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Medical Cannabis and Insurance
More than 17 years after cannabis was first legalized in Canada for medical use, some insurers are just beginning to cover the cost of the medication. Most coverage includes just a handful of conditions that qualify and does not cover the cost of medical cannabis for most users.
Many Licensed Producers (LPs) offer benefits to low-income individuals such as compassionate pricing and free vaporizers, but this does not cover the entire cost of the medication.
One of the biggest benefits for medical cannabis consumers is the ability to write off cannabis medication when it comes to tax time. Medical cannabis users may claim their cannabis medication as a “medical expense”. In order for this to occur cannabis must have been purchased through a Licensed Producer and have valid receipts of purchase. The only deduction available is for cannabis products such as oils, dried flowers and seeds. Medical cannabis users cannot write off materials associated with cannabis production or consumption.
Veterans Affairs: A Pioneer in Coverage
Veterans Affairs was the first Canadian insurance provider to cover medical cannabis beginning November 22, 2016. The Veterans Affairs Canada website states “the health and well-being of Veterans is a top priority for the Government of Canada. This was the fundamental consideration in the development of VAC’s reimbursement policy for cannabis for medical purposes”.
Veterans Affairs Canada reimburses eligible medical cannabis users for up to three grams of dried cannabis or equivalent in oils per day. If there is an extreme case that proves a need for additional daily cannabis up to 10 grams may be covered on a case by case basis. Eligible cannabis must be purchased through a Licensed Producer (LP) in all cases. Grey market purchases are not reimbursable.
As with most medical benefits there is a limit on the cost Veterans Affairs Canada will reimburse per gram of cannabis. A maximum rate of $8.50 per gram of cannabis is covered and medical users must pay the rest out of pocket.
Many Licensed Producer’s offer compassionate pricing to low income individuals as well as people who are on programs such as the Ontario Disability Support Program (ODSP). They also offer additional benefits such as money towards vaporizers.
Medical cannabis users should work with a patient educator who can help them determine if they qualify for compassionate pricing or other benefits. Patient educators are also able to recommend Licensed Providers who offer compassionate pricing, as not all LP’s offer this benefit.
Apollo Cannabis Clinics employ patient educators to work with each individual after they receive a medical cannabis recommendation. Patient educators are committed to helping medical cannabis users understand what benefits certain Licensed Producers may offer. They also work to help individuals select LPs who carry the product they require.
As cannabis does not yet have a Drug Identification Number (DIN) it is not covered by most private insurers. In order for a medication to be billed through a private insurer it requires a DIN which properly identifies the product to be billed. This Drug Identification Number is recorded by the pharmacist and sent to the insurance company for approval.
Although cannabis does not have a DIN required for billing, some private insurers are offering reimbursement for medical cannabis, but with very strict guidelines a patient must meet.
Sun Life Financial was the first private insurance company to begin covering cannabis, although the policy was only extended to individuals suffering from a small amount of conditions and as a last resort.
Dave Jones, senior vice-president of group benefits at Sun Life stated “it’s for specific conditions and symptoms where the evidence is clear that medical cannabis has enough value to outweigh risks”.
Sun Life covers medical cannabis for pain associated with cancer, multiple sclerosis, rheumatoid arthritis, HIV and palliative care for serious illnesses. The insurer is reluctant to cover a wider range of conditions as management fears it would increase usage and number of claims.
Several large insurers have begun to cover medical cannabis after receiving pressure from the employees of companies it covers. Loblaws, a Canadian grocery chain, became one of the first employers to offer medical cannabis reimbursement to their employees.
Insurance companies such as Green Shield Canada, Great-West Life and Manulife Financial Corporation have said that they are in the planning stages of offering coverage for cannabis.
Manulife offers cannabis coverage to several companies that requested it, but only for a handful of conditions.
Great-West Life reported that they will only begin covering cannabis when they can insure it will improve health outcomes as well as hold down costs for employers.
One of the greatest concern for insurers is the cost-effectiveness of cannabis. There are very few studies proving the efficacy of medical cannabis due to a long period of prohibition and it is more expensive than other drugs which treat similar conditions. For instance, a ten day supply of Baclofen, a muscle relaxant which also treats spasticity, costs $28.82. A ten day supply of cannabis, used as a muscle relaxant and anti-spasmatic, costs an average of $8 per gram. For an individual who uses 3 grams of cannabis per day the total cost for ten days of medication is $240.
The High Price of Medical Cannabis
When Veterans Affairs initially rolled out their coverage of cannabis they covered up to 10 grams per day, at a cost of $8.50 per gram. There were no limits on how much a medical cannabis user could claim per annum and there were no limitations on medical conditions which were covered.
Veterans affairs saw costs soar to over $63 million by March 2017. Afterwards the group limited coverage to three grams per day with resulting costs falling to $51 million by March 2018.
Insurers look to this statistic to show the perspective cost of covering medical cannabis for a wide range of conditions.
One of the downfalls of a lack of insurance coverage for medical cannabis is that it keeps medical cannabis users in the grey market. Anne-Marie, a BC resident stated “I keep buying from the grey market because my Licensed Producer is too expensive. I can buy a $6 gram in B.C. whereas my LP charges me $10 or more for the same product. I also like the selection I get at grey market dispensaries, my LP offers very few strains in comparison.”
Lack of Medical Oversight
Another big problem facing insurers is a growing number of doctors who prescribe medical cannabis and then do not follow up with their patients to make sure the medication is working.
Insurers feel that there needs to be more adequate medical oversight before they will begin covering medical cannabis.
Apollo Cannabis strives to support its patients every step of the way. A multidisciplinary team which includes doctors, nurses and patient educators will work with individuals to help them understand cannabis, appropriate dosing and products which will produce the greatest benefits. Additionally, Apollo’s patients have access to a 24-7 support line which can answer questions they may have.
Canadians for Fair Access to Medical Marijuana (CFAMM) is one advocacy group who continues to fight for enhanced coverage for medical cannabis. The group is a non-profit agency who seeks to advance medical cannabis in Canada.
CFAMM recommends that individuals approach their employers and private insurers if they wish to have medical cannabis covered. The website recommends gathering supporting medical evidence and even doctor’s letters to support the claim. The more evidence that is presented requiring the use of medical cannabis the stronger the claim will be.
During this process individuals are asking their plan administrator to “add coverage” for medical cannabis. This is usually done on a case by case basis.
The Statistics on Medical Cannabis
As of September 2018 there were approximately 342,000 registered medical cannabis users with the largest numbers of users residing in the province of Ontario. The average amount of cannabis prescribed to medical users is 2.1 grams.
Of the 342,000 registered medical users only 24,096 are registered to grow their own medicine. This means that the additional 317,904 medical cannabis users are required to buy cannabis from a Licensed Producer.
Current medical cannabis users are hopeful that private insurers will begin to recognize cannabis as medicine and cover the expenses, but at the current time there are very few insurance companies who offer reimbursement.
Until coverage for cannabis becomes more normalized many medical cannabis users must pay out of pocket for their medication. Individuals should consult with their private insurance company to determine if they are eligible for any sort of reimbursement or other benefits related to medical cannabis.
Apollo Cannabis Clinics Can Help
Apollo Cannabis Clinics employ a team of health care providers to help individuals gain access to medical cannabis and best utilize their medication. Patient educators are available to assist clients in choosing an appropriate Licensed Producer who may offer additional assistance, such as compassionate pricing or money towards vaporizers.
At the end of the day, most medical cannabis will be paid for out of pocket by the consumer. Unless a medical cannabis user is one of the lucky few whose employer covers this expense they will typically have to fight their plan administrator for future coverage.