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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.

Medical marijuana with a prescription and stethoscope

istockphoto / Getty Images

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

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 Health Insurance Cover CBD Oil?

Does Health Insurance Cover CBD Oil?

As research continues to provide evidence of CBD oil’s many health benefits, more and more people are turning to this natural wonder for help. CBD oil has been shown to help relieve anxiety, improve symptoms of depression, and alleviate pain.

While many scientific studies have backed up the claims about the benefits of CBD oil, and many people have already started to use it, the relatively high prices of CBD oil remain a concern. Many consumers opt for cheaper products only to find they yield ineffective results, as they contain dosages of the cannabidiol compound that are insufficient to produce the potential health benefits.

Due to the high price tag of CBD oil, patients are often asking their doctors if their health insurance plans will cover the cost. In this post, we explore whether or not health insurance programs will ever cover CBD oil as well as look at the options that are currently available.

Will Health Insurance Agencies Pay for CBD Oil?

It is not only the average consumer who is becoming more aware of the health-related properties of CBD oil. Many physicians have begun to notice as well, seeing their patient’s symptoms improve for various ailments. These products have scientific research behind the claims of their medicinal properties and yield almost no side effects in a majority of patients.

As a result, some doctors are starting to recommend CBD oil as a treatment—often in combination with other conventional medications. And they’re being asked by their patients if it’s covered by health insurance.

At the present time, the answer to this question is unfortunately no. There are no health insurance companies in the United States that will cover CBD oil or even medicinal marijuana, even if it’s prescribed by a doctor. Health insurance will not cover the costs even when a patient hands over a prescription at a dispensary.

Why Won’t Health Insurance Companies Cover the Cost of CBD Oil?

Even though there is plenty of evidence regarding the medicinal uses for CBD oil—and even though doctors are already prescribing these oils to their patients—health insurance plans do not offer to cover the costs. This brings up the question of why, especially when there are a significant number of other pharmaceutical drugs that are covered— sometimes with similarly high or even higher price tags.

There are two primary obstacles preventing health insurance companies from offering to cover CBD oil or similar treatment options such as medicinal marijuana.

The first obstacle is the U.S. Food and Drug Administration (FDA). When a new drug is released on the market, it must first be approved by the FDA before doctors can legally prescribe it to their patients.

The FDA focuses its attention on pharmaceutical products and has little interest in products that are primarily made from natural sources—so CBD products don’t get approved and, in turn, health insurance companies are not obligated to cover them. According to state laws, these agencies are only required to provide coverage for drugs that are FDA approved.

So far the FDA has approved only one drug containing CBD, for a rare form of epilepsy.

The other obstacle to health insurance coverage for CBD oil is because it’s classified as a Schedule 1 controlled substance. This classification typically applies to marijuana, but laws in the U.S. state that any product containing the cannabidiol compounds found in marijuana must also fall under the classification.

Cannabidiol is an active chemical that is found in both hemp and marijuana plants. Even though hemp is legal in most states—and is the plant used to produce CBD oils—the fact that it contains the same cannabidiol compounds as marijuana is why the Schedule 1 classification remains in place.

What Options Are There for Patients?

At the moment, patients interested in obtaining CBD oil for its medicinal properties must pay for it out of their own pockets. There is currently no financial assistance for a patient wanting to obtain CBD oil for any health reason—even with a doctor’s prescription.

For this reason, consumers are advised to be cautious when buying CBD oil. Quality products can reach more than $100 a bottle, and there have been reports that some brands have advertised CBD products that had little to no actual cannabidiol compounds in the solution.

Patients seeking CBD products need to make sure they’re purchasing them from a reputable company. It is critical that you do your research and examine the authenticity of the brand.

CBD Oil and Health Insurance: What the Future May Hold

Even though health insurance companies don’t currently cover the cost of CBD oil, this doesn’t mean there will never be such coverage.

With a rapidly growing body of scientific research showing just how powerful CBD oil is for treating depression, anxiety, pain, inflammation, acne, and many other conditions in the human body, the FDA certainly could consider reviewing these products in the future.

Additionally, there could also be changes to the scheduling classification of the compound—ultimately leading to health insurance companies embracing CBD oil’s potential health benefits for patients.

Conclusion

The medicinal properties of CBD oil have made these products exceptionally popular. Doctors are starting to prescribe these oils to their patients as a safer way to manage certain symptoms and diseases. Even though scientific research is backing up the claims about these oils, health insurance companies aren’t ready to help patients pay for them. But we could see companies come around to providing such coverage to patients in the future.

As research continues to show evidence of many CBD's health benefits, many people are wondering if it's covered by insurance. The answer is usually "no."