Health Insurance and Cannabis Products: Are They Covered?

Cannabis products and health insurance policies

As the frontiers of cannabis use in human medicine keep expanding, it is not uncommon for insurance buyers to enquire if cannabis is covered in their insurance plans. Health insurance is an interesting discussion point in the United States. In most countries health insurance is organized as a joint public-private venture for citizens, expatriates, and temporary residents. People enrolled under the Medicare and Medicaid insurance plans in the U.S. enjoy the benefits of government-subsidized insurance schemes. In developed countries, a health insurance plan is necessary to adequately cater to the expensive health costs resulting from rising healthcare costs. In the U.S. the cost of medical treatments is considered to be high, with a single visit to the doctor’s clinic gulping a few hundreds of dollars. For the most part, medical facilities in the U.S. are largely privately owned and driven towards profit-making. This is considered the single most important fact for high medical costs in the U.S. Others include a lack of pricing transparency and the high cost of prescription drugs. 

In 2010, the Affordable Care Act (ACA)—formally known as the Patient Protection and Affordable Care Act—was signed into law as a comprehensive health reform that addresses health insurance coverage, preventive care, and healthcare costs. The ACA makes health insurance affordable to more people and expands the reach of the Medicaid program. The ACA also supports innovative medical care delivery methods aimed at lowering the cost of healthcare. On this premise, prescribers have experimented with drug combinations and alternative therapy methods as low-cost innovative treatment plans. Insurance buyers in the U.S. now search for medical cannabis options in insurance plans. However, only a few people understand health insurance companies’ stance on medical cannabis.  

Why medical cannabis is not covered under health insurance programs

• Classification of cannabis as a Schedule 1 drug

In the U.S., the regulation of controlled substances falls under the jurisdiction of the Drug Enforcement Administration (DEA). The DEA classifies drugs, chemicals, and controlled substances into any of five different schedules. Schedule 1 drugs are dangerous in humans and have the potential to be abused. Drugs in Schedule 5 are allowed in drug substances as they contain low quantities of opioids and are considered safe in human medicine. Cannabis, methamphetamine, heroin, and cocaine are drugs classified as Schedule 1 drugs. Drugs in Schedule 5 include Lyrica (Pregabalin), Robitussin A.C., and Epidolex, a CBD-derived drug. Initially, cannabidiol was listed as a Schedule 1 drug; however, the DEA announced in September 2018 that cannabis-derived CBD products could be allowed in drug substances (as a Schedule 5 drug) as long as THC levels in the FDA-approved drug is below 0.1 percent Consequently, cannabis products are listed as on Schedule 1, and CBD-derived drugs are listed as Schedule 5 on fulfilling specified requirements.  

As a Schedule 1 substance, cannabis-derived products cannot be prescribed under state laws and so cannot be covered under health insurance policies. The continued classification of cannabis as Schedule 1 substance and the delicate legal framework remains the biggest barrier against the coverage of cannabis-derived products by health insurance companies.   

• Most cannabis products lack FDA approval

Currently, aside from Epidolex, Marinol, and Syndros, the FDA has not approved any medical product containing cannabis or cannabis-derived compounds. These products were only approved after conclusive evidence confirmed that they are safe for use in humans and effective for their intended use. In 2001, the DEA published a letter to deny a petition seeking to initiate rulemaking proceedings to reschedule marijuana. As published in this letter, the DEA requested a scientific and scheduling recommendation from the Department of Health and Human Services (DHHS). 

The DHHS report concluded that marijuana has a high potential for abuse, has no acceptable medical use in the United States, and lacks an acceptable level of safety for use even under medical supervision. Contents of this letter also revealed that there are no FDA-approved marijuana products, nor is marijuana under a New Drug Application evaluation for any indication. This letter further announced the DEA’s stance in maintaining the status of cannabis as a Schedule 1 drug. As long as cannabis products lack FDA approval, their use under any health insurance cover is banned.   

• Lack of adequate conclusive clinical research on cannabis

As a long-standing policy, health insurance companies only cover prescription drugs that are considered to have been extensively researched for safety concerns, potency, and efficacy. Although there are different research reports about the potential of cannabis-derived products in human medicine, there exist different grey areas in medical cannabis use. Regarding clinical research into cannabis, the DEA posits that cannabis has no adequate or well-controlled studies proving efficacy, has no widely available scientific evidence and has no reproducible chemistry. The DEA also agree that cannabis is not accepted by qualified experts. These controversies surrounding the clinical research on cannabis is another reason why cannabis products are not covered under health Insurance policies.

Prospects of medical cannabis in health insurance programs

Cannabis regulations in the U.S. and Europe are fluid with different possibilities of changing the strict rules governing cannabis use and possession, especially in medical practice. Although cannabis products are not covered under health insurance policies, the United Kingdom and select states in the U.S. allow prescribers to recommend cannabis-derived products for humans. These drugs are, however, procured by the patients using personal funds.  

In May 2020, the U.S. House of Representatives passed a relief bill aimed at reducing the coronavirus pandemic’s pressure on economic development. Included in the bill is the Secure and Fair Enforcement (SAFE) Banking Act aimed at securing access to financial services for cannabis-related businesses and service providers. If passed by the Senate, the SAFE Banking Act will allow financial institutions, including banks and insurance companies, to collaborate with cannabis companies. This is expected to modify the current stance of health insurance companies on cannabis-derived products. 

REFERENCES

• https://www.healthcare.gov/glossary/affordable-care-act/
• https://www.pacificprime.com/country/americas/usa/-health-insurance-pacific-prime/
• https://eh.net/encyclopedia/health-insurance-in-the-united-states/
• https://www.deadiversion.usdoj.gov/fed_regs/rules/2011/fr070.htm
• https://www.congress.gov/bill/116th-congress/house-bill/1595/text
• https://cannabisindustryjournal.com/news_article/safe-banking-act-included-in-covid-19-legislation/amp/