Health Coverage of Medical Pot Remains Unlikely, Despite Demand

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By Jacklyn Wille

U.S. employers and health plans aren’t following the lead of their neighbors to the north by covering medical marijuana.

Though more than half of U.S. states have legalized it, virtually no U.S. health plans offer medical marijuana as a coverage option. What’s preventing health plans from covering the drug? Marijuana use is still illegal at the federal level, attorneys told Bloomberg Law.

Things are different in Canada, which legalized medical marijuana in 2001 and has promised to lift bans on recreational marijuana as early as this summer. In the past year, an Ontario labor union and a large food and pharmacy retailer became some of the first Canadian health plan sponsors to cover medical marijuana. Canadian insurer Sun Life Financial recently announced plans to add medical marijuana as a coverage option in its group benefit plans.

Demand for coverage in the U.S. appears to be growing, particularly in response to the ongoing opioid crisis. Recent research shows opioid prescriptions are down 14 percent in states where medical marijuana is legal, suggesting the drug could play a role in the fight against opioid addiction. And a 2013 paper in the New England Journal of Medicine found that 76 percent of doctors surveyed supported the use of marijuana for some medical purposes.

Even so, insurance and health plan coverage for medical marijuana is unlikely without a substantial shift in the federal government’s approach to the drug, attorneys told Bloomberg Law.

“Because it’s illegal at the federal level, it creates a lot of problems for an ERISA plan,” Sam Schwartz-Fenwick, a partner in Seyfarth Shaw’s Chicago office who focuses on employee benefits, told Bloomberg Law.

Barriers to Coverage

Despite demand and legalization efforts at the state level, federal law remains a huge barrier to widespread insurance coverage for medical marijuana, Schwartz-Fenwick said.

The federal government classifies marijuana as a Schedule 1 drug, which means it has a high potential for abuse and no accepted medical benefits. The Food and Drug Administration hasn’t approved marijuana as a safe and effective drug for any reason. And the Internal Revenue Service doesn’t recognize marijuana as an approved medical expense—meaning that any reimbursement made by a health plan for the drug likely would be taxable to the patient receiving it.

Because it’s illegal at the federal level, marijuana can’t be studied by medical researchers in the same way that legal drugs can, Schwartz-Fenwick said. That presents another obstacle to health insurance coverage: The lack of research into marijuana’s effectiveness means patients are unlikely to show the drug is a medically necessary treatment option that should be covered by insurance.

“Doctors are increasingly recommending that patients suffering from certain injuries or impairments use medical marijuana,” Schwartz-Fenwick said. “It’s also seen by some doctors as less dangerous for pain management than opioids. The risk, though, is that it’s still classified as a Schedule 1 substance and it hasn’t been approved by the FDA.”

In its early days, medical marijuana was recommended as a treatment for a narrow set of serious conditions and terminal illnesses, Albert B. Randall Jr., a Maryland-based attorney and head of the labor and employment practice group at Franklin & Prokopik PC, told Bloomberg Law. In recent years, marijuana has been suggested to treat a wider—and less serious—array of conditions, including chronic pain and chronic soft tissue injuries, Randall said.

Using marijuana for other medical conditions has led critics to suggest it’s become a cover for recreational drug use, Randall added.

Feds Run the Show

The federal government is unlikely to loosen its stance on medical marijuana during the current presidential administration, Schwartz-Fenwick said.

Before President Donald Trump’s election, “there was a bipartisan movement to change our criminal statutes, and a lot of people were talking about federally decriminalizing marijuana,” Schwartz-Fenwick said. “Those discussions have really stopped, and the administration is very opposed to that right now.”

“It would really take a new administration before there would be any change or shift at the federal level,” he added.

Even so, the momentum and popular support for medical marijuana means that legalization at the federal level is likely to happen at some point, Randall said.

“It’s no longer just a possibility,” Randall said. “I think it’s a probability.”

Baby Steps in Court

Health coverage of medical marijuana hasn’t been tested in the courts, but a trio of recent decisions out of New England suggests some courts may be softening their views on medical marijuana more generally.

The Massachusetts Supreme Judicial Court recently sided with an employee who was terminated for using medical marijuana to treat her Crohn’s disease. The employee made a valid claim for handicap discrimination under Massachusetts law, the court said, because the use of medical marijuana wasn’t an unreasonable accommodation for the employee’s handicap.

A Rhode Island trial court made a similar ruling, green-lighting a lawsuit by a woman who said she was passed over for an internship because she used medical marijuana. And a federal district court in Connecticut allowed a medical marijuana user to sue an employer for rescinding a job offer based on her use of the drug.

These decisions, all released in 2017, represent a significant change in how courts have traditionally looked at marijuana use in the employment context, Randall said. And shifting judicial attitudes toward medical marijuana could pave the way for changes in federal policy and, ultimately, the possibility of health plan coverage.

“By the time there’s a schedule change at the FDA, it’ll probably take health carriers a little longer to be able to implement things,” Randall said. “There’ll be a lag time, but with the rapid expansion of medical marijuana laws and recreational laws, I think we’re probably looking at sooner rather than later.”

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