3 Health Insurance Paths For Psychedelic-Assisted Therapy

By: Jeffrey Lynne April 13, 2024 1:24 am

Time to read: 5 Minutes

By: Laura Stinson, University of Miami School of Law (2L)

Within recent years, the healthcare sector has seen a “Psychedelic renaissance” in that some mental health diseases are being treated by way of psychedelics. Additionally, the advancement of other drugs like MDMA, Psilocybin, and LSD have also been identified as potential treatments for mental health disorders and are currently advancing through the full stages of the US Food and Drug Administration (FDA) research.

Most recently, a not-for-profit trade association in Canada called PsyCan approved the expansion of insurance coverage for psychedelic-assisted therapy. This expansion was led by Alberta Blue Cross and aimed to cover psychedelic-assisted therapy in all its forms. Currently, within the United States, third-party administrators of health insurance plans offer psychedelic therapy coverage as an “ancillary benefit.” Such a benefit would be similar to additional dental or vision coverage through an employer. Medical professionals have diagnosed that such treatment for depression is Ketamine-assisted therapy. Specifically, this Ketamine therapy is Spravato and is a spray approved for treatment-resistant depression. The singular health insurance that covers such treatment is Enthea. 

Many commentators suggest that as the above-listed drugs advance through FDA approval steps, companies like Lykos and Compass Pathways, would be wise to engage with insurers to inform them of the benefits their patients would receive through these therapies. Such benefits include treatment for PTSD and psychosomatic diseases. Commentators also state that it is important for such companies to understand that with the approval of these new drugs, new price tags will also be high, leaving a strong need for health insurance cooperation.