Addresses Competitive Assessment With The Bigger Insurance Companies
MIAMI, June 5, 2018 /PRNewswire/ --
Novus Acquisition and Development, Corp. (OTC Markets: NDEV), through its wholly owned subsidiary WCIG Insurance Services, Inc., is a diversified insurance entity in health, liability, annuity and accident, and, the nation's first carrier/aggregator offering a cannabis health plan, is please to announce their roll out assessment of Novus Cannabis MedPlan in Canadian marketplace.
Countries that have legalized cannabis for medical use are looking to Canada as a model. Virtually all essential healthcare from physicians and hospitals is covered by Canada's single-payer system with the government funding about 70% of health costs and the remaining 30% financed by private insurance carriers. Canada's single-payer system does not cover home care, dental plans, prescription drug plans and medical cannabis.
Now with cannabis regulations all but sealed by legislation, Novus can cover the gaps and fulfill a value proposition in pricing and offer no restrictions to the consumer. Our analysis is as follows:
Competitive Assessment:
Early announcements from major Canadian health carriers will now cover Group Plans where employee benefits will have $1,500-6,000, per year of medical marijuana paid for by their plan and the premiums paid for by employers. With the legalization of Canada's recreational market in July 2018, early analysis indicates the private insurance sector feels secure making commitments to this new health sector. It is likely that more companies will follow this trend as medicinal cannabis use becomes more mainstream. As part of the insurance and cannabis industry for close to three years, Novus has identified four key issues impacting Canada's medical marijuana sector:
1. Employers will not add more insurance onto what they already offer employees.
Novus believes that demand for medical cannabis will be high but the market will be conditioned by cannabis not being fully covered under the single-payer system. This makes medical marijuana an ancillary expense and, according to Novus' assessment, a maximum of 20% of employers can afford this..
2. Employers are not embracing THC based cannabis for employees.
Another factor is likely to be employers wary of allowing employees to come to work with THC in their system, except for employees involved in Workers Comp issues.
3. The major insurance carriers cannot provide these benefits at a reasonable rate.
The expense ridden health carriers cannot provide good value medical marijuana propositions without restrictions or how much is reimbursed..
4. Cannabis meds cannot be given without restrictions in a reimbursement model.
The actual cost of patients' medical marijuana can only be covered as the insurance provider sees fit, not the patient.
Novus Cannabis MedPlan can offer a better value option, with the lowest cost premiums to employers and employees. Only restriction on purchases are that set by the Canadian Federal Government.
The Basis For Novus' Assessment
i. Supply: Currently 104 companies are allowed to grow cannabis with less than half (48) permitted to sell dried cannabis and just 25 permitted to sell cannabis oil. Another 500 producer applications are backlogged in the first half of 2018. This indicates that even the Canadian government is anticipating a server shortage of supply that will make cannabis prices for July 2018 skyrocket until mid or a the end of 2019 when new producers can get their product to market.
ii. Insurance Restrictive Assessment To Mitigate Risk: In the current situation, the major insurance players will face challenges converting Canada's cannabis healthcare market into a value proposition for the consumer. Even mitigating risk by paying out less and only covering 10% and with limitations is not sufficient. In the long run, making cannabis reimbursements equivalent to other health service payouts is dependent on more patients entering the cannabis marketplace and we see employers being reluctant to pay for this.
iii. High Margins Consumption and Taxation: Deloitte estimated 22% of Canadians "use marijuana at least some of the time" projecting a total marijuana market size of $22.6 billion. But in arriving at these estimates, Deloitte included another 17% of respondents who said they "might" try marijuana if it was legalized, "suggesting the total potential marketplace…is close to 40% of the adult population." Coupled with taxation hitting recreational users at approximately 24% versus 10% for med users, we envision that the market can expect more conversions to medicinal marijuana. Review supporting article here: https://bit.ly/2ss0mVk
Novus Plan Of Action: The Consumer Has The Power Through Health Spending Accounts (HSA)
Novus plans to serve the patient and focus on Health Spending Accounts or HSA. An HSA allows the individuals to put money aside pre-tax to be used throughout the year on allowable healthcare needs. has's are an option for people who have enrolled in high deductible healthcare plans, allowing them to more easily pay for their out-of-pocket expenses. The accounts were developed to help reduce the cost of healthcare for both employers and individuals.
Health Canada doesn't view cannabis as an "official drug" and nor does it have a Drug Identification Number (DIN), so Novus Cannabis MedPlan will reduce the cost of medical marijuana through consumers' HSA accounts where medical marijuana is listed as an eligible expense.
