Does Medicare Cover CBD Oil and Related Medications?

Medicare’s General Coverage Principles for Medications

Medicare, the federal health insurance program for individuals aged 65 or older and certain younger people with disabilities, provides coverage for a range of medical services, including prescription medications. The program is divided into several parts, each covering different aspects of healthcare.

Medicare Part A, known as Hospital Insurance, covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health services. While it does not cover outpatient prescription drugs, it may cover medications administered during a covered inpatient stay. Medicare Part B, or Medical Insurance, covers doctor’s services, outpatient care, medical supplies, and some preventive services. Part B covers a limited number of outpatient prescription drugs, usually those administered by a medical professional in a clinical setting, such as certain injectable or infused drugs.

The majority of prescription drug coverage under Medicare falls under Medicare Part D, which is optional and provided through private insurance companies approved by Medicare. These plans, often called Prescription Drug Plans (PDPs) or Medicare Advantage Plans with prescription drug coverage (MA-PDs), help cover the cost of outpatient prescription drugs. Each Part D plan has its own list of covered drugs, known as a formulary, which must include a wide range of commonly prescribed medications.

For a drug to be covered by Medicare Part D, it must be approved by the Food and Drug Administration (FDA) for a medically accepted indication and prescribed by a licensed healthcare provider. The drug also needs to be deemed medically necessary for the patient’s condition. Medicare Part D plans do not cover over-the-counter medications, experimental treatments, or products classified as dietary supplements rather than pharmaceutical drugs.

Current Regulatory Status of CBD Oil

The legal and regulatory landscape surrounding Cannabidiol (CBD) oil influences its potential for Medicare coverage. A key distinction exists between hemp-derived CBD and marijuana-derived CBD, based on their tetrahydrocannabinol (THC) content. The Agriculture Improvement Act of 2018, known as the 2018 Farm Bill, federally legalized hemp by removing it from the Controlled Substances Act, provided it contains no more than 0.3% delta-9 THC on a dry weight basis. This change allowed for the widespread production and sale of hemp-derived CBD products.

Despite the federal legalization of hemp, the Food and Drug Administration (FDA) maintains a cautious stance on CBD. The FDA has not approved CBD as a general drug for widespread use or as an ingredient in food or dietary supplements. With one specific exception, it is unlawful to market CBD products as dietary supplements or to add CBD to food products across state lines. The FDA continues to evaluate the safety and efficacy of CBD and has issued warning letters to companies making unsubstantiated health claims about their CBD products.

Most CBD products, such as oils, tinctures, edibles, and topicals, are regulated by the FDA as cosmetic ingredients or general consumer products. They are not classified as prescription drugs. They have not undergone rigorous testing and approval processes required for pharmaceutical medications and cannot make specific medical claims about treating, curing, or preventing diseases.

The classification of most CBD products as supplements or consumer goods, rather than FDA-approved prescription drugs, has implications for insurance coverage. These products fall outside the typical framework for drug coverage by health insurance programs, including Medicare. This regulatory environment creates a barrier to their inclusion in standard medication benefit plans.

Medicare’s Coverage of CBD Oil and Specific CBD-Derived Medications

Given the regulatory framework, Medicare generally does not cover most CBD oil products available to consumers. The primary reason for this lack of coverage stems from the fact that the vast majority of CBD oils and related products are not approved by the Food and Drug Administration (FDA) as prescription drugs. These products are typically marketed as dietary supplements or consumer goods, which do not meet Medicare’s criteria for coverage under its prescription drug plans. Medicare Part D, which covers most outpatient prescription drugs, requires medications to be FDA-approved and prescribed for a medically accepted indication.

Since general CBD oil products lack FDA approval as drugs, they do not qualify for inclusion on Medicare Part D formularies. Furthermore, these products are often purchased without a prescription from a licensed healthcare provider, which is another prerequisite for Medicare drug coverage. Even if a doctor recommends a general CBD oil product, Medicare will not cover its cost because it does not meet the program’s strict definition of a covered prescription medication.

However, there is a distinct exception to this general rule concerning a specific CBD-derived medication. Epidiolex is a purified form of cannabidiol that has received FDA approval as a prescription drug. It is specifically approved for the treatment of seizures associated with Lennox-Gastaut syndrome, Dravet syndrome, and tuberous sclerosis complex in patients one year of age and older. Because Epidiolex is an FDA-approved prescription medication used for medically accepted indications, it is eligible for coverage under Medicare Part D, similar to other approved prescription drugs.

Coverage for Epidiolex through Medicare Part D means that beneficiaries whose physicians prescribe it for an approved condition may have its cost covered, subject to their plan’s formulary, deductible, copayments, and coinsurance. It is crucial to understand that Epidiolex is a pharmaceutical product with a specific dosage and formulation, distinct from the wide array of general CBD oils sold in retail or online markets. The coverage of Epidiolex does not extend to or imply coverage for other non-FDA-approved CBD oil products.