Highlight on Colorado: 2016 report on effects of marijuana legalization

On November 8, 2016, nine states will have legalization of marijuana for either medical or recreational use on the ballot. Five of those states will consider the recreational use of marijuana, including California, Massachusetts, Maine, Arizona, and Nevada. Before these states “go to pot,” perhaps they should consider the results of a 2016 study by the Colorado Department of Public Safety.

The study was mandated by the Colorado General Assembly. It required the Division of Criminal Justice in the Colorado Department of Public Safety to conduct a study of the impacts of Colorado’s 2013 legalization, particularly as they relate to law enforcement activities.

Public Safety

The study found that the total number of marijuana arrests decreased by 46 percent between 2012 and 2014, from 12,894 to 7,004. As a share of all arrests in Colorado, marijuana was responsible for 6 percent of all arrests in 2012 and 3 percent in 2014. The number of marijuana arrests decreased by 51 percent for Whites, 33 percent for Hispanics, and 25 percent for African-Americans.

In terms of court filings, the study found that the total number of marijuana-related filings declined 81 percent between 2012 and 2015, from 10,340 to 1,954. The filings fell 69 percent for juveniles 10 to 17 years old, 78 percent for young adults 18 to 20 years old, and 86 percent for adults 21 or older. In terms of organized crime, between 2012 and 2015, there were 88 filings that were related to some marijuana charge. The most common marijuana industry-related crime in Denver was burglary, accounting for 63 percent of marijuana crime related to the industry in 2015.

Traffic safety data was limited, but the study noted that the number of summons issued by the Colorado State Patrol for Driving Under the Influence in which marijuana or marijuana-in-combination with other drugs was involved decreased 1 percent between 2014 and 2015 (674 to 665).

In terms of assessing diversion of marijuana to other states, from January 1, 2014, to August 30, 2015, the study found that there were 261 drug-related interdiction submission in which Colorado was the initiating state. Of those 261 submissions, 169 (65 percent) were for marijuana/hashish.

Public Health

According to the National Survey on Drug Use and Health, administered by the Substance Abuse and Mental Health Services Administration, the current prevalence rates for marijuana usage in the past 30 days have increased significantly for young adults (18 to 25 years old), from 21 percent in 2006 to 31 percent in 2014. Marijuana use by adults (26 years or older) also increased significantly, from 5 percent in 2006 to 12 percent in 2014. In comparison, the study cited a 2014 telephone survey in Colorado that found 14 percent of adults reported marijuana use in the past 30 days and 33 percent of current users reported using daily.

According to the study, hospitalizations with possible marijuana exposures, diagnoses, or billing codes per 100,000 hospitalizations increased from 803 per 100,000 before commercialization (2001-2009) to 2,413 per 100,000 after commercialization to 2,413 per 100,00 after commercialization (2014- June 2015).  The number of calls to poison control mentioning marijuana exposure increased from 44 calls in 2006 to 227 calls in 2015.

Youth Impact

The study noted that in 2013, a Healthy Kids Colorado Survey (HKCS) found that 80 percent of high school students did not use marijuana in the past 30 days. The HKCS showed, however, that marijuana use increased by grade level and that Colorado youth use marijuana at a higher rate then the national average. The perception of health risk of using marijuana is also declining among Colorado youth, according to the HKCS.

The number of juvenile marijuana arrests increased 5 percent, from 3,234 in 2012 to 3,400 in 2014, according to the study. The number of White juvenile arrests decreased from 2,198 in 2012 to 2,016 in 2014 (-8 percent). The number of Hispanic juvenile arrests increased from 778 in 2012 to 1,006 in 2014 (+29 percent). The number of African-Amercian juvenile arrests increased from 205 in 2012 to 324 in 2014 (+58 percent).

The study noted that data on drug tests from the Division of Probation Services showed that the percent of the 10- to 14-year-old group testing positive for tetrahydrocannabinol (THC — the chemical responsible for most of marijuana’s psychological effects) one or two times increased from 19 percent in 2012 to 23 percent in 2014, while the percentage testing positive three or more times went from 18 to 25 percent.

