HomeNewsMedical Cannabis Helps Slash U.S Medicaid Costs

Medical Cannabis Helps Slash U.S Medicaid Costs

A recently published paper estimates that if all US states had a medical marijuana law in 2014, total savings for fee-for-service Medicaid could have been a whopping USD $1.01 billion.

The new study is by the same authors of a previous paper that we reported on last year indicating medical marijuana has also been saving the USA’s Medicare program a big bundle of cash.

For non-US folks, the difference between Medicare and Medicaid:

  • Medicare is a federal program that provides health coverage if you are 65 or older or have a severe disability, no matter your income.
  • Medicaid is a state and federal program that provides health coverage if you have a very low income.

Through studying quarterly data on all fee-for-service Medicaid prescriptions in all fifty U.S states during the period 2007–14, the researchers delved into the association between states that had introduced medical marijuana laws and the average number of prescriptions filled by Medicaid beneficiaries.

The researchers, Ashley C. Bradford and W. David Bradford, hypothesized medical cannabis laws would be accompanied by a cut in FDA-approved drug prescriptions due to marijuana being substituted for those drugs.

While acknowledging certain limitations in they way the analysis was compiled, it would appear they were correct.

“We found that the use of prescription drugs in fee-for-service Medicaid was lower in states with medical marijuana laws than in states without such laws in five of the nine broad clinical areas we studied,” state the authors.

“In times of significant budget pressure, the possible savings of $1.01 billion nationally in spending on prescriptions in fee-for-service Medicaid is significant.”

The clinical areas studied were anxiety, depression, glaucoma, nausea, pain, psychosis, seizure disorders, sleep disorders, and spasticity (a condition where muscles are continuously contracted). Interestingly,  there was no significant association between having a medical marijuana law and dispensed FDA-approved drugs for anxiety, glaucoma, sleep disorders, or spasticity found.

While the potential savings are an impressive figure, the researchers raise the point that if medical cannabis was covered by Medicaid, much of the estimated savings could be shifted to cover the cost – although that ever happening is rather unlikely..

The study has been published in the journal Health Affairs

Terry Lassitenaz
Terry Lassitenaz writes exclusively for Hemp Gazette and has done so since the site launched in 2015. He has a special interest in the political arena relating to medical cannabis, particularly in Australia, and addressing the many myths surrounding this incredibly useful plant. You can contact Terry here.

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