Is Medical Marijuana Covered by Health Insurance?

Is Medical Marijuana Covered by Health Insurance?

Published on 7/25/20

Updated Apr 14, 2022

As more states move to legalize medical cannabis and accept it, many people have questions about how they can integrate it into their lives. After all, cannabis use is as widespread as ever, and the medical use category shows no signs of slowing down anytime soon. Unfortunately, however, that popular and commercial support for cannabis has yet to translate fully into mainstream acceptance. Medical cannabis is an excellent example of that. Despite more than 5 million registered medical cannabis patients in the U.S. alone, they still can't pay for their treatments via their insurance.     

Yes, you read that right. The answer to the question "Is medical marijuana covered by insurance?" is still, sadly, no! Even if you live in one of the 39 states (or the District of Columbia, Guam, Puerto Rico, or U.S. Virgin Islands) where medical weed is legal, your health insurance does not cover cannabis prescriptions. Unfortunately, that is not likely to change until the federal law changes. 

We know that it is slightly confusing to those new to the industry. After all, isn't cannabis being legalized mainly in part to its scientific-proven potential as medicine? Yes, but the complete picture is much more complicated than that! Thankfully, we are here to break down exactly why medical cannabis isn't covered by health insurance providers here in the U.S., how and why other nations handle their medical patients and the future of medical cannabis and insurance coverage in the landscape of legalization. So with that in mind, let's get right into it! 

Why is Medical Cannabis Not Currently Covered Under Insurance?     

The core of the issue regarding medical cannabis and insurance is the patchwork nature of the U.S. laws regarding overall cannabis legality. At the moment, cannabis remains classified as a Schedule I drug and is illegal in the eyes of the federal government. Any substance classified as Schedule I, like heroin, LSD, or ecstasy, cannot be legally prescribed and is deemed to have "no currently accepted medical value."  Although researchers and scientists from all over the globe confirm that cannabis has a role to play medically, marijuana use remains strictly prohibited under federal law. They do this regardless of state statutes or the documented medical benefits of marijuana, such as treatment for depression, PTSD, glaucoma,etc.

As a result of its legal status here in the U.S., health insurers will not cover any substance or drug that is illegal, and the majority of plans in the U.S. contain what is known as an Illegal Acts Exclusion. The Illegal Acts Exclusion is a standard part of a coverage plan that says that the policyholder will not be covered if a health issue or incident occurs due to voluntary involvement in illegal activity or an unlawful act. Even for medical use in a state where it is medically legal, using cannabis will be deemed an "illegal or dishonest act" by the insurance company and deny coverage. Prescribed weed might be legal in your state, but insurance companies only listen to Uncle Sam. So simply put, as long as cannabis remains federally illegal, insurance will not cover it. 

Does Medicare Pay for Medical Marijuana?

Unfortunately, the answer here is complicated as well. The Federal Drug Administration (FDA) has not approved the cannabis plant or any part of the cannabis plant for any medical use. However, the FDA has approved several drugs that contain individual cannabinoids, and Medicare might just cover it depending on the patient's prescription drug plan. 

The FDA-approved a synthetic THC called Dronabinol in drugs like Marinol and Syndros covered by Medicare Plans C and D. Dronabinol treats nausea and vomiting caused by cancer chemotherapy and the loss of loss appetite and weight loss in HIV/AIDS patients. A type of purified CBD called Epidiolex was also approved to combat seizures associated with two rare and highly severe forms of epilepsy.

These two drugs come from the most well-studied and well-known cannabinoids found in the cannabis plant, CBD and THC. However, it's worth noting that other cannabinoids like CBN, CBC, THCA, and THCV have all shown potential for medical uses in the early research done on them. If the U.S. legalized cannabis, more comprehensive studies could potentially help patients from all over the globe. Until nationwide legalization, however, the research options are limited. 

Is CBD Oil Covered by Insurance?