Colorado Department of Education data showed that the drug suspension rates increased from 391 (per 100,00 students) in the 2008-09 school year to 506 in 2009-10. In addition, the drug expulsion rate was 65 in 2008-09, increasing to 90 in 2009-10, and decreasing to 50 in 2014-15.

Revenue Data

The study also noted that in December 2015 there were 2,538 licensed marijuana businesses in Colorado, with 70 percent located in Denver, El Paso, Pueblo, and Boulder. The total tax revenue, licenses, and fees from these businesses increased from $76,152,468 in 2014 to $135,100,465 in 2015 (+77 percent). The excise tax revenue dedicated to school capital construction assistance totaled $35,060,590 in 2015.

Conclusions

The study found that because data was only available through 2014, it was too soon to draw any definite conclusions about the potential effects of marijuana legalization or commercialization on public safety, public health, or youth outcomes. In addition, the study noted that the lack of pre-commercialization data, the decreasing social stigma, and challenges to law enforcement combine to make it difficult to translate the early findings into definitive statements of outcomes.

 

 

The new $38B health care universe may start in Colorado

If Colorado voters pass Amendment 69, the state’s new universal health coverage system implemented will cost an estimated $38 billion each year. The Colorado Health Institute analyzed the possible implementation of ColoradoCare and noted that unlike the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) goal of increased coverage through utilization of existing programs, ColoradoCare would replace Medicaid and private insurance entirely.

Operation

ColoradoCare would provide automatic coverage for everyone with a primary residence in the state. This coverage would be truly universal, including those who do not qualify for current coverage due to immigration status. Those covered would be able to see any provider that accepts ColoradoCare patients. Some services would be completely covered as required by the ACA, and others would require a co-payment. No deductibles would apply. The plan includes 11 categories of benefits, from primary care, to hospitalization, to palliative care.

The system would be considered a state “political subdivision,” similar to cities and counties, and would be operated by a board of directors. This board would control more annual funding than the entire state government. The size of ColoradoCare, if it were a corporation, would be ranked ahead of powerful companies like American Express, Nike, and McDonald’s in the Fortune 500.

The Institute noted that ColoradoCare proponents believe that the reduced administrative burden will save time and money, as much as $4 billion, while others are concerned that market competition would be reduced. ColoradoCare would not employ providers but rather reimburse providers for services, like under current systems. However, because ColoradoCare would be setting reimbursement rates and would also dominate the market, the Institute noted that providers would have a hard time turning down ColoradoCare patients.

Funding

The program would be covered by various taxes, starting with payroll taxes. Workers in the state would pay 3.33 percent, and employers would cover 6.67 percent. Non-payroll income, such as self-employment, business income, real estate income, and investment income would also be taxed at 10 percent. ColoradoCare would terminate all employer mandates and subsidies, which would be replaced by the payroll tax. In addition, current Medicaid funding would be redirected to pay for the new system.

Thirteen States, Including IL, FL, CA, See Opportunity to Make Medicaid Cuts

Amid the Obama Administration’s encouragement for states to expand their Medicaid rolls per the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148), 13 states have implemented cuts to the program or are preparing to implement reductions in provider payments and benefits offered to Medicaid recipients. Some states may have seen June’s Supreme Court decision, requiring that states be allowed to opt-out of PPACA’s Medicaid expansion scheme, as an opportunity to scale back their Medicaid programs.

Eligibility Requirements

While the decision did not specifically state so, some state level officials have interpreted the lifting of the Medicaid expansion requirement as the lifting of the PPACA-imposed prohibition from altering their Medicaid eligibility requirements. Wisconsin has already changed its policy to deny Medicaid coverage to non-pregnant adults who are both offered affordable employer-sponsored coverage and have an income that exceeds 133 percent of the federal poverty level (FPL). Some adult recipients must also be responsible for paying new or increased monthly premiums. Wisconsin officials estimate these changes will save the state around $28.1 million.

