Reports from University of Texas El Paso Provide New Insights into Medical Marijuana (The Impact of Medical Cannabis Laws On Commercial Health Insurer Individual Market Premiums, Claims, and Profitability): Marijuana/Cannabis – Medical Marijuana

2025 SEP 26 (NewsRx) -- By a News Reporter-Staff News Editor at Marijuana Daily -- Fresh data on Marijuana/Cannabis - Medical Marijuana are presented in a new report. According to news reporting originating from El Paso, United States, by NewsRx correspondents, research stated, “Higher administrative costs, adverse selection, and restrictive rating schemes all threaten the profitability of commercial insurers in the individual health insurance market. The uncertainty surrounding cannabis liberalization potentially exacerbates this risk.”

Our news editors obtained a quote from the research from the University of Texas El Paso, “Individual insurance markets and medical cannabis laws (MCLs) rapidly expanded across the United States over the past decade. Using commercial insurerlevel data compiled by the National Association of Insurance Commissioners from 2010 to 2018, we use a difference-in-differences approach to examine the impact of medical cannabis laws on medical claims, premiums, and insurer profitability in the individual insurance market. We find that claims increase during the first year of legalization before declining and becoming negative after two years. We also find weak evidence of post-MCL reductions in premiums.”

According to the news editors, the research concluded: “These dynamic effects on insurer costs and revenues are reflected in insurer underwriting profits as the initially negative effects become positive and marginally significant as the legal medical cannabis market develops.”

This research has been peer-reviewed.

For more information on this research see: The Impact of Medical Cannabis Laws On Commercial Health Insurer Individual Market Premiums, Claims, and Profitability. The B.E. Journal of Economic Analysis & Policy, 2025. The B.E. Journal of Economic Analysis & Policy can be contacted at: Walter De Gruyter Gmbh, Genthiner Strasse 13, D-10785 Berlin, Germany.

The news editors report that additional information may be obtained by contacting Rhet A. Smith, University of Texas El Paso, El Paso, CA 79968, United States. Additional authors for this research include Amanda C. Cook, Joshua D. Frederick and E. Tice Sirmans.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1515/bejeap-2024-0358. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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