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Why Health Insurance Won’t Pay for Medical Marijuana

James Lacy, MLS, is a fact checker and researcher. James received a Master of Library Science degree from Dominican University.

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If you live in a state where medical marijuana use has been legalized (35 states and DC as of late 2020), it’s tempting to assume that your health insurance will pay for it like other drugs prescribed by your physician. However, you’d be wrong; health insurance won’t pay for medical marijuana even in states where its use has been legalized. Why won’t health insurance pay for medical marijuana when it will pay for all sorts of other drugs, many arguably more dangerous and prone to abuse?  

Medical Marijuana Is a Schedule I Drug

Health insurers in the United States won’t pay for anything that’s technically illegal. Most health insurance policies include an illegal acts exclusion saying that health issues occurring due to or in association with your voluntary involvement in an illegal act are not covered (some states limit or prohibit these sort of exclusions  ). Even though medical marijuana has most likely been legalized in the state where you live, it’s still classified by the federal government as a schedule I controlled substance as defined by the Controlled Substances Act. It’s still illegal to use marijuana in terms of federal law.  

In addition to health plan illegal acts exclusion clauses, another issue arises due to marijuana’s Schedule I designation. Schedule I controlled substances can’t be prescribed by physicians the way other medications are.

Physicians who prescribe controlled substances must be registered with the Drug Enforcement Administration and have a DEA number. Prescribing a Schedule I drug, even in a state where medical marijuana has been legalized, would place a physician at risk of having his or her DEA registration revoked. Even if medical marijuana has been legalized in your state, as long as it’s considered a Schedule I drug by the federal government, prescribing it would put your physician at risk of losing his or her ability to prescribe even simple controlled substances like sleeping pills and cough syrup with codeine.  

For this reason, most physicians don’t prescribe medical marijuana. In states that have legalized its use, physicians recommend medical marijuana rather than prescribe it (Cigna describes how a doctor can write a “certificate” that the patient can take to a medical marijuana dispensary).   That brings us to stumbling block number two.

Health Insurance Won’t Pay for Medical Marijuana If It’s Not on the Drug Formulary

Even if the U.S. were to change marijuana to a schedule II or III drug—thereby allowing its prescription and decriminalizing its medical use across the country—your health insurance company probably still wouldn’t pay for your medical marijuana. Likewise, if congressional action were to remove marijuana from the list of controlled substances altogether, your health plan probably still wouldn’t pick up the tab for your Alice B. Toklas brownies even if your doctor recommended them.

Each health plan has a drug formulary, a list of medications it covers for health plan members. Your health plan’s pharmacy and therapeutics committee would have to add marijuana to its drug formulary before it would be a covered benefit of your health insurance.  

It would be highly unusual for a health plan to add a drug to its formulary if the drug hasn’t been FDA approved. Getting new drug approval from the FDA requires clinical studies to determine both the drug’s safety and that the drug is effective. Clinical studies are complicated and expensive to perform. So, when the FDA grants a new drug approval, it also grants a period of time in which the company given the new drug approval has exclusive rights to manufacture and sell the drug in the United States.  

If you think it costs a lot now, wait until Pfizer, Merck, AstraZeneca or another big pharma company gains the exclusive right to bring marijuana to market in the United States.

Without FDA approval, it won’t get on your health plan’s drug formulary, so your health insurance won’t pay for medical marijuana. The process of getting marijuana approved would almost assuredly involve big pharma, exclusive marketing rights, and exorbitant costs. You can read more about this in an article about marijuana that the FDA published.

The FDA has, however, approved Marinol (in 1985), Cesamet (in 2006), and more recently, Syndros (in 2016). All three contain a synthetic form of THC.   In 2018, the FDA approved Epidiolex, a CBD oral solution for treating seizures associated with two forms of epilepsy. Although these drugs are not the same thing as cannabis, they can be prescribed just like any other FDA-approved medication, and do tend to be covered by health insurance plans.  

Health Insurance Won’t Pay for Medical Marijuana as an Herbal Remedy

If marijuana was to be reclassified so that it wasn’t a controlled substance at all, it might become available without a prescription. However, those who think that’s the answer to getting medical marijuana covered by health insurance are misguided.

When a drug becomes available without a prescription, it’s removed from health plan drug formularies and you’re expected to pay for it yourself. Does your health insurance currently reimburse you for over-the-counter medications like Tylenol? Most don’t. Does it cover herbal remedies like St. John’s wort or echinacea? That’s unlikely.

In this situation, patients who would benefit from using marijuana would be able to buy it over-the-counter like any other herbal remedy. As they are now, those patients would be highly motivated to find a way to pay for it themselves. Why would your health insurance want to set a precedent of paying for over-the-counter drugs or herbal remedies that you’re willing to pay for yourself?

Will Things Change?

In summary, there’s more than one reason why your health plan won’t pay for medical marijuana. Even if marijuana were to be reclassified to a lower schedule or congressional action removed it from the list of controlled substances altogether, that wouldn’t be like waving a magic wand. Your health plan wouldn’t magically start paying for your medical marijuana a month or two later. Instead, it would be the beginning of a long, slow, process.

