatments such as chemotherapy. Marijuana costs ranged from $50 to $300 a month, so Sarah was clearly saving money with fewer ER visits.
Where is all this heading? Leafwell expanded on her findings to explore “what if” scenarios. “If all 50 states had enacted medical marijuana laws, the impact could have been a combined 0.65% reduction in GDP in health spending.” In 2022, health spending accounted for 17.3 percent of U.S. GDP, or $4.5 trillion. So a 0.65 percent reduction would save $29 billion. ”
