Psychedelic Therapy Providers: Risk Management Perspective From A Cannabis Insurance Specialist

Despite the numerous existing and ongoing studies pointing to psychedelic-assisted therapy's effectiveness, the regulatory and political concerns are yet to be resolved.

Holistic medicine and wellness space insurance broker AlphaRoot’s managing director, Isaac Bock, spoke to Benzinga about the need for rules and potential outcomes on these therapies. 

AlphaRoots has and still does place coverage for both in-person and telehealth companies offering ketamine therapy, “a little bit easier” considering current federal regulations and that it is a non-narcotic, Schedule III drug. Nonetheless, Bock says it’s still “much more restricted” than traditional telehealth companies, so “there's not as much appetite from an insurance carrier perspective.”

Below is a conversation on key insurance aspects concerning the psychedelics industry.

Coverage Variability & Availability

Insurance coverage typically spans through all lines, depending on the company’s operations. The biggest one is medical professional liability with specific policy language on issues like malpractice and how it affects each person involved. 

“There's a lot of underwriting requirements that go into understanding who's going to afford it or not, but for most other lines of coverage, it's not an issue,” Bock explained, using the example of ketamine providers insurance. “A lot of carriers are open to it on things like directors and officers insurance, cyber, making sure it's really the general liability. Backup professional liability is the hardest to place, having the most restrictions.”

See Also: Healthcare Providers Can Offer Ketamine Treatment On Employee Insurance Plans

On the other hand, insurance availability “definitely” varies regarding the treatment offered. in the case of MDMA and psilocybin therapy, psychedelics, which are federally illegal right now (state-level exceptions in Colorado and Oregon aside) he says there are very few carriers who can offer these types of policies related to general and medical professional liabilities.

See Also: Shaping Federal Policy Around Psychedelic Therapy: APPA Teams Up With Daschle Group

In Oregon’s case, insurance companies are aiming to get the policy language to work to actually cover the existing needs. For instance, a sister organization to AlphaRoot is working on a product specifically for facilitators. 

Yet despite the constant conversations toward building programs together with lawyers, Bock says the placement of insurance right now is a barrier and is limited due to the restrictive policy available. The state’s minimum premiums are high, nearly $5,000 yearly to get insurance just for a small individual facilitator. 

“That's a huge expense, especially when they're not really making a lot of money off of this currently,” Bock explained. “So that's something we're looking into, kind of product liability type coverage for individuals who are actually growing it themselves. It's definitely a work in progress.”

Next up, Part 2 - Insider’s Look At Psychedelics Industry On Risk Management, Gray Market & Cannabis Industry Relates

Photo courtesy of AlphaRoot.