Medical Marijuana Saves Millions in Medicare Costs


By ManagedCareBiz Team

A new study published in Health Affairs found that states that legalized medical marijuana saw declines in the number of Medicare prescriptions for drugs used to treat conditions such as chronic pain, anxiety or depression. This ultimately resulted in a big drop in Medicare Part D spending, which covers the cost on prescription medications.

The report examined data from Medicare Part D from 2010 to 2013. It is the first study to examine whether legalization changes doctors’ clinical practice and whether it could curb public health costs.

According to Kaiser Health News, the findings add context to the debate as more lawmakers express interest in medical marijuana. Ohio and Pennsylvania have this year passed laws allowing the drug for therapeutic purposes, making the practice legal in 25 states, plus Washington D.C. The question could also come to a vote in Florida and Missouri this November. A federal agency is considering reclassifying it under national drug policy to make medical marijuana more readily available.

Medical marijuana saved Medicare about $165 million in 2013, and researchers estimated that if the policy were nationalized, Medicare Part D spending would have declined in the same year by about $470 million. That would have been half a percent of the program’s total expenditures.

“We wouldn’t say that saving money is the reason to adopt this. But it should be part of the discussion,” said W. David Bradford, a professor of public policy at the University of Georgia and one of the study’s authors. “We think it’s pretty good indirect evidence that people are using this as medication.”

The study’s authors  found that in states that legalized medical marijuana, the number of drug prescriptions dropped for treating anxiety, depression, nausea, pain, psychosis, seizures, sleep disorders and spasticity. Those are all conditions for which marijuana is sometimes recommended. Prescriptions for other drugs treating other conditions, however, did not decline.

The researchers are separately looking into the impact medical marijuana could have on prescriptions covered by Medicaid, the federal-state health insurance program for low-income people. Though this research is still being finalized, they found a greater drop in prescription drug payments there, Bradford said.

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