US Could Save $29 Billion Annually by Legalizing Medical Cannabis

Studies show that full legalization of medical cannabis in the U.S. could not only improve the lives of patients, but also save a staggering $29 billion a year in health insurance costs. This isn’t a distant vision—it’s a reality that could happen right now.

New research, new hopes

Leafwell’s research provides some incredibly important information. It found that in states where medical cannabis is legal, companies pay 3.4% less for insurance premiums, which translates to savings of about $238 per employee per year. That may seem like a small amount, but when you multiply it across millions of employees and their families, the savings add up to billions.

Leafwell didn’t just go for the generalities. The analysis looked at data from 2003 to 2022, meticulously tracking the impact of state laws on health insurance costs. The results are clear: Medical cannabis legalization has a positive impact on the health care system, lowering costs for both companies and workers. If all states adopted similar laws, the savings could reach $29 billion per year.

Employers and employees: everyone wins

How much do these savings amount to? Studies show that employers could save about $22.9 billion and employees an additional $6.5 billion. In practice, this means lower premiums for insurance plans, especially those covering single employees and employees with one dependent. The costs of these plans were $348 lower per employee per year in states with legal medical cannabis.

These aren’t just numbers. Lower premiums are real benefits for companies that can translate into better pay, greater investment in employee development, and a healthier work environment. For employees, this means less stress about healthcare costs and greater financial stability.

Where do these savings come from?

The savings associated with legalizing medical cannabis are the result of several key factors that impact healthcare costs and insurance premiums:

Reduced medical costs with cannabis as an alternative to expensive medications

Medical cannabis is often used as an alternative to conventional medications, especially those that are expensive and burdensome for patients.

People suffering from chronic pain, anxiety, insomnia, or other conditions that are traditionally treated with strong painkillers (e.g., opioids) are increasingly turning to medical cannabis. Because cannabis is less expensive compared to many prescription medications, including opioids, its use leads to lower treatment costs for patients.

Reducing the need for opioids and other pain medications

Medical cannabis can reduce or completely replace the use of opioids, which not only lowers the cost of the medication but also reduces hospitalizations related to overdoses, addiction, and other side effects of pain medications. In states where medical cannabis is legal, there has been a significant decrease in the number of opioid prescriptions, which translates into lower costs associated with treating addiction and complications from opioids.

Lower insurance premiums due to reduced claims

Lower medical costs and fewer doctor visits and hospitalizations lead to fewer claims submitted to insurers. Insurers, noting fewer expensive cases, can reduce insurance premiums for both employers and employees. This is an effect that stabilizes over time and translates into long-term savings in the system.

Better employee health and reduced absenteeism

Access to medical cannabis can improve the overall health of employees by reducing sick days and increasing productivity. Employees with chronic pain who have access to medical cannabis often return to work more quickly and are better able to manage their daily responsibilities. Fewer sick days and absenteeism translates into lower costs for employers.

Reducing the costs of treating chronic diseases and inflammatory conditions

Medical cannabis has documented anti-inflammatory and analgesic effects, which can be helpful in treating many chronic diseases, such as rheumatoid arthritis, fibromyalgia, and multiple sclerosis. It allows patients to better control their symptoms, reducing the need for frequent visits to specialists, medical procedures, and expensive drug treatments.

Synergy effect and positive social change

Legalizing medical cannabis also helps create a more inclusive society, where patients have access to modern and less invasive forms of treatment. This has a long-term impact on improving the health of the population, which in turn leads to lower healthcare costs at the system level.

Together, these factors lead to significant savings at the individual, company, and national levels, making the legalization of medical cannabis not only a public health issue, but also an economically sound decision.

Groundbreaking Research – Evidence from the Past and Future

Leafwell’s findings are not isolated. Previous studies, including those published in the International Journal of Drug Policy, have shown that medical cannabis legalization leads to significant savings. Over time, 7 to 9 years after the law was introduced, insurance premiums dropped by as much as $1,600 per year compared to states that had not legalized. The cost reductions were stable and persistent, undermining earlier concerns that legalization would increase health care costs.

The American Medical Association has also confirmed the positive impact of cannabis on the health of patients, including those suffering from chronic pain. Many of them replace opioids and other pain medications with cannabis without losing their quality of life. This is further evidence that cannabis can play a key role in the future of medicine.

A Costly Lesson for the Pharmaceutical Industry

The pharmaceutical industry, reluctant to change, is feeling the sting of legalization. Studies show that pharmaceutical companies lose an average of $10 billion in value after each “legalization event.” Patients, given access to legal cannabis, are increasingly forgoing expensive and burdensome medications in favor of natural alternatives. This is not only a sign that consumer preferences are changing, but also that legalization could disrupt the status quo across the healthcare industry.

In short, full legalization of medical cannabis could not only save a lot of money, but also revolutionize the healthcare system in the US. The benefits are multifaceted, from lower insurance costs to improved public health and patient quality of life. This is a watershed moment that shows that legal changes can have far-reaching and beneficial effects on the entire society.

Will the US take this step? This is a question that could define the future of healthcare. One thing is certain – the potential for savings and improved public health is too great to ignore.

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(Featured image by RoadTripGuys via Pixabay)

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