The Impact of Medical Cannabis Laws on Commercial Health Insurer Individual Market Premiums, Claims, and Profitability
Abstract
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. 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. 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.
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© 2025 Walter de Gruyter GmbH, Berlin/Boston
Artikel in diesem Heft
- Frontmatter
- Research Articles
- Payment for Environmental Services and Environmental Tax Under Imperfect Competition
- Disclosure of R&D Knowledge with Cross-Ownership in a Mixed Duopoly
- Optimal Tariffs with Endogenous Entry Mode: Uniform Versus Discriminatory Tariffs
- What Happens When We Become Age 18? SNAP Work Requirement and SNAP Participation
- Hiring Subsidies for Low-Educated Unemployed Youths are Ineffective in a Tight Labor Market
- The Impact of Medical Cannabis Laws on Commercial Health Insurer Individual Market Premiums, Claims, and Profitability
- Addictive Treatment
- Complement or Substitute? Punishment and Self-Interested Enforcement
- Gender Gaps in Different Assessment Systems: The Role of Teacher Gender
- Hiring Biased Managers: Kant vs. Nash
- College Expansion and Heterogeneous College Premiums: Evidence from the Marginal Treatment Effect in China
- The Effects of Hiring Credits on Firms’ Dynamics: A Synthetic Difference-in-Differences Evaluation
- Letter
- Environmental Taxes Versus Subsidies with Unionized Labor Markets. A Note on the Role of Wage Setting Structure
Artikel in diesem Heft
- Frontmatter
- Research Articles
- Payment for Environmental Services and Environmental Tax Under Imperfect Competition
- Disclosure of R&D Knowledge with Cross-Ownership in a Mixed Duopoly
- Optimal Tariffs with Endogenous Entry Mode: Uniform Versus Discriminatory Tariffs
- What Happens When We Become Age 18? SNAP Work Requirement and SNAP Participation
- Hiring Subsidies for Low-Educated Unemployed Youths are Ineffective in a Tight Labor Market
- The Impact of Medical Cannabis Laws on Commercial Health Insurer Individual Market Premiums, Claims, and Profitability
- Addictive Treatment
- Complement or Substitute? Punishment and Self-Interested Enforcement
- Gender Gaps in Different Assessment Systems: The Role of Teacher Gender
- Hiring Biased Managers: Kant vs. Nash
- College Expansion and Heterogeneous College Premiums: Evidence from the Marginal Treatment Effect in China
- The Effects of Hiring Credits on Firms’ Dynamics: A Synthetic Difference-in-Differences Evaluation
- Letter
- Environmental Taxes Versus Subsidies with Unionized Labor Markets. A Note on the Role of Wage Setting Structure