Health & Wellness

Health Insurance Coverage for CAM

By MSF Staff
What can one expect in health insurance coverage for Complementary and Alternative Medicine (CAM) in the future? A survey conducted by Landmark HealthCare from November 1998 to January 1999 found that 85 percent of health maintenance organizations (HMOs) believe that the relationship between alternative and allopathic (traditional) medical care will continue to grow.
Because some health conditions such as chronic pain, disabilities of various origins, and stress may be adequately treated with CAM modalities, consumers will demand greater CAM coverage within their health insurance plans. Recent surveys suggest that consumers are willing to pay out of pocket for CAM and other services that enhance their quality of life, making reimbursement by health insurance less critical. However, there is a general perception that a therapy is legitimized by its inclusion in health insurance policies. Reimbursement puts a stamp of approval on a service and may significantly increase revenues. Health insurance coverage also reflects the level of acceptance within mainstream medicine and among the U.S. public.
The consequences of including CAM services in health insurance plans are unknown and require careful consideration. Will CAM coverage be used simply as a marketing tool for the recruitment of customers while the actual CAM services provided are minimal? Is CAM being used to drive down medical costs? Herbs are less expensive than prescription drugs and acupuncture is less costly than orthopedic surgery. However, the autonomy of the CAM practitioner may be constrained, as many allopathic physicians can attest, in the current managed care environment. Although attendance at a standardized training program, board certification, provider credentialing, practice and procedural guidelines, standardized billing codes, medical record documentation, and continuing education may be necessary for health insurance coverage; however, they do not guarantee coverage. Moreover, these requirements will likely increase the cost of CAM services.
Some agree that patients use CAM because they find new healthcare alternatives to be more congruent with their values, beliefs, and philosophical orientation toward health and life. An individual may favor CAM for the spiritual benefits and the attention paid to emotional states and behavior patterns. Will these qualities change if CAM services are covered by health insurance and under the jurisdiction of managed care organizations?
It is estimated that Americans made more than 600 million visits to CAM practitioners in 1997, compared with approximately 400 million visits to all primary care physicians during the same year. CAM professional services exceeded $21 billion with approximately 60 percent paid out-of-pocket. One study suggested that CAM services have a growth rate of close to 30 percent per year. This information indicates a CAM market that is significant in size, utilized by a major segment of the population, and undergoing unparalleled growth. Insurance coverage for allopathic medicine has been well studied and reported; similar reports on health insurance coverage for CAM have been few in numbers.
Is it better to take a laissez-faire approach to CAM coverage and keep overall cost low, or to increase regulation and obtain reimbursement privileges at a higher price? The answer probably will depend on the modality and the risk benefit ratio. In a modality such as acupuncture the potential risks are higher (such as infected needles) whereas in meditation the risks are minimal.
Then there is an unavoidable issue of the additional costs incurred in covering CAM services. Employers and employees may not be willing to pay for the additional cost of CAM services in addition to the already costly conventional medical services. Three things may be necessary to overcome these obstacles: CAM utilization is shown to reduce the utilization of medical services; CAM is legislatively mandated; or an exceptional employer/employee group with a special affinity toward CAM services requests coverage.
(Last reviewed 7/2009)