As of 2022, 37 states (and Washington, DC) have legalized marijuana in some form. But the costs associated with medical marijuana are not covered by health insurance plans, even in states that have legalized weed.
These facts seem at odds. If medical marijuana is legal in a state, and if a doctor recommends medical marijuana for a patient, why can’t health insurance pay for the costs of the drug? The answer is as complex as the many state and federal laws that dictate marijuana use. So let’s get into the weeds.
What Is Medical Marijuana?
Marijuana is another name for varieties of the cannabis plant that are cultivated for recreational or medicinal drug use. (The varieties of cannabis cultivated for non-drug use are called hemp.) When used medicinally, cannabis can ease symptoms — such as nausea and vomiting, muscle stiffness, sleep issues, and lack of appetite — that relate to certain medical conditions.
Is Medical Marijuana Legal to Use?
It’s complicated. First, marijuana is classified by the U.S. Drug Enforcement Agency (DEA) as a Schedule I Drug, along with substances such as heroin, ecstasy, and LSD. Therefore, it is against federal law to possess, sell, give away, grow, or use marijuana for any purpose — even for medical reasons.
Second, marijuana has not been approved for medical use by the U.S. Food and Drug Administration (FDA). FDA non-approval stems from lack of research regarding cannabis’ safe and effective treatment for medical conditions; and lack of research stems from funding that is severely limited by marijuana’s Schedule I classification.
Third, physicians are not allowed to prescribe Schedule 1 drugs, which means they can’t legally prescribe medical marijuana. Instead, in states where weed has been legalized, providers may recommend (not prescribe) medical marijuana by writing a “certificate” for a patient to use at a medical marijuana dispensary.
Could Medical Marijuana Be Covered by Health Insurers?
Medical marijuana is not covered by health insurance plans, and it won’t be reimbursed for a Flexible Savings Account or Health Savings Account. The reasons for non-coverage tie back to the convoluted restrictions around weed in the U.S.:
- Health insurers won’t cover federally illegal substances.
- Health insurers will only cover drugs that are approved by the FDA.
- Health insurers will only pay for drugs that are shown on a drug formulary (the list of medications covered by a health plan).
- Most drugs are not added to a formulary unless they’ve been FDA-approved.
So, unless weed becomes decriminalized under law, approved by the FDA, and added to a drug formulary, it’s not likely that group health insurers will fully insure medical marijuana and CBD-based medication. In the meantime, an employee will have to pay out-of-pocket for medical cannabis.
Are Any Cannabis Medications Covered by Health Insurance?
There are exceptions to the no-coverage rule for medical marijuana. Cannabis contains CBD and THC, two naturally occurring compounds called cannabinoids. THC is the compound that causes a “high,” while CBD does not have psychoactive effects.
Epidiolex uses a pure form of CBD (no THC) to treat seizures associated with severe and rare forms of epilepsy. Epidiolex is listed as a Schedule V prescription medication, so it is legal under federal law. Meanwhile, three other medications — Marinol, Syndros, and Cesamet — contain a synthetic, legal form of THC. These medications are prescribed to relieve pain, nausea, and vomiting caused by certain severe medical conditions.
Because all four drugs are FDA-approved and available only by prescription, they can be covered by health insurance plans. Beside these four prescription medications, no other CBD, cannabis, or cannabis-derived products are covered by health insurers.
Are There Alternatives to Medical Marijuana?
In the non-prescription category, people use hemp-derived CBD products to reduce pain, lower anxiety, and induce relaxation. So long as these products have less than 0.3% THC, they are federally legal to manufacture and produce (though they are illegal in some states).
While hemp-derived CBD products can be used for medical reasons, they are not regulated and may contain trace amounts of THC. Therefore, they are considered supplements, rather than medications; they are also not FDA-approved, not available for prescription, and not covered by insurance plans.
So, here’s the takeaway regarding coverage and use of medical marijuana:
- Four medications (Epidiolex, Marinol, Syndros, and Cesamet) are FDA-approved, federally legal, and typically covered by group health insurance plans.
- Recreational and medical marijuana in any other form is illegal at the federal level, though it is legal in certain states.
- In states that have legalized medical marijuana, a patient may purchase and use medicinal marijuana that has been recommended (not prescribed) by a doctor — but a health insurance plan will not cover the costs.
- Hemp-derived CBD products are legal at the federal level and in most states. However, they are considered supplements and are also not covered by health insurance.
Medical marijuana is just one of many complex topics under the umbrella of group healthcare coverage. For support with your health insurance questions, contact Regency West. We’ll help you create a comprehensive benefits package that meets the needs of your employees and your business.