Is Medical Cannabis Covered by Insurance?

Medical cannabis has emerged as a therapeutic option, leading many to question whether health insurance covers its costs. The complex legal and regulatory frameworks at federal and state levels make understanding coverage challenging.

Federal and State Legal Frameworks Impacting Coverage

The lack of insurance coverage for medical cannabis stems from its federal classification. Under the Controlled Substances Act (CSA), cannabis is a Schedule I drug, considered to have no accepted medical use and a high potential for abuse. This federal status impacts federally regulated entities, including most insurance companies, preventing them from covering cannabis expenses.

The U.S. Food and Drug Administration (FDA) has not approved the cannabis plant as a medicine. FDA approval is generally a prerequisite for pharmaceutical products to be covered by insurance, confirming safety and effectiveness for specific medical uses. While the FDA has approved certain cannabis-derived or synthetic cannabinoid medications, such as Epidiolex for epilepsy, these are distinct from the whole cannabis plant.

Many states have legalized medical cannabis programs, creating a divergence between state and federal law. However, state-level legality does not override federal prohibitions for insurance purposes. Even in states where medical cannabis is legal, federal law prevents most insurance providers from covering its cost.

Insurance Company Policies and Reimbursement Realities

Due to federal legal status and lack of FDA approval, most health insurance providers—including private plans, Medicare, Medicaid, and Veterans Affairs (VA) programs—do not cover medical cannabis products. This applies even in states where medical cannabis is legal. Insurance policies often exclude substances deemed illegal under federal law or those not FDA-approved.

While the cannabis product itself is generally not covered, associated medical services may be. Doctor visits, consultations, or certifications for a medical cannabis recommendation might be covered if they are standard, in-network medical visits. This coverage is for the professional service, not the cannabis product. For instance, a general health visit leading to a discussion about medical cannabis might be covered, but a visit specifically for a medical cannabis evaluation might not.

Patients should review their insurance policy or contact their provider for information. Policy language varies, especially concerning experimental treatments or non-FDA approved substances. Medicare and Medicaid do not cover medical cannabis, but may cover FDA-approved cannabinoid-based prescription medications if in their drug formulary, such as dronabinol or Epidiolex. VA healthcare providers cannot recommend or prescribe medical marijuana, nor will the VA pay for it. However, veterans will not be denied other VA benefits for participating in state-approved cannabis programs.

Patient Financial Responsibilities

Since insurance generally does not cover medical cannabis, patients typically bear the full financial responsibility. The cost of the cannabis product is almost always an out-of-pocket expense, varying by product type (e.g., flower, oils, edibles), dispensary, and state.

Patients also incur other fees. These include initial medical cannabis evaluations or recommendations from a qualified physician, ranging from $100 to $400 for a first visit and $150 for annual renewals. Some clinics may offer discounts, such as for veterans. State medical cannabis patient registration or card renewal fees range from $20 to $200 annually.

Patients usually pay for medical cannabis directly to dispensaries using cash, debit cards, or other direct payment methods. Credit card processing is challenging for cannabis businesses due to federal banking regulations, making cash or debit transactions more common. Health Savings Accounts (HSAs) cannot be used for medical cannabis, as the IRS considers it an ineligible expense due to its federal illegality.