If the process ended up with marijuana being an FDA approved drug, it might eventually be covered by your health plan as a prescription drug on its drug formulary.   However, that would be years, not months, down the road. If, even more surprisingly, marijuana ended up as an herbal remedy not requiring FDA approval, it remains highly unlikely that your health insurance would pay for it.

Learn about why health insurance won't pay for medical marijuana, and why reclassification of marijuana won't make your health plan pay either.

Does Medicare Cover Medical Marijuana?

More states are legalizing medical marijuana with each passing year. That may make you wonder whether Medicare will cover the cost of medical marijuana in your state.

Federally, marijuana remains a controlled substance. It’s illegal to possess or use the drug under federal law. However, individual states have passed laws allowing distribution and sale within their state boundaries.

Medicare won’t cover medical marijuana because it’s considered a Schedule I controlled substance. In fact, doctors can’t even legally prescribe it.

Marijuana is usually suggested to treat symptoms like pain, nausea, and seizures. If you’ve received a doctor’s recommendation and your state has legalized medical marijuana, read on to learn what you need to know about coverage for medical marijuana, how and why it’s used, and more.

Medicare doesn’t cover drugs that are illegal according to the federal government. This includes marijuana.

The Food and Drug Administration (FDA) hasn’t cleared marijuana as a safe and effective treatment for any medical use. That’s true even if you live in a state where it’s medically legal. This is another reason Medicare won’t cover medical marijuana.

What about Medicare prescription drug plans?

Medicare Part C, or Medicare Advantage, is health insurance offered by private insurance companies that offers additional coverage beyond original Medicare (parts A and B). Extra coverage may include dental care, vision care, and some prescription drugs.

Medicare Part D is medical insurance that’s also offered through private companies and covers prescription drugs. It doesn’t, however, cover medical marijuana.

Parts C and D could cover the cost of cannabinoid medications that have been approved by the FDA and are available without restriction. This is where some flexibility exists.

Cannabinoid medications, like dronabinol (Marinol, Syndros) and Epidiolex, may be covered by Medicare drug plans because they’re FDA approved.

If you’re unsure what your plan covers, contact your Medicare prescription drug plan directly. They can help you understand whether you have coverage for any cannabinoid medication and how to fill a prescription.

Marijuana has been recommended to ease symptoms like:

Medical marijuana is often suggested to treat the symptoms of AIDS or cancer. Research has shown it can boost appetite and reduce nausea. If you have multiple sclerosis (MS), medical marijuana may help ease pain and reduce muscle stiffness.

Cannabinoid-based medications

Dronabinol can be used to ease nausea and vomiting from cancer treatments and increase appetite in people with AIDS.

Epidiolex can help prevent seizures and is used as a treatment for epilepsy. Both of these medications have been approved by the FDA for these uses.

The federal government considers marijuana illegal and holds strict control of cannabis and cannabinoid-based products. That means research on the possible benefits, or even the side effects, of marijuana use is limited.

Without data from clinical research, the FDA won’t be able to update its position on the safety or effectiveness of medical marijuana.

In 2020, 33 states and Washington, D.C., have approved the sale and use of medical marijuana. Some of those states have also approved marijuana for recreational use.

In states where only medical marijuana is legal, you’re required to get a medical marijuana card.

The rules and steps for getting a medical marijuana card may vary from state to state, but here are the basics:

  • Make an appointment with your primary healthcare provider. Your doctor will likely give you a full physical exam and review your medical history. If your doctor thinks medical marijuana might help, they may approve you for a medical marijuana card.
  • Renew your marijuana card annually. This may require follow-up visits. Ask your doctor if there are any other additional steps you’ll need to take. Most marijuana cards are registered with the state government.
  • Your doctor can’t prescribe marijuana directly. Federal law prevents doctors from prescribing substances that are illegal. Marijuana remains illegal under federal law. Instead, your doctor may suggest you use it.

Even though all types of marijuana are illegal at the federal level, the federal government hasn’t taken steps to prosecute those who use it within a state with legal marijuana trade.

However, it’s still possible to face prosecution under federal law under certain circumstances.

Marijuana contains several dozen active chemicals. The two most well known are cannabidiol (CBD) and delta-9-tetrahydrocannabinol (THC).

CBD’s potential benefits include improved relaxation, pain reduction, and lowered anxiety. THC is the chemical responsible for the psychoactive effects of marijuana.

In recent years, CBD has been isolated from THC and is sold even in states that don’t allow medical marijuana. In states where medical marijuana is legal, both CBD and THC products are available for a variety of health issues.

Like medical marijuana, individual states have their own legislation regarding legal levels of CBD. Check your state’s legislation for specific information, and be mindful of other state laws when traveling with CBD.

how Medical Marijuana may affect the opioid crisis

Limited research suggests the use of marijuana is reducing the use of opioids and pain medication with high addiction potential. Because marijuana may help relieve some of the same symptoms as opioids, doctors may not prescribe pain medications if marijuana were an option.

If you have a serious illness, marijuana is sometimes used to treat symptoms like pain, nausea, and seizures. If your doctor has diagnosed you with one of these conditions and your state has legalized medical marijuana, here’s what you need to know about using medical marijuana and how much it will cost.