Why health insurance won’t pay for medical marijuana

If you live in a state where medical marijuana use has been legalized (37 states and the District of Columbia at the end of 2021), It’s easy to assume that your health insurance will pay for it like any other drug prescribed by your healthcare provider. But, you’d be wrong; even in states where marijuana use is legalized, Medicare won’t pay for medical marijuana.

This article will explain why health insurance doesn’t pay for medical marijuana, but instead it pays for a variety of other drugs, many of which are arguably more dangerous and prone to abuse.

Medical marijuana is federally illegal as a Schedule I drug

Health insurers in the US don’t pay for anything that’s technically illegal.Most health insurance policies include an unlawful conduct exclusion that states that health problems that occur as a result of your voluntary participation in an unlawful conduct or related to your voluntary participation in an unlawful conduct are not covered (some states restrict or prohibit such exclusions).

Although medical marijuana is likely legalized in your state, the federal government classifies it as a Schedule I controlled substance as defined by the Controlled Substances Act. According to the U.S. Drug Enforcement Administration (DEA), Schedule I drugs “have no current accepted medical use,” Marijuana use remains illegal under federal law

In addition to the health plan illegal conduct exclusion clause, another issue is due to the Schedule I designation of marijuana. Healthcare providers cannot prescribe Schedule I controlled substances like other drugs.

Healthcare providers prescribing controlled substances must be registered with the Drug Enforcement Administration and have a DEA number. Even in states that legalize medical marijuana, prescribing Schedule I drugs puts health care providers at risk of having their DEA registration revoked. Even if medical marijuana is legalized in your state, as long as it is considered a Schedule I drug by the federal government, prescribing it can put your healthcare provider at risk of losing prescribing simple controlled substances such as sleeping pills and cocaine Codeine cough syrup.

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Therefore, most healthcare providers do not Regulation Medical marijuana.In states that have legalized its use, healthcare providers recommend Medical marijuana instead of prescribing (Cigna describes how doctors can write out “proofs” that patients can take to a medical marijuana dispensary). This brings us to the second stumbling block.

Health insurance won’t pay for medical marijuana if not on drug formulary

Even if the U.S. changes marijuana to a Schedule II or III drug—thus allowing its prescription and legalizing its medical use across the country—your health insurance company may still not pay for your medical marijuana. Likewise, if congressional action removes marijuana from the list of controlled substances entirely, your health plan may still not choose a label for your Alice B. Toklas Chocolate Cake, even if recommended by your healthcare provider.

Every health plan has a drug formulary, which is a list of drugs it covers for health plan members. Your health plan’s pharmacy and therapeutic board must add marijuana to its drug formulary before it becomes a covered benefit of your health insurance.

It is highly unusual for a health plan to add a drug to its formulary if the drug is not FDA-approved. Obtaining new drug approval from the FDA requires clinical studies to determine the safety of the drug and the effectiveness of the drug. Clinical research is complex and expensive. So when the FDA grants a new drug approval, it also grants the company that received the new drug approval the exclusive right to manufacture and sell the drug in the United States for a period of time.

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If you think the cost is high right now, wait until Pfizer, Merck, AstraZeneca, or other big pharma get the exclusive rights to bring cannabis to the U.S. market.

It won’t appear on your health plan’s drug formulary without FDA approval, so your health insurance won’t pay for medical marijuana. The process of getting marijuana approval will almost certainly involve Big Pharma, exclusive marketing rights and high costs. You can learn more about this in an article published by the FDA on cannabis.

However, the FDA has approved Marinol (1985), Cesamet (2006) and most recently Syndros (2016). All three contain synthetic forms of THC. In 2018, the FDA approved Epidiolex, a CBD oral solution for the treatment of seizures associated with two types of epilepsy. Although these drugs are different from marijuana, they can be prescribed like any other FDA-approved drug and are often covered by health insurance plans.

Health Insurance Won’t Pay for Medical Marijuana as Herb

If marijuana is reclassified so that it is not a controlled substance at all, it may be available without a prescription. However, this still does not result in medical marijuana being covered by Medicare.

When a drug is available without a prescription, it is removed from the health plan drug formulary and you pay for it yourself. Does your health insurance currently reimburse you for over-the-counter drugs such as Tylenol? Most don’t. Does it include herbs like St. John’s wort or echinacea? This is unlikely.

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In this case, patients who benefit from the use of cannabis will be able to buy it over the counter like any other herb. As now, these patients will be very motivated to find a way to pay for themselves. Why should your health insurance set a precedent for paying for over-the-counter drugs or herbal remedies you’re willing to pay for yourself?

Will things change?

Even if marijuana is reclassified to a lower schedule or congressional action removes it entirely from the list of controlled substances, it won’t be like waving a magic wand. Your health plan won’t magically start paying for your medical marijuana after a month or two. Instead, it will be the beginning of a long, slow process.

If the process ends up making marijuana an FDA-approved drug, your health plan may end up including it as a prescription drug in its drug formulary. However, it will be years, not months, on the way. Even more surprising, if marijuana ends up being an herbal remedy that doesn’t require FDA approval, it’s unlikely your health insurance will pay for it.


There’s more than one reason health plans don’t pay for medical marijuana. Marijuana is federally illegal and classified as a Schedule I drug by the DEA. Without FDA approval, health plans won’t add it to their formularies, even if the federal government legalizes it and the DEA reschedules it.

VigorTip words

Although medical marijuana is not covered by health insurance, most states have legalized medical marijuana. So while your health insurance won’t pay the bill, you may be able to get medical marijuana if you need it. Over time, regulations around cannabis may loosen, reducing costs for consumers.