A recently published study conducted by researchers from Bowling Green State University, Illinois State University, and Eastern Michigan Green State University has the medical cannabis industry smiling from ear to ear. The study seems to demonstrate a link between medical cannabis legalization and lower health insurance rates. But there is more to it than meets the eye.
Lower health insurance premiums are always a good thing. If we can reduce premiums by encouraging people to use cannabis for certain qualifying medical conditions, we should – provided cannabis treatment actually works. But we also need to be incredibly careful about establishing casual links and then reporting them as absolute fact.
More About the Study
The first thing to know about this most recent study is that it only looked at insurance premium information in the years since certain states legalized medical cannabis. Researchers attempted to account for a variety of factors that might explain why rates decreased. Whether or not they actually proved that medical cannabis was responsible for lower insurance costs remains a matter of debate.
It is also important to note that the study only looked at data relating to the individual health insurance market. Researchers did not analyze data relating to fully funded, employer-sponsored health plans. Nor did they look at Medicare, Medicaid, and Affordable Care Act (ACA) Marketplace plans.
Given that the individual market makes up just a fraction of the total health insurance business, researchers were looking at a relatively small sample size. What happens on the individual market is not always reflected across the entire spectrum of health insurance products.
Individual Rates Went Down
As for the actual numbers, researchers discovered that annual health insurance premiums have fallen by some $1600 in states with legalized medical cannabis, compared to states that continue to tow the prohibition line. Researchers discovered that the most significant savings do not kick in until the seventh year following medical cannabis legalization.
In the eighth and ninth years, researchers noted lower reductions in health insurance premium increases, but the numbers were still fairly stable. They further contend that insurance pooling and other factors means that all participants in the individual market benefit even though they do not all use medical cannabis.
Possible Explanations for the Reductions
If the link between medical cannabis legalization and insurance premium reductions is legitimate, there could be any number of reasons explaining why. For example, chronic pain remains the number one complaint cited by medical cannabis users. That is certainly the case in Utah, according to the experts at Utahmarijuana.org.
Utahmarijuana.org suggests that chronic pain patients might be choosing medical cannabis over narcotic pain medications. If this is the case, there are at least two things that could directly affect healthcare costs and, subsequently, health insurance premiums:
- Out-Of-Pocket Payments – Medical cannabis is still largely a cash-and-carry business because insurance doesn’t pay for it. Patients cover it out-of-pocket.
- Associated Medical Costs – Narcotic pain medications have their own downsides, including additional medical costs associated with their use. If patients are no longer using the medications, associated costs would go down.
There are other things that could explain falling health insurance premiums on the individual market. The fact that researchers have found a link between lower premiums and medical cannabis legalization does not prove cause and effect. We need to be careful not to assume such cause and effect as fact.
If nothing else, the research adds more evidence in favor of medical cannabis as a legitimate treatment for some medical conditions. As the evidence mounts, it is getting harder for those who oppose medical cannabis to continue doing so.
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