Home Health Care Should Employers and Insurers Cover Psychedelic-Assisted Therapy?

Should Employers and Insurers Cover Psychedelic-Assisted Therapy?


Liz Kost, an employee at soap company Dr. Bronner’s, was stuck in a difficult place mentally after the Covid-19 pandemic hit. She tried traditional forms of therapy, such as talk therapy, but it was a slow process.

“When you’re in a trauma loop … you sort of wake up every day feeling crummy,” Kost said in an interview. “You go to bed feeling crummy and you just can’t take yourself out of it.”

Then, at the beginning of 2022, Michael Bronner, president of Dr. Bronner’s, announced that the company would begin offering ketamine-assisted therapy to employees as a workplace benefit. This would occur via a new startup called Enthea, a third party administrator for psychedelic-assisted therapy. Kost jumped at the opportunity to receive the treatment and went for six sessions. That benefited her more than any traditional forms of therapy did, she said.

Ketamine-assisted therapy is often given in the form of lozenges, nasal spray or injections. Patients typically lie down, listen to soft music in the background and wear an eye mask. The drug can put patients in a trance-like state, which can relax them and allow them to address difficult emotions. 

Dr. Bronner’s move to offer this benefit is an outlier, however. Despite ketamine-assisted therapy being approved by the Food and Drug Administration for several mental health conditions, most employers and insurance carriers don’t cover the treatment — which can cost thousands of dollars. It’s also an emerging part of healthcare that not everyone is familiar with yet. That was true for Kost too.

“I had never done [psychedelics] before,” Kost said. “I wasn’t privy to that world … It’s expensive and I don’t think I would have paid for it out of pocket because there are [other] things that we have to pay for in this life.”

But perspectives around psychedelics and its benefits for mental health are changing. While psychedelic-assisted therapy is in a transition phase right now, several experts foresee it becoming a more mainstream healthcare benefit down the line.

The benefits of psychedelic-assisted therapy

Currently, ketamine is the only psychedelic that has FDA approval for conditions including major depressive disorder, bipolar disorder and post traumatic stress disorder. However, MDMA, also known as ecstasy, and psilocybin mushrooms are currently in the process for approval and likely won’t be far behind.

The treatments are showing promising results. A study conducted by Vancouver Island University Health and Human Services on ketamine found that 91% of participants showed improvements in generalized anxiety and 79% showed improvements in depression. A study on MDMA conducted by researchers at MAPS Public Benefit Corporations found that 67% of patients no longer met the criteria for PTSD a year after treatment. With psilocybin-assisted therapy, 80% of cancer patients reported significant decreases in depressed mood and anxiety, researchers at Johns Hopkins found. 

One company that provides ketamine-assisted therapy is Field Trip, which has nine locations in the U.S. and Canada. Ronan Levy, co-founder and CEO of the company, said that on average, its patients see their depression and anxiety go from severe to mild after four to six sessions, with benefits lasting six months or longer. 

Field Trip patients begin with an assessment to determine if they’re a good fit. Despite ketamine-assisted therapy being quite safe, it’s not for everyone, such as those who have severe schizophrenia. If the patient is determined to be a good fit, a prep session with the therapist takes place, which is usually done virtually. Then they come in for their first ketamine session, which typically lasts about an hour to an hour and a half. As emotions and insights come up, patients can share those with their therapist, who will document the feelings. Typically patients will do two ketamine sessions in a week.

The following week, no ketamine is administered during a so-called “integration session,” just psychotherapy.

“The thesis there is, during the ketamine experience or any psychedelic experience, a lot of emotions, insights and awareness come up,” Levy said. “There’s emotional processing that happens, but there’s also neuroplasticity. There’s a period when you’re actually much more able to adopt new perspectives, new habits, new awareness … In those integration sessions, we’re really trying to take the neuroplasticity and turn it into action, create behavior change, outlook change. That’s the trip.”

Kost went through a different type of treatment called ketamine infusion therapy, which is administered through an IV infusion in the arm.

“It’s just a very inward experience,” she said. “You’ve got headphones on, a blindfold and it’s a very personal experience.”

Then a few days after, Kost had a talk therapy session where she discussed the feelings she felt with her therapist.

