Legalizing medical marijuana reduces the cost of health insurance, according to a new peer-reviewed study.
Titled simply Medical cannabis laws lower individual market health insurance premiums, the study is being published in the September issue of International Journal of Drug Policy, and it was published online ahead of print by the National Library of Medicine. It was conducted by researchers at Bowling Green State University, Illinois State University and Eastern Michigan Green State University.
For the study researchers examined “whether cannabis legalization significantly impacts aggregate health insurer premiums in the individual market.”
Researchers used 2010-2021 state-level U.S. private health insurer financial data from the National Association of Insurance Commissioners. They “examined changes to individual market health insurance premiums after the implementation of medical cannabis laws” and “employed a robust difference-in-differences estimator that accounted for variation in policy timing to exploit temporal and geographic variation in state-level medical cannabis legalization.”
Seven years after the implementation of Medical Cannabis laws, researchers “observe lower health insurer premiums in the individual market.” Starting seven years post-MCL implementation, “we find a reduction of $-1662.7 (95% confidence interval [CI -2650.1, -605.7]) for states which implemented MCLs compared to the control group, a reduction of -$1541.8 (95% confidence interval [CI 2602.1, -481.4]) in year 8.”
In year 9, there was a reduction of $-1625.8.
Researchers say that “Due to the nature of insurance pooling and community rating, these savings are appreciated by cannabis users and non-users alike in states that have implemented MCLs.”
The study concludes:
The implementation of MCLs lowers individual-market health insurance premiums. Health insurance spending, including premiums, comprises between 16% and 34% of household budgets in the United States. As healthcare costs continue to rise, our findings suggest that households that obtain their health insurance on the individual (i.e., not employer sponsored) market in states with MCLs appreciate significantly lower premiums.
