Why Health Insurance Won't Pay for Medical Marijuana

If you live in a state where medical marijuana use has been legalized (38 states and DC as of late 2023), it’s tempting to assume that your health insurance will pay for it like other drugs prescribed by your healthcare provider. However, you’d be wrong; health insurance won’t pay for medical marijuana even in states where its use has been legalized.

This article will explain why health insurance won’t pay for medical marijuana when it will pay for all sorts of other drugs, many arguably more dangerous and prone to abuse.

Medical Marijuana Is Federally Illegal and a Schedule I Drug

Health insurers in the United States won’t pay for anything that’s technically illegal. Most health insurance policies include an illegal acts exclusion saying that health issues occurring due to or in association with your voluntary involvement in an illegal act are not covered (some states limit or prohibit these sort of exclusions).

Even though medical marijuana has most likely been legalized in the state where you live, it’s still classified by the federal government as a schedule I controlled substance as defined by the Controlled Substances Act. Schedule I drugs have "no currently accepted medical use," according to the Drug Enforcement Administration (DEA), and it’s still illegal to use marijuana in terms of federal law

In addition to health plan illegal acts exclusion clauses, another issue arises due to marijuana’s Schedule I designation. Schedule I controlled substances can’t be prescribed by healthcare providers the way other medications are.

Healthcare providers who prescribe controlled substances must be registered with the Drug Enforcement Administration and have a DEA number. Prescribing a Schedule I drug, even in a state where medical marijuana has been legalized, would place a healthcare provider at risk of having his or her DEA registration revoked.

Even if medical marijuana has been legalized in your state, as long as it’s considered a Schedule I drug by the federal government, prescribing it would put your healthcare provider at risk of losing his or her ability to prescribe even simple controlled substances like sleeping pills and cough syrup with codeine.

For this reason, most healthcare providers don’t prescribe medical marijuana. In states that have legalized its use, healthcare providers recommend medical marijuana rather than prescribe it (Cigna describes how a doctor can write a "certificate" that the patient can take to a medical marijuana dispensary). That brings us to stumbling block number two.

Health Insurance Won’t Pay for Medical Marijuana If It’s Not on the Drug Formulary

Even if the U.S. were to change marijuana to a schedule II or III drug—thereby allowing its prescription and decriminalizing its medical use across the country—your health insurance company probably still wouldn’t pay for your medical marijuana.

Likewise, if congressional action were to remove marijuana from the list of controlled substances altogether, your health plan probably still wouldn’t pick up the tab for your Alice B. Toklas brownies even if your healthcare provider recommended them.

Each health plan has a drug formulary, which is a list of medications it covers for health plan members. Your health plan’s pharmacy and therapeutics committee would have to add marijuana to its drug formulary before it would be a covered benefit of your health insurance.

It would be highly unusual for a health plan to add a drug to its formulary if the drug hasn’t been FDA approved. Getting new drug approval from the FDA requires clinical studies to determine both the drug’s safety and that the drug is effective.

Clinical studies are complicated and expensive to perform. So, when the FDA grants a new drug approval, it also grants a period of time in which the company given the new drug approval has exclusive rights to manufacture and sell the drug in the United States.

If you think it costs a lot now, wait until Pfizer, Merck, AstraZeneca or another big pharma company gains the exclusive right to bring marijuana to market in the United States.

Without FDA approval, it won’t get on your health plan’s drug formulary, so your health insurance won’t pay for medical marijuana. The process of getting marijuana approved would almost assuredly involve big pharma, exclusive marketing rights, and exorbitant costs. You can read more about this in an article about marijuana that the FDA published.

The FDA has, however, approved Marinol (in 1985), Cesamet (in 2006), and more recently, Syndros (in 2016). All three contain a synthetic form of THC. In 2018, the FDA approved Epidiolex, a CBD oral solution for treating seizures associated with two forms of epilepsy.

Although these drugs are not the same thing as cannabis, they can be prescribed just like any other FDA-approved medication, and do tend to be covered by health insurance plans.

Health Insurance Won’t Pay for Medical Marijuana as an Herbal Remedy

If marijuana was to be reclassified so that it wasn’t a controlled substance at all, it might become available without a prescription. However, that still wouldn't result in medical marijuana being covered by health insurance.

When a drug becomes available without a prescription, it’s removed from health plan drug formularies and you’re expected to pay for it yourself. Does your health insurance currently reimburse you for over-the-counter medications like Tylenol? Most don’t. Does it cover herbal remedies like St. John’s wort or echinacea? That’s unlikely.

In this situation, patients who would benefit from using marijuana would be able to buy it over-the-counter like any other herbal remedy. As they are now, those patients would be highly motivated to find a way to pay for it themselves. Why would your health insurance want to set a precedent of paying for over-the-counter drugs or herbal remedies that you’re willing to pay for yourself?

Will Things Change?

Even if marijuana were to be reclassified to a lower schedule or congressional action removed it from the list of controlled substances altogether, that wouldn’t be like waving a magic wand. Your health plan wouldn’t magically start paying for your medical marijuana a month or two later. Instead, it would be the beginning of a long, slow, process.

If the process ended up with marijuana being an FDA approved drug, it might eventually be covered by your health plan as a prescription drug on its drug formulary. However, that would be years, not months, down the road. If, even more surprisingly, marijuana ended up as an herbal remedy not requiring FDA approval, it remains highly unlikely that your health insurance would pay for it.

Summary

There’s more than one reason why health plans won’t pay for medical marijuana. Marijuana is federally illegal and classified by the DEA as a Schedule I drug. And without FDA approval, health plans wouldn't add it to their formularies (covered drug lists) even if the federal government legalized it and the DEA rescheduled it.

A Word From Verywell

Although health insurance does not cover medical marijuana, the majority of states have legalized medical marijuana. So while your health insurance won't pay the bill, you likely have access to medical marijuana if you need it. And as time goes by, it's possible that the rules and regulations around marijuana could be relaxed, resulting in lower costs for consumers.