The short answer
Most US health insurance plans do not pay for medical cannabis. Commercial insurers, Medicare, Medicaid, and most workers' compensation carriers exclude it. The cause is federal law. Cannabis sits in Schedule I of the Controlled Substances Act at 21 U.S.C. 812. Schedule I drugs have no accepted medical use under federal law.
why is medical cannabis not covered by insurance
38 states and the District of Columbia run legal medical cannabis programs. A state program does not obligate a private insurer to cover the drug. State coverage mandates reach state-regulated plans. Self-funded employer plans fall under ERISA and skip many of those mandates.
medical cannabis insurance denial appeal
What each payer does
Commercial plans
Employer and individual plans list cannabis as an exclusion. Copays and deductibles never apply because the claim is denied at intake. A plan can add a rider. Few do. Ask for the formulary and the exclusion list in writing.
does va insurance cover medical cannabis
Medicare
Medicare Part D covers FDA-approved drugs. Cannabis is not FDA approved. CMS does not pay for it. The FDA approved Epidiolex, a purified cannabidiol oral solution, in 2018 for two rare seizure disorders. Part D can cover that product.
Medicaid Medical Marijuana Coverage: No State Pays for Dispensary Cannabis
Medicaid
No state Medicaid program pays for medical cannabis. Medicaid is a state and federal partnership. Federal matching funds cannot go to a Schedule I drug.
Workers' compensation
A small number of states require reimbursement. Courts in New Jersey and New Mexico have ordered carriers to pay for cannabis used by injured workers. Other states deny such claims. Rules vary by state and by case.
HSA and FSA
IRS Publication 502 lists eligible medical expenses. Cannabis is absent from that list. Spending HSA or FSA funds on cannabis can trigger income tax and a 20% penalty. Keep those purchases separate from health account receipts.
What patients pay
Cash or debit at the register. Visa and Mastercard block cannabis transactions on their networks. Prices vary by state, product, and potency. State patient registration fees run from $0 to $250 per year. Some states cut the fee for veterans, seniors, and low-income patients. A few states waive it.
Insurance for cannabis businesses
This is a separate market. Dispensaries and growers buy general liability, product liability, property, crop, workers' compensation, and directors and officers coverage. Lloyd's syndicates and a handful of US carriers write these policies. The policies cover business losses. They do not pay patient medical bills. IRS Section 280E blocks most federal deductions for cannabis businesses.
Questions to ask an insurer
- Does the plan exclude Schedule I drugs by name?
- Is the plan self-funded or fully insured?
- Does the plan cover FDA-approved cannabinoid products such as Epidiolex?
- Does state law require coverage for my case?
- Does a workers' compensation policy cover reimbursement in my state?
Bottom line
Plan on paying out of pocket. Confirm the exclusion in writing. Check state fee waivers and dispensary discount programs. For injury claims, ask a workers' compensation attorney about state case law.