Are Costs for Medical Cannabis Reimbursed?

Stephen Andrews
25 Nov 2022

You might assume that your healthcare provider covers medical cannabis costs; unfortunately, that's not how things currently are. Health insurance plans do not pay for medical marijuana, even in states where its use has been legalized. A limited number of legal states however, permit eligible MMJ users to be reimbursed for their medical cannabis costs through their workers' compensation insurance (WCI) plans. In this article, learn more about medical cannabis reimbursement in the U.S.

The reason health insurers in the U.S. won't have costs for medical marijuana covered is its status as a Schedule I substance. The federal classification means that healthcare providers can't prescribe medical marijuana like other medications. Even if you are an eligible patient who lives in a legal state. 

Schedule I drugs are considered as having "no currently accepted medical use," according to the Drug Enforcement Administration (FDA), which means marijuana is illegal when it comes to federal law. 

Healthcare providers who prescribe controlled substances must be registered with the DEA. Any prescription of a Schedule I drug, even in places where medical marijuana is legal, may result in trouble for the healthcare provider. The agency could revoke their license, losing their ability to prescribe all and any controlled substances. 

It is for this reason that the majority of healthcare providers in the U.S. cannot prescribe medical marijuana. In legal states, health providers are only able to "recommend" medical marijuana rather than "prescribe" it. 

Can Delisting Marijuana as a Schedule I Substance Help?

Delisting cannabis or rescheduling it as a Schedule II or Schedule III drug will mean decriminalization, and that will pave the way for health professional to prescribe (rather than "recommend") a range of medical marijuana products. However, your health insurance company probably still won't cover the costs for MMJ. 

A few more things need to happen before we can talk about health insurance covering the expenses of your gummies, oils, tinctures, and powders. 

First, marijuana has to be added to a drug formulary under health plans regulated by pharmacies and therapeutic committees. The drug formulary is a list of medications that are covered for health plan members. Still, a health plan can only include drugs in the formulary that the FDA has approved. 

So basically, any cannabis-based drug covered by health insurance providers has to go through the FDA as a precondition. Obtaining approval from the FDA for a new drug requires extensive clinical testing to determine the safety and effectiveness of the drug. It's a lengthy and also expensive process. 

Bottom line, getting marijuana approved would almost certainly involve big pharma, the likes of Johnson & Johnson, Pfizer, or Roche. 

Cannabis Drugs Approved by the FDA

Several medications that contain a synthetic form of THC, the earliest of which is Marinol in the 1980s, and then Cesamet and Syndros, are approved by the FDA. In 2018, the agency approved the first CBD-based drug, Epidiolex, a game-changer medicine for treating epilepsy and severe seizures. These drugs are the only exception. They can be prescribed just like any other FDA-approved medicine and are covered by health insurance.  

Worker's Compensation Insurance

Notably, a small number of states permit eligible patients to be reimbursed for their purchases of medical marijuana products under their worker's compensation insurance (WCI) plans. 

The list of states that unambiguously allow employees to have their medical cannabis expenses recovered includes Connecticut, Minnesota, New Hampshire, New Jersey, New Mexico, and New York. In some of these states, reimbursements were ordered as a result of state Supreme Court rulings issued during 2021. 

However, six other states, Maine, Massachusetts, Florida, North Dakota, Ohio, and Washington, purposely prohibit reimbursing medical marijuana-related costs. 

Other states are silent on the subject, or the law says that insurers are not obliged to reimburse employees who are injured on the job for expenses related to medical cannabis use. 

While for now health insurance can't cover most medical marijuana costs, it's worth remembering that the majority of states in the U.S. have legalized medical marijuana. People do have access to it and increasingly use medical cannabis products. More pressure will certainly build to ease rules and regulations on marihuana. Hopefully, that leads to a gradual inclusion of various cannabis medicines covered with health insurance, resulting in lower patient costs. 

Stephen Andrews