Does Medicare Cover the Cost of CBD Oil?
Discover if Medicare covers CBD oil. Understand how federal drug policies affect coverage and explore practical payment solutions.
Cannabidiol, commonly known as CBD oil, is a product derived from the cannabis plant that has gained considerable attention. Many individuals inquire whether the costs associated with CBD oil are covered by Medicare, the federal health insurance program for people aged 65 or older and certain younger people with disabilities. Understanding Medicare’s prescription drug coverage rules clarifies its stance on CBD oil.
Understanding Medicare’s Drug Coverage
Medicare provides prescription drug coverage through Medicare Part D, offered by private insurance companies. These plans help beneficiaries pay for prescription medications. For a drug to be covered under a Medicare Part D plan, it generally must be approved by the U.S. Food and Drug Administration (FDA) for sale in the United States.
Each Part D plan maintains a list of covered drugs called a formulary. The drugs on these formularies must be medically necessary and intended for a “medically accepted indication” as defined by Medicare law. Drugs not approved by the FDA or those prescribed for “off-label” uses not supported by official drug compendia are typically excluded from Part D coverage.
CBD Oil’s Classification and Medicare Coverage
Most CBD oil products available on the market are not classified as FDA-approved prescription drugs. Since Medicare Part D generally covers only FDA-approved medications, most non-prescription CBD oil products do not qualify for coverage. This lack of regulatory approval stems from ongoing research into the long-term effects, safety, and efficacy of CBD oil for various conditions.
However, there is one specific exception: Epidiolex. This is the sole FDA-approved prescription drug that contains a purified form of a CBD-derived substance. Epidiolex is approved to treat seizures associated with specific, rare forms of epilepsy, namely Lennox-Gastaut syndrome, Dravet syndrome, and tuberous sclerosis complex. Medicare Part D plans may cover Epidiolex if it is included in their formulary and prescribed for one of its FDA-approved indications, with coverage details depending on the specific plan’s terms.
Alternative Funding for CBD Oil
Given that Medicare does not typically cover the cost of general CBD oil products, individuals usually pay for these items out-of-pocket. Prices for CBD oil can vary significantly based on concentration, product type, and brand.
Some individuals inquire about using Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to cover CBD oil expenses. While some sources suggest that CBD oil might be eligible for reimbursement with a medical diagnosis, official IRS guidance has not explicitly clarified the eligibility status of CBD products for HSA or FSA reimbursement. Due to this lack of clear guidance, many plan administrators currently consider CBD products ineligible for reimbursement through these accounts. It is advisable to consult with a plan administrator or tax professional to confirm eligibility and avoid potential penalties.