A recent surge in psychedelic research has revealed that psychedelics appear capable of treating mental health conditions such as treatment-resistant depression and post-traumatic stress disorder. Although much of this research is still in its infancy, it is definitive enough that lawmakers in several states, cities and local governments are considering legalizing psychedelic treatments.
Oregon passed a measure allowing psychedelics for mental health treatments last year, and several cities, including Arcata, Ann Arbor, Denver and Detroit have passed legislation to decriminalize psychedelics. As more states and cities consider decriminalizing psychedelics, insurers and employers may have to start covering psychedelic treatments.
Dr. Bronner’s, a family-owned company that makes natural brands of soap, is among the first companies to begin offering coverage for psychedelic treatments. Company president Michael Bronner announced in early 2022 that the company would start offering ketamine-assisted therapy as a workplace benefit.
The company will partner with Enthea, which provides insurance plans for psychedelic treatments, to facilitate the benefit. After a successful seed round raise, Enthea announced in December 2022 that it would begin offering its services across 40 markets in the United States.
Liz Kost, a Dr. Bonner’s employee, took advantage of the psychedelic workplace benefit and had six sessions as soon as it was offered. She had been struggling with her mental health since the coronavirus pandemic and had seen little relief from traditional forms of therapy. Kost said that the six sessions she went through were much more beneficial compared to traditional therapy.
Unfortunately, Dr. Bronner’s is one of a very few companies that cover psychedelic-assisted therapy for their employees. Even fewer insurers provide coverage for psychedelic therapies. Kost says that she probably would not have paid for the treatment out of pocket if her employer did not offer coverage.
Field Trip, a company that provides ketamine-assisted therapy, says that patients usually see a reduction in anxiety and depression from severe to mild in around four to six sessions. But Field Trip cofounder and CEO Ronan Levy notes that insurers will often cover only the psychotherapy section of the treatment rather than the full treatment, which can cost $4,000 to $6,000.
Enthea CEO Sherry Rais observes that rather than providing comprehensive coverage for psychedelic-assisted therapy, major insurers will sometimes cover certain parts of treatment. Rais said that most employers seem to be held back from covering psychedelic therapy due to a lack of education and providers.
Ketamine is currently the only psychedelic that has been approved by the FDA to treat conditions such as bipolar disorder, PTSD, and major depressive disorder. Magic mushrooms (psilocybin) and MDMA are still in the approval process and are expected to receive FDA approval in the near future.
As enterprises such as Seelos Therapeutics Inc. (NASDAQ: SEEL) advance their R&D programs, more information will become available about the potential benefits and risks of different psychedelics. Such data may go a long way in bringing employers and insurers on board so that employees can access these therapies cost effectively.
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