Earlier this month, Berkeley’s City Council voted unanimously for an ordinance that would provide free medical marijuana to patients with low incomes. If the ordinance passes its second reading in August, marijuana dispensaries will have to set aside 2 percent of their product — which must be of equivalent quality to the marijuana they’re selling at market prices — and give it free to city residents with incomes below $32,000.
It makes a lot more sense than it sounds like at first.
In a way, Berkeley’s action is ordinary: The government provides free or cheap medical products to people with low incomes all the time, with a goal of ensuring that people do not go without needed medical care. The government requires hospitals to provide emergency care to patients in need regardless of ability to pay. It provides free health insurance to the poor through Medicaid, and subsidizes insurance for people with low and moderate incomes through the Affordable Care Act exchanges.
Those regular channels don’t work for medical marijuana users. Even though California authorizes medical marijuana, it’s illegal under federal law, and the Food and Drug Administration has not approved it. As a result, Medi-Cal, California’s version of Medicaid, doesn’t cover it. If any private health insurance plans cover it, I couldn’t find them; Brendan Buck, a spokesman for the industry group America’s Health Insurance Plans, told me they’re not aware of any plans that cover marijuana, either.
A medical marijuana plant in Oakland, Calif., in 2009. In August, dispensaries in Berkeley, Calif., may have to set aside 2 percent of their product and give it free to city residents with incomes below $32,000.
Depending on the level of use, a low-income medical marijuana user may be on the hook for hundreds of dollars a month in expenses. Some dispensaries in California offer assistance, including reduced prices for people who qualify for Medi-Cal, but it’s nothing like the comprehensive coverage that insurance provides for F.D.A.-approved drugs.
Berkeley is addressing a real coverage gap. Still, the set-aside is not a perfect mechanism. Because it’s limited to 2 percent of production, it won’t serve the entire needy population. And it relies on the dreaded “cross-subsidy”: Dispensaries can be expected to raise prices on everybody else to cover the cost of giving away marijuana free to some.
It would be better if the city just paid cash to finance marijuana purchases by the poor, so the costs would be borne by taxpayers at large instead of by nonpoor medical marijuana users, in the same way that Medicaid is financed with broad-based taxes. But, like the health insurers, the city of Berkeley might be wary of buying quasi-legal marijuana. Cross-subsidies are often used to hide the true fiscal cost of what’s being provided free or cheaply; in this rare instance, Berkeley has a good reason for wanting to hide the ball.
If marijuana is legalized, federally regulated and integrated into the regular medical system, a local set-aside system like Berkeley’s won’t be necessary. Until then, the city’s wacky-sounding free marijuana plan will serve as a useful workaround.
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