Marijuana Reimbursement Claims Highlight How Pot Could Be Gold for Employers

A medical billing company may be blowing smoke, but could reimbursing patients for medical marijuana lower drug costs for employers?
By Jeremy Smerd, Workforce Management Online, July 2009

In mid-June, Rhode Island became the third state to legalize the sale of marijuana for medical use, giving momentum to advocates who believe the legalization of the drug offers a dose of sanity for the nation’s costly health care system.

Now that more states are legalizing the sale of the marijuana used solely as a medicine, the next hurdle for reformers who say the drug is more cost-effective than pharmaceuticals is getting those who pay for health care—insurers and employers—to reimburse patients for its use.

“It’s going to take an employer that says, ‘We’re not interested in marijuana as a gateway drug or any of that reefer madness. We want to talk about dollars and cents,’ ” says Allen St. Pierre, executive director of NORML (the National Organization for the Reform of Marijuana Laws). “If the idea here is saving money, then there’s no question that medical marijuana should be part of the ambit of choices that doctors, patients and employers can have.”

The effort to legalize the sale of medical marijuana has focused mainly on whether the medical effectiveness of the drug justifies making it legal to obtain in plant form. The medical benefits have been most closely tied to treating weight loss, nausea, pain, inflammation, spasticity and other symptoms associated with cancer, AIDS, cerebral palsy, muscular dystrophy and arthritis.

Advocates for its legalization say its medical benefits should be made available to ease the suffering of patients. In a nod to the plant’s medicinal powers, pharmaceutical companies have produced synthetic forms of some of its active chemicals.

Less attention, though, has been focused on whether paying for patients’ medical marijuana is a cost-effective way to manage certain illnesses. Advocates argue that marijuana is an effective medicine that can also be a cost-effective alternative to pharmaceuticals.

Reimbursing patients who use it could push them away from otherwise costly drugs that some advocates say are not as effective. Employers, as payers of health care, should champion the legalization of medical marijuana as a potential cost-saving tool, advocates say.

Despite the recent legislative victories, however, even employers that want to reimburse patients who use medical marijuana cannot.

Stephen DeAngelo, chief executive of Harborside Health Center, a medical marijuana dispensary in Oakland, California, has tried to provide a medical marijuana benefit through the health plan he provides to his 67 full-time employees.

“Blue Cross Blue Shield will not reimburse for medical marijuana; we checked,” he says. “It’s illegal under federal law and they can’t do anything that will break federal law.” Instead, he provides his employees, all of whom are medical marijuana patients, with a free gram of marijuana for every shift they work, a policy he says has lowered his company’s health insurance costs. “Many of these patients had drug bills of several hundred dollars a week before they began using medical marijuana,” he says. “Now they are about $40 or $50 a week.” (more…)