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Paying for Alternative Medicine: The Role of Health Insurers

St. John's University

In the early 1990s, Americans spent an estimated $27 billion on alternative medical treatments. However, most of those expenditures were paid out of pocket rather than by health insurers. This article reviews empirical studies of third-party coverage of complementary and alternative medicine (CAM) and the factors behind the reluctance of health insurers to provide benefits for those treatments. This reluctance is based on three principal factors: a lack of scientific evidence supporting CAM providers' claims of medical efficacy, the absence of credentialing standards for many CAM providers, and difficulties in fitting CAM treatments into typological schemes that determine levels of reimbursement by health insurers. Possibilities for overcoming these obstacles to the integration of CAM into the American system of health insurance are discussed.

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