Attention electric lettuce tokers: there’s no need to trip out over whether or not your marijuana habits classify you as a “smoker,” as two of Canada’s largest insurance providers say they won’t hold it against you.
In a first for the country, BMO and Sun Life announced this week that they’ll no longer be calling on marijuana smokers to tick the “smokers” box on the life insurance questionnaire, reversing the long-standing policy that using the plant was on par with tobacco. It’s a coup for medical marijuana users given that smokers can pay anywhere from 30 to 50 per cent more in premiums.
“In our industry, we keep up to date with medical studies and companies update their underwriting guidelines accordingly,” Sun Life said in a statement to brokers highlighting the policy change. “As a result, people who use marijuana are now assessed … at non-smoker rates, unless they also use tobacco.”
While it’s easy to also draw lines between the announcement and the Federal government’s plans to legalize marijuana, Paul Grootendorst, an expert on insurance and reimbursement and director of the division of social and administrative pharmacy in the Leslie Dan Faculty of Pharmacy at the University of Toronto, says the decision is far more likely rooted in the bottom line.
“The insurance industry is not in the business of making moral judgments about acceptability of marijuana use,” he says. “Instead it’s concerned about the risk that they face when they accept a new customer.”
Smokers are more apt to assume health risks as a result of their habits, making pay-outs higher than if the companies were insuring someone who’s healthier.
“What this tells me is that they have done their research, examined the evidence and concluded that the patterns of risk associated with typical marijuana use is much lower than that of typical tobacco use,” he says. “As well some marijuana users will be ingesting it in food or they might be using a vaporizer – in my mind it’s purely a business decision to price insurance policies as competitively as possible to gain more business.”
In terms of specifics, Sun Life has opted to classify all marijuana users who don’t smoke tobacco as non-smokers, while BMO’s policy will limit the status to those who smoke up to two “marijuana cigarettes” per week.
Grootendorst says that while he’s not too sure how other insurers will deal with these policy changes, “it’s possible they would also limit consumption.”
“As we saw from the action in federal court, the constitutional challenge Allard et al. some individuals smoke over ten grams per day,” he says. “By my calculation they had to be smoking almost continuously… obviously that’s going to cause problems.”
And it’s these sort of problems that could hurt the insurance companies’ bottom lines.
“But if you’re getting life insurance, typically there’s underwriting which means the insurer will have other measures of your health so people who are using a high dosage of marijuana are obviously more exposed to the smoke and will (likely) be flagged to be high risk through other means,” says Grootendorst adding that that would lead to their premiums being adjusted anyways.
While the insurance and reimbursement expert says natural competitive behaviour could draw some reaction from BMO and Sun Life’s counterparts, it’s still difficult to speculate.
“Maybe BMO and Sun Life are wrong… the evidence could be wrong or limited so maybe others will be more cautious and wait a until new evidence arises,” says Grootendorst. “They have good experiments happening in Colorado and Washington state right now where rates of use have increased – maybe (the insurance companies) will use that as a test bed to see the impact on mortality rates.”