Image source: Flickr user Gennadiy Rudenko.

There are certainly no shortage of issues as we head into the 2016 elections, some of which include terrorism/national security, U.S. economic growth, prescription drug inflation, and of course marijuana.

Over the past two decades we've seen a rapid shift in the way the American public views the currently illicit drug. In 1995 there wasn't a single state that approved marijuana for medicinal use, and just a quarter of respondents in national polls shared a favorable view of the drug. Today, there are 23 states that allow marijuana to be prescribed by physicians for medicinal use and four additional states that are experimenting with recreational use for adults. Furthermore, slightly over half of all respondents in major national polls now have a favorable opinion on marijuana.

In short, there's no reason why marijuana shouldn't be a hot topic in the 2016 elections.

Medical marijuana could save the U.S. healthcare system money
But, the marijuana debate is about more than just gaining access to recreational marijuana -- it's about granting access to chronic or terminally ill patients that could benefit from marijuana. If marijuana were legalized across the United States for medical use it could, in theory, save the health insurance industry a substantial amount of money.

As we looked at last year, a clinical review published by Dr. Kathryn Hahn of Oregon State University's College of Pharmacy in 2011 suggested that drug diversion -- the act of using prescription drugs in a recreational manner -- costs the health insurance industry $72.5 billion a year, including $25 billion in costs to the private insurance market. At the heart of these costs are opioid-based prescriptions which are being abused and could potentially be replaced by marijuana, thus reducing costs by practically eliminating the chance of an overdose or complications.

In theory, medical marijuana could potentially provide a new treatment pathway for a number of diseases, and it could lower healthcare costs for providers -- something that could intrigue the federal government.

Image source: Social Security Administration.

Will medical marijuana ever be covered by Medicare?
But, could medical marijuana ever catch on with Medicare, the entitlement program largely responsible for covering a substantial amount of the late-in-life costs of our nation's seniors? In 2015 Medicare is anticipated to cost the federal government about $546 billion, or roughly 3% of GDP, so any program or therapy that could save the federal government money is likely to be at least considered for future implementation.

Here are three critical steps we'd probably need to see for Medicare to step up and cover medical marijuana for our nation's seniors.

1. A well-defined safety profile
First, we'd need conclusive evidence that marijuana has a safety profile that can be trusted over the long run. As noted above, marijuana use in issues that involve pain and/or inflammation could practically eliminate the chance of an overdose for patients. However, the long-term use of marijuana is still very much up for debate.

Image source: Pixabay.

On one hand, we have quite a few clinical studies implying that marijuana could be useful in fighting aggressive brain cancer, in controlling blood sugar for type 2 diabetics, and in treating epilepsy in both adults and children. More studies are needed to conclusively determine that marijuana is behind the efficacy observed in these studies, but there are definite correlations that marijuana may offer medical benefits to some patients.

On the other side of the coin long-term marijuana use has been linked with possible memory loss, abnormal brain formation, and adverse psychological effects. We also have to remember that for decades researchers focused almost entirely on marijuana's risk profile, meaning we just don't have a good balance of good versus bad data available for lawmakers or researchers to comb through.

Long story short, the first thing we need is for all the puzzle pieces to come together and for marijuana to demonstrate a favorable safety profile. Formulating this picture will likely take many more years.

2. Clear evidence that marijuana can reduce healthcare costs
Secondly, there will need to be clear evidence presented to lawmakers that using medical marijuana is not only safe for the user, but that it will save the federal government a substantial amount of money over the long run.

Image source: Flickr user Vic.

If Hahn's study is correct, utilizing medical marijuana in the place of other prescription drugs would not only reduce the cost to the consumer at the prescription level, but it would insulate hospitals and clinics from the misuse of prescription products. Once again, it's nearly impossible to overdose on marijuana, meaning there would likely be a correlated drop in expenses related to treating overdose patients.

The other thought that comes into play here is that if marijuana were legalized on a federal level, the federal government could sanction its own grow farms and bypass a middleman or pharmaceutical company in the process. Doing so could net it substantial cost-savings over the long run.

3. A rescheduling of marijuana at the federal level
Lastly, if marijuana is proven to be safe and cost-effective for the federal government, then it would be up to Congress to not be apathetic about the issue and reschedule the drug away from its current illicit (schedule 1) status.

Image source: White House on Flickr.

Rescheduling marijuana would signify that it does indeed have medical benefits, and it would essentially remove federal prosecution from the table, save for rare instances. Doing so would also open the door for banks to begin offering banking services to marijuana businesses without the fear of prosecution. Finally, it would remove the restrictive federal tax laws in place for businesses that sell schedule 1 substances, allowing them to take normal business deductions.

If these three steps are met, then it's possible the federal government could begin covering medical marijuana for Medicare patients.

An unlikely scenario means a risky investment
Although it's intriguing to ponder what the future of medical marijuana may hold in terms of treatment potential and for Medicare, its chances of being covered by Medicare appear highly improbable at the moment.

Image source: Flickr user

The biggest hurdle that marijuana is unlikely to overcome any time soon is its safety profile. It's probably going to take many years before lawmakers have enough data to the point where they feel comfortable deciding whether or not to legalize or decriminalize marijuana. While always a possibility that Congress could legalize the drug, there's no guarantee that existing marijuana stocks and businesses have enough cash in their coffers to survive the long wait. Additionally, there are no guarantees that Congress will even push to legalize or decriminalize the drug, period.

Plus, marijuana businesses are at a distinct disadvantage to "normal" businesses until the government changes its stance on the drug. In the meantime it means minimal access to basic banking services such as a checking account or line of credit, as well as having to pay substantially more in federal taxes.

Medical marijuana's progression is a story worth monitoring; and one day in the future it may be moneymaker for investors and an option for Medicare patients. But, for the time being your best bet is to keep your investment money far away from the marijuana industry with so many questions still left unanswered, and to come to the realization that Medicare is unlikely to cover medical marijuana anytime soon.