As Canada is set to embark on being the first major industrialized nation to legalize cannabis, being an early leader in this field comes with sweeping changes on how it will be viewed from an insurance standpoint.
With the political narrative maturing and the number of registered medical cannabis patients continuing to grow, it’s marking a major industry shift with insurance companies. There are currently more than 235,000 medical cannabis patients in the system across Canada, and with the number of prescriptions being issued at a substantial rate – it’s forcing the hand of insurers to adapt to the evolving landscape.
The Growing Public Acceptance of Cannabis
When you really think about it, there hasn’t been a lot of positive commercial marketing towards cannabis use over the years – but there has been a lot of stigmatization and uncertainty around what this plant can actually help with.
From a historical perspective, cannabis was widely used for medicine, going back as far as 12,000 years, and it’s actually humanity’s oldest cultivated crops. A lot of the negative rhetoric that surrounded cannabis essentially crippled any research towards its health benefits, and as it becomes more accessible across North America, it could take over as a safer option for pain relief to help curb the alarming opioid usage.
Pioneers in the Industry
Sun Life Financial recently added the medical cannabis option to group benefits plans where plan sponsors will have the option to add coverage to extended health-care plans, ranging from $1,500 to $6,000 per covered person per year. It marks a significant shift in how insurance companies have evaluated sound clinical evidence and are listening to the rising interest from their employer clients.
“These new changes reflect our commitment to evaluating new products and services to ensure we are meeting the needs of our clients, helping them live healthier lives,” said Dave Jones, senior vice-president of group benefits at Sun Life.
A user of medical cannabis could pay upwards of several hundred dollars a month depending on the size of the prescription. So the rollout of Sun Life’s coverage helps with these costs as it will initially be available to plan members for the following specific conditions and symptoms:
- Cancer pain or nausea and vomiting associated with cancer treatments,
- Pain or spasticity associated with multiple sclerosis,
- Rheumatoid arthritis with pain that hasn’t responded to standard therapy,
- Neuropathic pain or anorexia related to HIV/AIDS, or even nausea and appetite issues,
- Patients requiring palliative care.
While this phase will focus on patients in chronic pain, Sun Life announced they are committed to continuing research that supports the use of medical cannabis for other conditions such as diabetes, alcoholism, chronic pain, schizophrenia, PTSD, depression and epilepsy.
This added coverage is a big game changer for many of my clients as only one in every eight offer health care spending accounts within their plans. Now, Sun Life is opening the door for many Canadians who really need access to this type of coverage. Not only is this going to help drive down pain for a lot of patients, but it is also going to help drive down drug costs for companies.
What is the Official Stance From Insurance Companies?
The only thing that was holding this whole process up was how insurance companies will treat it. And once it was decided that it would be viewed as a medical supply with a fixed amount, they realized it was time to move from the stage of evaluate and review, to now offering it as a benefit for medicinal purposes.
When you think of how group benefits plans cater to offering robust health and wellness plans to their employees, medical cannabis will refer to the former in that statement because wellness, such as yoga classes are not relating to a medical necessity. Everything has to be looked at from a health standpoint and how it can be used to treat certain conditions. And since medical cannabis doesn’t have a drug identification number, it will have the same deductible under medical services and equipment.
My Predictions on How This Will Unfold in 2018
This is a very positive step in how insurance companies are taking proactive measures to include cannabis coverage to meet the growing health needs of employees. Over the next six to twelve months, I would say over half of the fourteen insurance companies that do benefits in Canada will implement it as a medical supply.
In the case of Shoppers Drug Mart and Loblaw Companies Ltd. making waves last year when they introduced a medical cannabis benefit to their drug plan, my take is that it’s a lot easier as a major corporation with self-insurance plans to set their own rules and regulations surrounding it. Smaller employers are really at the mercy of the insurance company if they are going to cover it or not, but I believe that within the next year there will certainly be an uptick on adding this as an option for their group benefits plan.
It’s a sign of the times, and insurance companies have to keep up with the competition because if they don’t offer it, they’re going to lose out on market share, and they can’t afford to be on the wrong side of history.
We are well past the point on if it will be initiated – it all boils down to when there will be total buy in across the board.
If you have any questions about how we can meet your benefit needs, or to see how this could be an option for your group plan down the road – let’s set up a time to chat.