Medical Marijuana: Will your group plan cover it?

The legalization of marijuana has been a major political talking point in Canada recently. What many people don’t know is that the use of marijuana for medical purposes has been legal in Canada since 2000. This is when Canadians were first able to legally acquire marijuana for HIV/AIDS and a handful of other conditions.

The use of marijuana, also known as cannabis, as a medicinal drug dates back centuries in many cultures. More recent studies have shown that marijuana can provide medical therapy for a myriad of diseases, alleviate symptoms and provide pain relief. Despite these findings, Health Canada has stressed that more research and trials are needed before they can endorse medical marijuana as a mainstream treatment drug.

Although marijuana is not an approved drug or medicine in Canada and has not gone through the necessary rigorous scientific trials for efficacy or safety, Canadian courts have required reasonable access to a legal source of marijuana for medical purposes when authorized by a physician. 

New Rules Create New Medical Marijuana Industry

On April 1, 2014, a new set of laws called the Marijuana for Medicinal Purposes Regulations (MMPR) came into effect in Canada. According to the MMPR, patients who require marijuana for medical use need to obtain the medication from a government-approved licensed producer. The MMPR prohibits patients and unlicensed producers from growing their own marijuana plants or obtaining them through any other means.

Since licensed producers are the only legal source of obtaining medical marijuana, they are in control of setting the prices for the drugs they sell. Because of this monopoly, the cost of obtaining marijuana through these legal channels has gone up exorbitantly. Some patients are being charged as much as $12 per gram for their medical marijuana. Others have estimated their medication to cost them as much as $30,000 a year. 

Although every Canadian province has a sponsored health plan that provides free health care, in most cases, it doesn’t cover prescription medication.  While most people are part of group health insurance plans, they only cover the cost of prescription medications that have a Drug Identification Number (DIN).  As explained above, the problem with medical marijuana is that it’s not considered by Health Canada to be a mainstream treatment drug and doesn’t have a DIN. This makes it ineligible to be included in current health insurance plans.

Things Might Soon Change for Patients Medicating with Marijuana

As of 2014, Health Canada states the number of Canadians using medical marijuana has grown to approximately 40,000, and the government expects that number to increase as much as tenfold in the next decade. This may not have been on the minds of plan sponsors in the past, given that it was a niche group controlled by Health Canada, however, when we are looking at possibly hundreds of thousands of Canadians in the future on an open market, that will change.

Recently, a university student in Ontario may have established a precedent that could lead the way for coverage of medical marijuana by private insurance plans in Canada.

Jonathan Zaid, 22, required the use of cannabis to deal with a chronic condition known as New Daily Persistent Headache (NDPH), in which patients suffer from migraine-like pain that disrupts sleep and causes sensitivity to light and noise. Medical marijuana has been known to help ease the pain for people dealing with this syndrome.

Jonathan’s NDPH syndrome left him unable to focus on his university studies. With Sun Life Financial being the official health insurance provider for University of Waterloo students, Zaid contacted the insurer and was granted reimbursement for medical marijuana that he said cost him as much as $30 a day.

Although Sun Life Financial insisted that accepting Zaid’s claim was a special exception and that it wouldn’t offer medicinal marijuana coverage to the public in its existing health insurance plans, this landmark case has raised hopes among medicinal marijuana users that insurance carriers will soon start providing coverage for their medication.

Zaid has now started a new organization called Canadians For Fair Access to Medical Marijuana to (CFFAM) to push for more insurers to cover medical marijuana. Canada’s medicinal marijuana industry has also started lobbying for private insurers to cover medical marijuana claims like they do for other treatments.

That’s easier said than done.

With the increase in the number of medical marijuana users in Canada, and the cost of medical marijuana at the heart of an ongoing legal battle between patients and the federal government, if even a fraction of users begin claiming these medication costs, insurance carriers will suddenly have to pay out vast sums of money in new claims.

Most insurance carriers wouldn’t be willing to sustain those levels of financial losses and will look to pass on any extra costs to their current and future clients by increasing the average costs of premiums. Raising the cost of premiums would obviously have a significant impact on the entire health insurance industry and could change the way customers approach health insurance.

Before making any changes, insurance companies need to do their market research and determine whether the demand for the inclusion of medical marijuana in current health insurance plans is strong enough and if people are willing to pay extra in order to receive coverage for medical marijuana.

For more information, please contact your Benefits Consultant, or the author of this article, Carol Parsons, Senior Benefits Consultant at 1-866-912-6926.