More than two-thirds of the states have given the green light to medical cannabis. Likewise for the District of Columbia and 5 U.S. territories. With millions of people now using medical cannabis on a regular basis, one would think that the health insurance industry would be heavily involved. But that’s not the case.
Imagine you are a medical cannabis patient living in Brigham City, Utah. You pay a visit to the Beehive Farmacy for the first time and quickly discover that you need to pay for your medicines out of pocket. Your health insurance does not cover medical cannabis.
Utah residents are not the only ones in this predicament. Very few, if any, health insurance companies provide coverage for medical cannabis and cannabis-related services. Patients need to bear the entire financial burden on their own. Whether that is good or bad depends on your perspective. What we know for sure is why the current situation exists.
Marijuana and the CSA
Although we refer to medical cannabis, what we are really talking about is marijuana consumed for medicinal purposes. And in fact, it doesn’t even have to be marijuana directly. A variety of medical cannabis medicines are actually products infused with THC. Think medical cannabis vapes, gummies, and topical lotions. None of the products are actually marijuana. They are considered derived from marijuana because they contain THC.
The one thing all the products have in common is their legal status under the federal Controlled Substances Act (CSA). The CSA classifies marijuana and THC as Schedule I controlled substances. That means they are completely banned from coast-to-coast. Like heroin, it is federally illegal to possess or consume marijuana in any form. It is also illegal to grow, process, and distribute marijuana.
So how do the states get away with legalizing medical and recreational cannabis? First of all, they have not legalized anything. State law does not preempt federal law. Instead of legalizing, states have chosen to decriminalize cannabis. This means they have elected to not pursue criminal prosecution against cannabis companies or consumers.
Why It Matters to Health Insurance
By now you might be wondering why any of this matters to health insurance. Here’s the deal: health insurance companies base all of their decisions on financial risk. That’s the nature of insurance in general. Insurance companies are very risk-averse, which plays a significant role in what they will and will not cover. Now, let us relate that to medical cannabis.
Because medical cannabis is federally illegal, providing health insurance coverage for it would open insurers to significant risk. Covering medical cannabis would mean they are knowingly paying for something that is against the law. It could easily result in federal prosecution.
Health insurance companies also have legitimate questions about:
- Medical cannabis efficacy
- Treatment standards and protocols
- Product safety and liability
- Potential unknown side effects
The truth of the matter is that what we do know about medical cannabis is a lot less than what we don’t know. The vast uncertainties associated with cannabis as a medicine creates a dark cloud of risk insurance companies are not willing to approach.
A Path Forward
Rescheduling cannabis, as the federal government is currently considering, probably will not lead immediately to widespread health insurance coverage. But rescheduling is a path forward. Rescheduling would open the door to more research along with banking reform, insurance reform, and other changes that could eventually lead to routine coverage.
For now, medical cannabis patients need to pay out a pocket. It is not an ideal situation, but that’s all they have to work with at the moment.
