Medical Marijuana Coverage Still Lost in the Legal Weeds

While there has been movement in many states, health plans would first want to make sure that they wouldn’t be breaking any law

Peter Wehrwein

If you were looking for a poster child for medical marijuana, Bill Britt might be your man. The 53-year-old Long Beach, Calif., resident was a cute, burbling 10-month-old baby when he came down with polio. The virus, which attacks the central nervous system, ravaged his body and blighted his childhood with multiple surgeries and long recovery periods in bulky plaster casts.

Grand mal seizures started when he was 18. Depression, anxiety, and chronic pain have cast their shadows over most of his adult life. And for a long time he depended on a brigade of pharmaceuticals: Dilantin for the seizures, Xanax for anxiety, antidepressants, muscle relaxants, pain relievers. It was a porous line of defense at best and mired him in side effects. But Britt says using marijuana has changed all that. Californians voted in favor of medical marijuana in 1996, but for various reasons, some of them financial, Britt says it has been only the last couple of years that he has had a steady supply. Now, instead of popping four or five pills a day, he tokes on marijuana cigarettes. His sleep has improved, he feels better physically and mentally, and he is in love with a girlfriend — although Britt doesn’t want to go overboard and credit medical marijuana for that.

But the seizures? “I used to have one or two seizures a year. But the last two years I have been seizure-free because I have enough cannabis,” says Britt, a plaintiff in a federal lawsuit that would reclassify marijuana as a less dangerous drug.

Once a fringe concern and a neverland proposition, medical marijuana is now in the American mainstream. Eighteen states and the District of Columbia have made it legal for people like Britt to use marijuana for medical purposes — a third of the United States, advocates like to point out. Colorado and Washington have abandoned the medical modifier and legalized marijuana altogether for people 21 and older.

“This issue isn’t or hasn’t been all that complicated for health plans,” says Ben Price, executive director of the Colorado Association of Health Plans: Smoked medical marijuana has not been approved by the Food and Drug Administration.

In a report issued last year, See Change Strategy, an Olney, Md., research company, estimated that 730,000 Americans have purchased medical marijuana and that over 30 times as many, 24.8 million, would be legally eligible to do so under current laws — and that was when only 15 states had medical marijuana laws on the books.

With the legal barriers falling left and right, medical marijuana has become a large, if decentralized, enterprise with a mix of activists with ’60s and ’70s counterculture roots and others in it purely for business reasons.

The market researchers at See Change estimate that the national market for medical marijuana is worth $1.7 billion a year and could be five times that in the next five years. See Change’s numbers may drift toward the high side (the American Cannabis Research Institute is a client), but nobody doubts that there’s a lot being spent on medical marijuana, especially in California where the rules for getting a prescription are the loosest in the nation.

Controlling expenses

At an individual level, Britt says he uses six pounds of marijuana a year that would cost $18,000 if he were to buy it all, but by growing his supply in a collective arrangement he is able to bring his out-of-pocket expenses down to several thousand dollars a year.

Frank Lucido, MD, a family practitioner in Berkeley, Calif., who writes prescriptions for about 1,000 medical marijuana patients, says that in his experience, chronic pain patients use one to four ounces of marijuana monthly. At $250 to $400 per ounce, the math shows that a patient’s medical marijuana expenses could be well over $1,000 a month.

What’s a health plan to do?

A medication that patients say they need. An expense that would stretch many people’s budgets. So are health care plans covering medical marijuana or at least mulling whether Mauwie Wauwie or Ganja Dwarf should be on Tier 1 of their formularies?

The short answer is no. The longer answer is that it’s not really even on the radar screen. Why? Three reasons.

First and foremost, it could be illegal under federal law for them to cover medical marijuana even if they wanted to. Right now, marijuana is a Schedule 1 drug under the 1970 Comprehensive Drug Abuse Prevention and Control Act — the Controlled Substances Act for short — a tough law aimed at clamping down on the use of recreational drugs that flowered in the 1960s.

A drug must meet three criteria to land on Schedule 1, the strictest of the five classifications, which effectively criminalizes use or possession: have a high potential for abuse, have no currently accepted medical use in treatment in the United States, and lack accepted safety for use under medical supervision. Other Schedule 1 drugs include heroin, LSD, peyote, methaqualone (better known by the brand name Quaalude), and 3,4-methylenedioxymethamphetamine, or Ecstasy. Marijuana’s Schedule 1 status extends to its seeds, extracts, oils, and resin.


It’s a confusing legal situation, to say the least, because state medical marijuana laws are in direct contradiction of it being Schedule 1 with no medical use. Justice Department officials in the Obama administration, and the president himself, have signaled that individual users won’t be targeted for prosecution, but dispensaries and other marijuana-related businesses are a different matter, and U.S. attorneys and federal agents have made arrests and taken other steps to shut them on grounds that they have overstepped state laws and are trafficking in a Schedule 1 substance.

