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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?

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Medical marijuana has been used to treat various ailments for over 3,000 years, according to the National Institutes of Health. But not everyone agrees on how effective it may be, or whether it should be legal.

Is medical marijuana legal?

While it’s legal in more than 30 states, medical marijuana is not legal at the federal (national) level, according to the National Conference of State Legislatures. The National Library of Medicine reports that medical marijuana has been found effective for certain medical conditions, such as nausea. However, marijuana use has also been associated with memory and behavioral problems.

What conditions might medical marijuana treat?

According to the National Library of Medicine, medical marijuana has been used to treat such conditions as nausea and appetite loss (for example, due to HIV/AIDS).

It has also been used to treat Parkinson’s disease (according to the Parkinson’s Foundation) and epilepsy (according to the Epilepsy Foundation). It has been tried for other conditions as well – such as multiple sclerosis, according to the National Multiple Sclerosis Society.

However, using a drug to treat a condition is different from proving that a drug effectively treats the condition. See below for information about how the Food and Drug Administration (FDA) has approached medical marijuana.

Has the FDA approved medical marijuana?

The Food and Drug Administration (FDA) hasn’t approved the use of medical marijuana, notes the FDA website. However, it has approved some drugs based on certain substances derived from marijuana for some medical conditions. For example, the FDA approved two prescription drugs in the cannabinoids class of drugs.

Cannabinoids (which come from marijuana, also called cannabis) are active ingredients in these FDA-approved prescription drugs, dronabinol and nabilone. Dronabinol and nabilone are used to treat nausea – for example, resulting from chemotherapy treatments, according to the National Institutes of Health.

Medicare Part D, medical marijuana, and opioids

According to the National Library of Medicine, opioids are a type of drug used to relieve pain. There are several prescription drugs that are opioids, such as fentanyl and oxycodone. These drugs sometimes come with the risk of misuse, addiction, or overdose.

A study of opioid use under Medicare Part D (prescription drug coverage) found that prescriptions for opioids decreased in states that legalized medical marijuana. This was reported by the American Medical Association’s JAMA website.

The JAMA website reported that an average of 23.08 million daily doses of opioids were prescribed in each state under Medicare Part D in a study that ran from 2010-2015. That daily average went down by 2.11 million doses in states where medical marijuana was legal, and even more when states had medical marijuana dispensaries.

Does Medicare cover medical marijuana?

Medicare doesn’t typically cover medical marijuana. However, more and more individual states are legalizing it, and laws can change. So, if your doctor feels you’d benefit from medical marijuana, it may be worth contacting Medicare to see if it can be covered in your case. Call Medicare at 1-800-MEDICARE (1-800-633-4227). TTY users call 1-877-486-2048. Medicare representatives are available 24 hours a day, seven days a week.

Do you have questions about your Medicare coverage options? Just start comparing low-cost Medicare plans by entering your ZIP code and clicking the button on this page.

Medical marijuana is a topic on many people's minds these days & might be used to treat nausea and appetite loss. If you have Medicare coverage, you might be wondering if your Medicare plan cover the costs for medical marijuana. Learn more today. ]]>