Canadian Companies Add Cannabis Coverage to Health Insurance

After injuring his back while working as an elevator mechanic, Wayne Skinner suffered from chronic back pain for more than six years. After he found relief through prescribed medical marijuana, he asked his union, through its trust fund, to cover the costs. Skinner fought for what he saw as his rightful coverage, but was turned down three times.

Some believe it’s only a matter of time until medical cannabis coverage becomes a normal part of health insurance in Canada.

Skinner’s odyssey finally ended earlier this year when a human rights board in his home province of Nova Scotia determined that the fund should cover his costs. In January, the board ruled that denial of his request for coverage amounted to a prima facie case of discrimination.

Skinner, 50, was elated. “Hopefully this will help other people in similar situations and eliminate the fight that myself and my family have had to endure, and the hardship that this has resulted in,” he told the CBC.

A number of medical marijuana advocates see the ruling as a bellwether. They believe it’s only a matter of time until broad-ranging coverage of medical cannabis becomes a normal part of every health insurance policy in Canada.

Covering now, dispensing soon?

In fact, an enormously symbolic change occurred just last week. Loblaw Companies, which owns the supermarket chain Loblaws and the drug store chain Shoppers Drug Mart, announced that employee benefit plans would include coverage for medical marijuana. Loblaw Co. and its various subsidiaries employ nearly 200,000 Canadians. The announcement represents the largest corporate acceptance of medical cannabis in North America.

The announcement by Loblaws was a major policy change but it wasn’t completely surprising. Galen G. Weston, Loblaws president and executive chairman, said last year that he could envision his company’s retail outlets dispensing medical marijuana in the near future. “We’re an industry that is extremely effective at managing controlled substances,” Weston said after the company’s general meeting in May, 2016.

Canada’s publicly funded health care system provides individuals with preventative care and medical treatment from primary care physicians along with access to hospitals and important medical services. In some cases, coverage for prescription medication is available through public programs. But the vast majority of Canadians must pay for it out of pocket or through private health insurance. About two-thirds of Canadians have some form of private health insurance.

Waiting for a DIN for Canadian cannabis

Health Canada allows certain companies (known as licensed producers) to grow medical marijuana and distribute it to individuals who have prescriptions from their doctors. But the agency hasn’t given cannabis a Drug Identification Number (DIN), which means it isn’t considered a fully approved medicine, and isn’t automatically included in drug formularies. The DIN functions as the  government’s seal of approval, and without it a drug is not regarded as legitimate by insurers.

Insurance companies already provide some coverage of medical marijuana through Health Care Spending Accounts — accounts in which a set amount of money is provided to an employee for coverage of medical and dental expenses. But only a small minority of the population maintains those accounts.

The majority of Canadians can’t get reimbursed for the cost of medical marijuana because insurance companies don’t cover it as standard practice.

Growing interest and receptiveness

Advocates are making inroads, however. As evidence of marijuana’s medicinal value mounts, a growing number of patients see it as a viable alternative to traditional medication and, consequently, an increasing number of plan sponsors and insurance companies are looking into it.

Some of them have been considering medical marijuana claims on a case-by-case basis in recent years, and a handful of individuals have been granted coverage.

Jonathan Zaid, a student at the University of Waterloo, made national headlines in 2015 when he persuaded his student union, which sponsored his health insurance plan, to ask insurance underwriter to change its position and cover the cost of the cannabis he had been using to treat a neurological condition that causes constant headaches. Sun Life Financial ultimately agreed to reimburse him $3,000 to cover the costs of the prescribed cannabis and a vaporizer.

Zaid’s experience led him to become a medical marijuana advocate. He launched the non-profit organization Canadians for Fair Access to Medical Marijuana, and he took a seat on the patient advisory board of a licensed producer.

“My case was one of the first [in which an insurance provider agreed to cover medical marijuana]. After that we started to see more openness to it,” he told Leafly. “Mr. Skinner’s case was a human rights issue. That speaks to how seriously employers and other plan sponsors need to consider covering medical marijuana.”

Zaid takes the Loblaws/Shoppers Drug Mart announcement as a sign of that seriousness. “Seeing a large, respected employer take proactive steps to include medical cannabis on the employee benefits plan further demonstrates how medical cannabis can be covered and speaks to the legitimacy of its use as a medicine,” he said.

‘Smooth system’ ahead

Deepak Anand, executive director of the Canadian National Medical Marijuana Association (CNMMA) says that at least a dozen individuals have reached out to his organization in the past three months. The CNMMA has provided them with information about regulations and, in some instances, has spoken to their employers.

The CNMAA has also provided information to about two dozen employers in the past three months, seeking input on matters related to marijuana coverage.

Joan Weir, director of health and disability policy at Canadian Life and Health Insurance Association (CLHIA), says her organization is now providing members with a steady stream of information about medical marijuana. “All our members are interested in examining the subject,” she says. “They are expecting more of their sponsors to request that medical marijuana coverage be included in their plans.”

Anand, Weir and others close to the subject believe it’s only a matter of time before Canadians commonly secure coverage of medical marijuana through insurance providers. As researchers learn more about cannabis, and more clinical trials indicate that it has medicinal value, more physicians and government officials will get onboard — and Health Canada will give medical marijuana a DIN. When that happens, advocates say, Canadian insurers will add some formulation to their drug benefit plans.

“I see a fairly smooth system of supply and demand five or ten years down the road,” says Weir. “I suspect that will lead to medical marijuana being added to plans as a standard benefit.”