How Insurance Companies Handle Medicinal Cannabis
Many insurance providers will only accept medicinal cannabis as a medical expense if it is used to help with specific, predetermined health conditions. This determination does not fall on you as the employer, but on the insurer, who will use their prior authorization process to decide eligibility. This allows the insurer to confirm that the individual has tried other appropriate treatments that have failed.
The insurer will confirm that there is medical evidence, provided through a doctor’s recommendation, that the medicinal cannabis will be beneficial for the conditions that they are allowing to be covered.
The conditions covered vary depending on the insurance provider, but they commonly include multiple sclerosis (MS), cancers, or patients requiring palliative care. Some plans also include treatment for chronic pain, rheumatoid arthritis and HIV/AIDS.
Why Coverage Might Be Limited (For Now)
Medical research is relatively new when it comes to evidence-based information on the effects of medicinal cannabis as a treatment option for issues such as chronic illness and pain. As a result of this research gap, the number of conditions currently covered by insurance providers is limited.
Outlining the predetermined conditions allows insurance providers to limit their exposure on the relatively unknown usage implications. This has contributed to the low demand for medicinal cannabis.
But the legalization in Canada and change in stigma around the globe will likely increase the number of studies on the effectiveness of medicinal cannabis. This will provide greater insight into the merit of utilizing medicinal cannabis as a treatment option and could cause an increase in the demand.
Different conditions that can be effectively treated by medicinal cannabis require varying prescribed amounts for usage. Each employee who has been prescribed medicinal cannabis is unique and their prescribed usage amounts will differ. Research suggests that average daily use of prescribed cannabis is one gram, which is how many of the insurance companies base their coverage. This will likely leave many plan members with needs that exceed the caps typically put on coverage amounts for medically prescribed cannabis.