In medical marijuana states, banks have shied away from doing business with the dispensaries out of fear that they’ll be prosecuted for knowingly accepting deposits that under federal law might be deemed as coming from an illegal drug trade.

Eric Sterling, a former congressional aide and drug law reform advocate in suburban Washington, D.C., says the general counsel at a health plan would be justified in being similarly wary unless federal law changes: “Under the Controlled Substances Act, it is possible that health plan could be prosecuted for aiding and abetting the illegal purchase of marijuana.”

Even if marijuana were reclassified, health plan coverage would probably not be forthcoming without FDA approval. After California, Colorado is probably the state where medical marijuana has made the biggest impression, and Denver has emerged as a business and legal hub for medical marijuana.

But Ben Price, executive director of the Colorado Association of Health Plans, says no coverage has been a no-brainer: “This issue isn’t or hasn’t been all that complicated for health plans at this point because smoked medical marijuana hasn’t been FDA approved and is therefore a coverage exclusion for most, if not all, member contracts.”

Legal obstacles

Price also points out that section 213 (d) of the Internal Revenue Code would have to be changed for people to claim medical marijuana as an expense for flexible spending, health saving, and health reimbursement accounts.

The legal and regulatory obstacles are the direct and sufficient cause for lack of interest in health coverage for medical marijuana, but there’s another one that may be more important in the broad scheme of things: the withering skepticism about medical marijuana being anything more than a thin cover for recreational users, cases like Britt notwithstanding.

This is especially true in California, where a prescription can be written for a long list of conditions and “any other illness for which marijuana provides relief.”

Morgan Fox, a spokesman for the Marijuana Policy Project, a Washington group that lobbies for decriminalizing marijuana, says medical marijuana statutes are a way “to get the sick and dying off the battlefield of legalization,” and he challenges the suggestion of misuse. “Medical marijuana is not a scam if you are dying from cancer and there is something you can take that allows you to eat and stay awake instead of turning you into a zombie, which can occur with the opiates.”

Bothered by subversion

Sterling, the drug law reform advocate, doesn’t disagree. But Sterling, who is president of a mini-think tank called the Criminal Justice Policy Foundation, says he is bothered by the subversion of medical marijuana in California. During a visit to Venice Beach in November, he says, he was stopped five different times on the street by people asking him whether he “wanted to get legal” with a prescription for marijuana. “What we have in California is a de facto social use of marijuana by some doctors selling their recommendations,” he says. “As a consequence, the bona fide patients are mocked.”

On its face, it doesn’t make much sense for marijuana to be relegated to Schedule 1 along with heroin and LSD. The data aren’t perfect, but there is evidence that marijuana is medically useful. In 2009, when the American Medical Association reversed its position and came out in favor of making marijuana a Class 2 drug, the resolution pointed to short-term trials indicating that it can reduce neuropathic pain, improve calorie attack in people sick with AIDS and other muscle-wasting conditions, and relieve the spasticity of multiple sclerosis.

Marijuana’s potential for abuse is controversial, but it’s surely no worse than morphine, opium, codeine, and the stimulants (amphetamine, methamphetamine) in the Schedule 2 category. Going back decades, activists have petitioned the Drug Enforcement Agency (DEA) to reclassify marijuana with these and other sorts of arguments, but to no avail.


Sterling says no matter what the evidence, the DEA is unlikely to reclassify marijuana on its own. In his view, ultimately, it is going to have to be a political decision. The latest rejection came in June 2011, nine years after the petition was filed. The lawsuit that Britt is part of is challenging that decision in federal court.

Someday, though, these may be viewed as the dark ages of marijuana when smoking was a crude delivery system for a substance that contains hundreds of compounds. Identifying cannabinoids — chemicals special to marijuana — led to the discovery of cannabinoid receptors, not just in the brain but also in the gut, liver, and immune system. That, in turn, led to the discovery of endogenous substances that turn those receptors on and off. A whole new avenue of drug development has opened up.

Drugs based on marijuana’s well-characterized cannabinoids are already in use, although they’ve fallen short of high expectations. Dronabinol (Marinol), a synthetic THC, the main psychoactive agent in marijuana, and nabinole (Cesamet), a synthetic analog of THC, were approved by the FDA over 30 years ago as antinausea medications, but are second-line drugs.

Rimonabant is an appetite suppressant that never got FDA approval. There are high hopes for nabiximole (Sativex), a pain drug delivered as a mouth spray that is approved in Canada but not in the United States. It pairs THC and cannabidiol, a cannabinoid that may counteract the anxiety and paranoia that THC can produce.

Britt is intrigued by nabiximole. For him, regular access to marijuana has been something of a cure-all. Whether it is marijuana or drugs derived from it, he thinks it could be useful to many people like him.

“We could probably get rid of 50 percent of prescription drugs with cannabis-based medicine.” Of course, he not a researcher, a physician, or a pharmacist.

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