Again, the answer is no. Cannabidiol (CBD) is a natural compound found in the cannabis plant that, unlike THC, is not psychoactive. The lack of any intoxicating traits has made CBD very attractive to the medical research community and physicians aware of the studies showing that it can affect pain and inflammation. The Farm Bill that Congress passed in 2018 legalized hemp and provided some hope that the insurance industry might recognize CBD oils. Still, in yet another paradox, even though CBD can be extracted from hemp because it can also come from marijuana, it remains a Schedule I controlled substance. Until it receives approval from the FDA, insurance will not cover it.

Canadian Health Insurance & Marijuana

Things are different north of the border in Canada. Since cannabis is legal for Canadians, they take a much different approach to insurance covering their medical cannabis. 

Many provincial insurance providers are offering coverage for medical cannabis treatments as part of extended health benefits plans, and the Canadian Revenue Agency lists cannabis as an eligible medical expense. Several private insurance companies provide benefits and coverage for medical marijuana for patients with certain conditions. 

In 2018, Sun Life, which insures over 22,000 companies in Canada, changed its policy to allow coverage of marijuana prescriptions up to $6,000 depending on each particular case. HIV/AIDS, multiple sclerosis, cancer, and palliative care are among the conditions covered. Other nations like the Czech Republic, Germany, and Italy allow insurance companies to cover some type of medical cannabis. We're pretty much 100 percent sure that as cannabis legalization spreads worldwide, however, more nations will permit insurance to reduce the costs for medical patients. 

Medical Marijuana as an Herbal Remedy

If the US drops marijuana as a controlled substance, this would certainly ease the burden on a large sector of the population acquiring weed for medical. Still, it would not result in any coverage from insurance companies. Cannabis would be like any other over-the-counter drug and could be purchased without a prescription, so patients would have to pay for it themselves. This solution does have some issues, however. 

One of the reasons why medical programs are so sought-after by patients in those states is the massive amounts of standards that come along with them. For example, most state-level medical programs come with purity checks for their products. That usually includes growing standards, assessments for pesticides and other contaminants, and a wide variety of further checks and balances"precise dosages and studies on how those particular strains impact the conditions that patients are looking to treat. If cannabis was treated as an unregulated herbal remedy, we would see similar issues within the industry that we do now with CBD and Delta-8, like lack of purity tests and disreputable brands selling snake oil.  

If customers use cannabis safely and medically, there need to be state-level programs to provide checks and balances and protect consumers. 

The Future of Medical Marijuana and Insurance Coverage

Unlike the rapid changes in acceptance and legality of cannabis and cannabis-infused products across the country, any change in the insurance industry's stance on medical weed will not happen quickly and might not happen at all. A change in the status of cannabis on the federal level to a Schedule I or Schedule II substance would allow for prescriptions and decriminalization but likely would not prompt insurance carriers to cover it.

Healthcare plans in the U.S. have something called a Health Care Formulary. It is just a list of the medications cleared for use and should be covered by insurance companies. These medications are all approved by the FDA, and for the FDA to approve a drug, exhaustive clinical studies have to be completed to judge the drug's safety and effectiveness. Once a drug is approved, the door is opened for Big Pharma to enter the stage and attempt to claim exclusive rights to manufacture and sell the drug. This entire process takes years to navigate, and since medical marijuana is not even a topic of discussion at the moment, the chances that it would receive FDA approval are slim to none.

It is a dispiriting conclusion, but in all likelihood, if the question, "Does insurance cover medical marijuana?" comes up in the next decade, the answer will still be a resounding "no." For the foreseeable future, patients who benefit from medical cannabis will need to continue to access their medicine by growing themselves, relying on the generosity of others, or paying out of pocket. As more and more states legalize and nationwide federal legalization gets closer, however, that is likely to change sooner rather than later!  

Do you use medical marijuana? If so, what do you use it for? Do you live in a state or territory where it is legal? Have you ever discussed it with your insurance carrier? Take a moment to let us know in the comments section below.

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