Home > Employee Benefits > Medical marijuana legalized in MA presents health insurance coverage complications

Medical marijuana legalized in MA presents health insurance coverage complications

potThe legalization of medical marijuana in the state of Massachusetts was indeed a triumph for many, in particular those with adverse health conditions. Currently, 20 states and the District of Colombia have legalized medical marijuana use. The medicinal properties of marijuana are said to be effective. In small, controlled doses, medical marijuana has been known to alleviate symptoms associated with severe and chronic disease such as cancer, AIDS, multiple sclerosis, pain, glaucoma, and epilepsy, among others. Marijuana can stimulate appetite and reduce anxiety associated with aggressive medical treatments. The overwhelming irony is that while individual states can vote on whether or not to legalize medical use of the drug, federal laws prohibit its use resulting in persistent access and affordability issues. 

For starters, health insurance companies generally do not provide coverage for medical marijuana, as it is a federal crime to use it. This automatically rules out coverage under federal entitlement programs such as Medicare and Medicaid. So what we find is inconsistency. There are occasional reports of medical marijuana costs being reimbursed by certain health plans, probably categorized as an ‘alternative care’ stipend for a large self-funded employer willing to take on that risk. However, you would be hard-pressed to find the same in a small employer’s fully insured plan, in any state. The fact is marijuana, like heroin, is currently classified as a “Schedule 1 Substance” under the Controlled Substances Act. This means that, according to the U.S. Federal Drug Administration, the drug has two major strikes against it: no proven medical efficacy and a high potential for abuse. In order for insurance companies to ever consider standard coverage for it, even if by state, the drug would have to be re-classified, and thus far, such attempts have been unsuccessful.

Patients with medical permission to use marijuana are spending hundreds of dollars per month, usually on the street, and many of them are too sick and impoverished to afford it. Instead, states are relying on various compassion programs facilitated through medical marijuana dispensaries, which certainly helps with distribution. Dispensaries are set up in states where medical marijuana has been legalized. They distribute the drug in many forms to those with the proper medical documentation. The drug can be provided either free or at reduced cost for those that can demonstrate need. While dispensaries of marijuana are certainly key to access and affordability, the viability of these dispensaries will be in question until federal tax codes are amended to extend favorable tax treatment to enable them to stay afloat.

Further, the passage of medical marijuana laws also presents a dilemma for physicians at federally-funded health care centers who feel that their patients may benefit from a medical marijuana use, but fear that violating a federal law would result in reduced funding. The same can be said for residents of Veteran’s Administration hospitals. If the physicians or the patients break federal laws, what will that ultimately mean for the viability of the facility? Also, physicians that currently accept federal Medicare and Medicaid payments as a large part of their practice may fall under scrutiny for prescribing marijuana use to their patients and risk being blocked from such programs.

While the legalization of medical marijuana in 20 states plus D.C., makes a huge statement of support, it’s really just a step. Several issues will need to be solved before marijuana is embraced as having true medicinal value. Given the contradictory state and federal perspective of medical marijuana, it seems that more work needs to be done to ensure that, if marijuana is legalized for medical use in a particular state, it can be legitimately accessed by those who need it without federal backlash.


About the Author

Sara LaVallee is a Senior Vice President at WGA’s Employee Benefits Practice, where she focuses on full-scale service to large groups. Her role involves the handling of all lines of coverage in an account management and retention capacity. She is also a key member of the Health Reform Advisory team at WGA.

617.646.0355 | SLaVallee@wgains.com | Connect with Sara on LinkedIn

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