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.
Is Medical Marijuana Covered by Health Insurance?
Let’s just cut to the chase. Is medical marijuana covered by insurance? No. Sadly, even if you live in one of the 33 states (or the District of Columbia, Guam, Puerto Rico or U.S. Virgin Islands) where medical weed is legal, marijuana prescriptions will not be covered by your health insurance. Unfortunately, that is not likely to change until the federal law changes. At the moment, cannabis remains classified as a Schedule I drug and is illegal in the eyes of the federal government. Anything that is Schedule I cannot be legally prescribed. Marijuana use remains strictly prohibited under federal law, regardless of state statutes or the documented medical benefits of marijuana, such as treatment for depression, PTSD, glaucoma and more.
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. This is a standard part of a coverage plan that says that if a health issue or incident occurs due to voluntary involvement in illegal activity or an illegal act, the policyholder will not be covered. The use of marijuana – even for medical use in a state where it is legal – will be deemed an “illegal or dishonest act” by the insurance company and coverage will be denied. Prescribed weed might be legal in your state, but insurance companies only listen to Uncle Sam.
Does Medicare Pay for Medical Marijuana?
The Federal Drug Administration (FDA) has not approved the cannabis plant or any part of the cannabis plant for any medical use. However, the FDAhasapproved several drugs that contain individual cannabinoids and Medicare might just cover it depending on the patient’s prescription drug plan. Synthetic THC – in the form of Drobinol – in drugs like Marinol and Syndros are approved by the FDA and can technically be covered by Medicare Plans C and D. Dronabinol is used to treat nausea and vomiting caused by cancer chemotherapy and the loss of 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 extremely severe forms of epilepsy.
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 who are aware of the studies that have shown that it can affect pain and inflammation. The Farm Bill that Congress passed in 2018 legalized hemp and provided some hope that CBD oils might be recognized by the insurance industry, but 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 it will not be covered by insurance.
Canadian Health Insurance & Marijuana
Things are quite different north of the border in Canada. An increasing number of 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. There are also several private insurance companies that 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 that can be covered.
Medical Marijuana as an Herbal Remedy
The other change that could occur regarding medical cannabis is if its status as a controlled substance were to be completely dropped. This would certainly ease the burden on a large sector of the population in terms of acquiring weed for medical use, but it would not result in any coverage from insurance companies. Cannabis would be like any other over-the-counter drug and since it could be purchased without a prescription, patients would have pay for it themselves.
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 basically just a list of the medications that are cleared for use and should be financially covered by the insurance company. These medications are all approved by the FDA and in order 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 next decaude, 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.
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.
Let’s just cut to the chase. Is medical marijuana covered by insurance? No. Sadly, even if you live in one of the 33 states (or the District of Columbia, Guam, Puerto Rico or U.S. Virgin Islands) where medical weed is legal, marijuana prescriptions will not be covered by your health insurance. Unfortunately, that is not likely to change until the f