For Kost, the treatment was able to help change her negative thoughts.

“It helps kick you out of that [trauma loop] and see things in a different perspective,” she said. “You sort of get more of a bird’s eye view of life in general and you feel more connected to people around you and to this planet and to all things … It’s a really sort of introspective experience. It dissolves the ego, all those negative thoughts in your mind of ‘I’m lame. I’m stupid. I’m dumb. I can’t do this. I suck.’ It shuts that down so that you can just really see yourself for who you are and you start to see things a little differently.”

Where do employers and insurers stand?

Currently, there isn’t “comprehensive coverage” of psychedelic-assisted therapy that covers the entirety of treatment, according to Sherry Rais, CEO of Enthea. Rather, there are one-off cases where occasionally parts of the treatment will be reimbursed by major insurers.

Rais’ comments were echoed by Levy of FieldTrip, who said that sometimes patients will get reimbursed for the psychotherapy components of the treatment through their health plans, but not the entire treatment. Rather than work with insurers, the company sells directly to consumers, with treatment ranging between $4,000 to $6,000.

“Truthfully, it’s not inexpensive, and without insurance coverage it’s a significant chunk of cost,” Levy said. “If you look at the correlation between depression and employment and income, unfortunately, the people who need it most are often the people who are least able to afford it.”

That’s where Enthea is stepping in. The company, which was founded in 2019, works with self-insured employers to offer insurance coverage for ketamine-assisted therapy and provides access to a network of providers. Its first employer customer was Dr. Bronner’s in early 2022. Since then, the company has raised $2 million in seed funding — led by psychedelic venture capital Tabula Rasa Ventures — and announced contracts with a few other employers, including Daybreaker, Tushy and Guinn Partners.

When asked what’s holding employers back from covering psychedelic-assisted therapy, Rais responded that in Enthea’s experience, nothing seems to be — other than the lack of providers and education.

“What’s been holding [employers] back is no one’s been offering it, other than Enthea,” she claimed. “We’re a company of seven people that just got funded. So we’re growing as fast as we can and working as fast as we can, but there’s definitely a lot of work to be done … Of course, some companies don’t have the right education on the effectiveness of ketamine-assisted therapy. But I feel very confident that when we approach companies and show the evidence and we show them the benefits, there isn’t much holding them back.”

The startup currently has letters of intent from 42 companies, and has received interest from several Fortune 100 companies, though Rais declined to say which ones.

Another expert also believes employers will come around, though the approach they take might be different than the one that Rais is envisioning.

Jeff Levin-Scherz, population health leader at consulting firm Willis Towers Watson, foresees psychedelic-assisted therapy being something employers are interested in, though he anticipates most employers adding it to their medical plan as opposed to offering it as a workplace perk with a vendor like Enthea.

“We haven’t had a new class of medicines to treat depression for decades,” Levin-Scherz said. “Having a new promising class of drugs could be life-changing for many people, life saving for some people and certainly that is something employers will want.”

The benefit of ketamine-assisted therapy — whether it be through a medical plan or an employee benefit plan — will be hard to ignore if Kost’s experience is replicated with large groups of people. 

Since receiving psychedelic-assisted therapy, her productivity has greatly improved in her job at Dr. Bronner’s, she said.

“It’s hard to work when you have other thoughts in your mind,” Kost said. “When you’re depressed or struggling mentally, it’s really hard to focus at work. I feel like I’m less impulsive now, less brain fog, more focused on work.”

With one in five Americans experiencing a mental illness, employers are tackling burnout, absenteeism and turnover, which is leading to loss in productivity and high costs. Kost’s experience with ketamine-assisted therapy should be music to employers’ ears assuming larger evidence can be developed.

Large insurers, meanwhile, are a different story, Rais said.

“They’re so large, it’s hard to act fast. They’re not experts in the psychedelic space … They’re just not familiar and it’s going to take them more time to become familiar with the material and build out the policies in the way a large organization does,” she said.

While psychedelics may not be mainstream yet, Rais feels confident that they will be in the near future, especially as more drugs become approved.

“I think three years from now, this will become a very mainstream benefit … If you look at how psychedelics have transformed in the past three years until now, it’s just an incredible boom,” she said.

Photo: SIphotography, Getty Images

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