If Congress really wants to reduce Medicaid costs, there could be a pretty simple solution: Legalize marijuana.
A new study out of the University of Georgia investigating the association between medical marijuana laws and prescription drug spending in Medicaid programs in all 50 states and the District of Columbia found that the 28 states that allow medical marijuana use saw a substantial reduction in the number of prescriptions given to program enrollees. The study estimates medical-marijuana friendly states saved $475 million in prescription drug costs in 2014, and estimates national savings would have eclipsed $1 billion that year if medical cannabis were legalized across the country.
"Our findings that actual prescription drug use in Medicaid varies in ways consistent with marijuana's being a substitute product provides additional, albeit indirect, evidence of medical use," the researchers wrote. "In times of significant budget pressure, the possible savings of $1.01 billion nationally in spending on prescription fee-for service Medicaid is significant."
For the record, the country spends about $400 billion annually on Medicaid but, hey, $1 billion in savings is still $1 billion in savings, right? Last Chance Grade, anyone?
Medicaid — the nation's popular health care program for the poor — has long been a political sticking point. It was widely expanded under the Affordable Care Act, drawing the ire of some Republicans who view it as an entitlement program growing out of control and are now looking to drastically restructure it under the American Health Care Act that just passed the House.
The University of George study is groundbreaking because it adds to a growing — if anecdotal — body of evidence that patients are substituting medical cannabis for other pharmaceuticals in states were its legal and actually ties that to cost savings for taxpayers.
Specifically, the research found a 13 percent reduction in drugs used to treat depression, a 17 percent reduction for nausea drugs, 12 percent for those used to treat psychosis and seizure disorders and an 11 percent drop in pain meds.
The study comes after a review by the Drug and Alcohol Dependence journal looked at 17 years of hospital discharge records from 27 states and found hospitalizations for complications from opioid use abuse and dependence were about 23 percent lower in states with legal access to medical marijuana. Researchers also found that pot-friendly states recorded 13 percent fewer opioid overdoses.
Meanwhile, in the Oval Office, President Donald J. Trump signed his first piece of major legislation on May 5 and fired a cryptic shot across the bow of the medical cannabis industry in the process.
Trump has sent decidedly mixed messages on the subject of medical cannabis. On the campaign trail he spoke in almost glowing terms about its virtues, but after being elected he promptly appointed an attorney general who famously said "good people don't smoke marijuana" and recently said weed is a "life-wrecking dependency" only "slightly less awful" than heroin. But last week came Trump's first litmus test on the subject in the form of a $1 trillion spending bill, which contained a provision prohibiting the Justice Department from using any of its funding to block or interfere with state medical marijuana laws.
"I will treat this provision consistently with my constitutional responsibility to take care that the laws be faithfully executed," Trump wrote in his signing statement.
It's hard to know what to make of Trump's statement, though the same could be said of much of what he's written and said in the 100-plus days since taking office. Some fear it's an indication that he plans to give Attorney General Jeff Sessions the green light to ignore the Congressional funding ban, while others seem to think it's just a bit of bluster from a man intent on ensuring his authority isn't questioned.
In any event, there goes the clarity the industry celebrated with the spending bill's passage last week.
Thadeus Greenson is the Journal's news editor. Reach him at 442-1400, extension 321, or email@example.com. Follow him on Twitter @thadeusgreenson.