Other states that have made changes to their eligibility requirements since the PPACA decision or are preparing to do so include the following:

  • Hawaii–Non-pregnant adults will no longer be eligible for Medicaid if their income exceeds 133 percent of the FPL (the limit was formerly 200 percent of FPL).
  • Illinois–Parents’ income must not exceed 133 percent of FPL (formerly 185 percent of FPL).
  • Connecticut–Plans to limit adult coverage to those with less than $10,000 in assets, not including one car and a home, and to calculate income for adult children aged 19 – 25 living at home by including their parents’ assets and income.
  • Maine–Plans to reduce parental eligibility to 100 percent of the FPL (currently 200 percent of FPL) and to do away with coverage for 19 and 20-year olds.

Drug Benefits

Currently, 16 states limit the monthly amount of drugs that recipients can obtain through their Medicaid programs. Four states have increased prescription drug copays and/or imposed monthly caps since the PPACA decision was issued:

  • Alabama–With the exception of long-term care patients and HIV and psychiatric drugs, Medicaid beneficiaries were limited to one brand name drug through July 31. Now, beneficiaries are limited to four brand-name drugs monthly.
  • California–Implemented $1 and $3 copays for specific drugs.
  • Illinois–Program recipients are now limited to four prescriptions monthly, in addition to being subject to increased copays. Recipients may seek state approval to receive more than four drugs.
  • South Dakota–Beneficiaries must now pay copays of $1 for generic drugs and $3.30 for brand name drugs.

Other Cuts

In addition to budget-saving measures surrounding prescription drug benefits and program eligibility, states have implemented a variety of other cost reductions since the June decision, including provider payment cuts, emergency room copays, and reductions in coverage. Among those cuts are the following:

    • Alabama–Physician and dentist reimbursement has been reduced by 10 percent. The frequency of routine eye exams has been reduced to one every three years, and eyeglass coverage has been completely eliminated.
    • California–Payment rates have been frozen for nursing facilities while private hospital reimbursement has been reduced by $150 million. Clinical laboratory reimbursement has been lowered by 10 percent.
    • Colorado–Copays and enrollment fees, to be determined by family income, have been added to the Children’s Health Insurance Program. Nursing home reimbursement rates have been reduced by 1.5 percent, and orthodontics coverage has been limited.
    • Florida–Reimbursement rates have been lowered by 1.3 percent for nursing facilities and 5.6 percent for hospitals. Florida is planning to reduce the allowable number of home health visits for non-pregnant adults to three per day maximum, emergency room visits to six per year maximum, and primary care visits to a maximum of two monthly, pending federal approval.
    • Illinois–Reduced reimbursement to non-safety net hospitals by 3.5 percent and to non-physician, non-dentist providers by 2.7 percent. Routine dental care and chiropractic services are no longer covered. Beneficiaries who visit an emergency room for non-emergency purposes now incur a $3.65 copay.
    • Louisiana–Payments have been reduced by 3.7 percent to dialysis centers and dentists, 3.4 percent to non-primary care physicians, and 1.9 percent to mental health providers.
    • Maine–Services obtained at ambulatory surgery centers and sexually transmitted disease clinics will no longer be covered. With the exception of pregnant women, smoking cessation products will also not be covered.
    • Maryland–Payments to hospitals have been lowered by 1 percent and by 2 percent for nursing facilities.
    • New Hampshire–Hospital reimbursement has been reduced by $160 million.
    • South Dakota–Coverage for non-emergency adult dental services has been limited to $1,000 per year.

 

End of Week Roundup

This week, CMS is preparing to hike rates for primary care services provided under Medicaid. In the face of upcoming health reform requirements, are employers going to elect to eliminate health insurance coverage for their employees? Also this week:

  • The FDA’s over-the-counter drug proposal may result in Medicare & Medicaid savings.
  • The Senate Finance Committee examines opioid ties to the drug industry.
  • Why are small businesses failing to take advantage of the health care tax credit?
  • How your organization can effectively educate physicians on how to buy-in to its compliance program.
  • Colorado passed a bill to make hospital bills more affordable for the uninsured.