Novus targets employees who are the beneficiaries of HSA's and focuses on their needs as a patient rather than insurance companies restricting how much they should purchase. There are also none of the deductibles, co-payments or annual limits on particular kinds of services that some group health plans have. In the past, there was a downside to HSA's because they were designed to deal with more of the regular, routine types of medical expenses, such as teeth cleaning, prescription drugs and new eyeglasses and not catastrophic medical issues. Now that has changed with the emergence of legal cannabis and its HSA eligibility.
Novus Cannabis MedPlan will be competitive in five ways:
i. Employers will not be burdened with increased benefit costs, even with the likely increasing cost of cannabis, given limited supplies until 2019.
ii. The best and most cost certain means of having medical marijuana covered under individual /employee benefit plans is using HSA plans to ensure the best marijuana healthcare services and their cost effective delivery as part of individual/employee benefits. Not only can customers claim a tax credit, other benefits are also available if they choose Novus' premium coverage with no deductibles, flexible med purchases, acceptance of preexisting conditions and no restrictions.
iii. Novus' limited overhead allows us to have the lowest cost per patient coverage compared to any other competing insurance plan.
iv. No need to have multiple Novus Cannabis MedPlans, one plan covers dependents with plans ranging in cost from $19.95 to $34.95 per patient per month and including any dental, vision and hearing coverage.
v. By aligning with producers that use direct delivery via courier services Novus can bypass the distributors and retailers in the supply chain and give Licensed Producers (LPs) a 150%-200% increase in bottom-line revenue while having the lowest retail market price.
In Conclusion
The power of patients/consumers who have driven the industry to this point, rather than insurance companies, cannot be underestimated. It's Novus' job to deliver legal cannabis without putting restrictions on patients, allowing them to find the meds that work for them while keeping that medicine available and affordable.
Mainstream insurance companies are only dipping their toe in the proverbial marijuana water. So far, they're approaching the medical marijuana market extremely conservatively. Once they discovered what Novus has experienced they will likely adjust their own insurance coverage to cover cannabis more fully, but are unlikely to compete with Novus' pricing.
We invite you to do your due diligence here:
About Novus
Novus Acquisition & Development Corp. (NDEV), through its subsidiary WCIG Insurance, provides health insurance and related insurance solutions within the wellness and medical marijuana industries in states where legal programs exist. Novus has developed its infrastructure within many lines of the insurance business such as, health, property & casualty, life, accident and fixed annuities.
Novus medical cannabis benefits package will work as outside developers and will not cultivate, handle, transport grow, extract, dispense, put up for sale, put on the market, vend, deliver, supply, circulate, or trade cannabis or any substances that violate the United States law or the Controlled Substances Act, nor does it intend to do so in the future and will continue to follow state and federal laws. The statements made about specific products have not been evaluated by the United States Food and Drug Administration (FDA) and are not intended to diagnose, treat, cure or prevent disease. All information provided on these press releases or any information contained on or in any product label or packaging is for informational purposes only and is not intended as a substitute for advice from your physician or other health care professional. Once a push notification is competed the transaction is solely between the state-licensed dispensary and the registered patient.
The state laws are in conflict with the federal Controlled Substances Act. The current administration has effectively stated that it is not an efficient use of resources to direct federal law enforcement agencies to prosecute those lawfully abiding by state designated laws, allowing the use and distribution of medical marijuana. However, there is no guarantee that the current administration, nor any future administration, will not change this policy and decide to enforce the federal laws strongly. Any such change in the federal government's enforcement of current federal laws could cause significant financial changes to Novus Medical Group. While we do not intend to harvest, distribute or sell cannabis or cannabis related products, we may be harmed by a change in enforcement by federal or state governments.
Forward-Looking Statements
This release includes forward-looking statements, which are based on certain assumptions and reflects management's current expectations. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Some of these factors include: general global economic conditions; general industry and market conditions and growth rates; uncertainty as to whether our strategies and business plans will yield the expected benefits; increasing competition; availability and cost of capital; the ability to identify and develop and achieve commercial success; the level of expenditures necessary to maintain and improve the quality of services; changes in the economy; changes in laws and regulations, includes codes and standards, intellectual property rights, and tax matters; or other matters not anticipated; our ability to secure and maintain strategic relationships and distribution agreements. Novus Medical Group disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Contact Information
Corporate:
Chairman and CEO
Frank Labrozzi
frank@ndev.