do you have to pay for medical marijuana

Why Health Insurance Won’t Pay for Medical Marijuana

James Lacy, MLS, is a fact checker and researcher. James received a Master of Library Science degree from Dominican University.

If you live in a state where medical marijuana use has been legalized (33 states and DC as of early 2020), it’s tempting to assume that your health insurance will pay for it like other drugs prescribed by your physician. However, you’d be wrong; health insurance won’t pay for medical marijuana even in states where its use has been legalized. Why won’t health insurance 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 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. Even though medical marijuana may have 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. 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 physicians.

Physicians 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 physician 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 physician 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 physicians don’t prescribe medical marijuana. In states that have legalized its use, physicians 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 doctor recommended them.

Each health plan has a drug formulary, 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) and more recently, Syndros (in 2016). Both 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, those who think that’s the answer to getting medical marijuana covered by health insurance are misguided.

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?

In summary, there’s more than one reason why your health plan won’t pay for medical marijuana. Even if marijuana was 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.

Learn about why health insurance won't pay for medical marijuana, and why reclassification of marijuana won't make your health plan pay either.

Medical Marijuana Helps. Now, How to Pay for It?

— Insurers don’t cover it, even when it’s legal and patients clearly benefit

by James Salwitz MD September 29, 2015

What is not to like about medical marijuana? It treats pain, vomiting, fatigue, anxiety, depression, insomnia, seizures, muscle spasms, Crohn’s disease, and allows many cancer patients to resume remarkably normal lives. It is not addictive. It does not interact with other medicines. It acts quickly and is easy to adjust. It can be consumed in numerous ways. It is safer than essentially any other drug: 1,500 Tylenol deaths in the U.S. in the last ten years; overdoses from marijuana in the entire world literature? None.

To that list, I add another: Compared to other medicines, it is downright cheap.

Tom was in my office today. He suffers from severe chemotherapy and cancer induced painful electric shock-like neuropathy of his hands and feet. You know what it feels like when your hand “falls asleep?” Think of that, times ten and all the time.

This incapacitated Tom, leaving him house and essentially chair bound. In response we put him on a cocktail of medicine, including steroids, Lyrica, Cymbalta, Neurontin, Oxycontin, and Percocet, each with its own side effects, including sleepiness, confusion, loss of taste, nausea, tremors, nightmares, narcotic dependence, and severe constipation. Trapped between the eternal burning and handfuls of drugs, he began to wonder whether if it was worth living.

We begged Tom to try medical marijuana, but he resisted this recommendation, because it seemed to conflict with his religious beliefs. Finally, when his minister gave the OK, he was prescribed one ounce of marijuana, per month, through the New Jersey Medical Marijuana Program (NJ MMP).

His neuropathy came under immediate and complete control. He stopped all the medicines, except a rare Percocet. He was able to leave his house, walk long distances, and return to life.

Here is the amazing part. Tom’s insurance company paid over $1,500 a month, for the pills. One month of marijuana, through a registered New Jersey dispensary, cost under $600. Not only was there a life-changing improvement in his symptoms, with essentially no side effects, there is a 65% marijuana discount.

Great story, right? Happy ending? The NJ MMP saves the day?

Unfortunately, no. You see, Tom may soon have to stop using marijuana and resume his prior costly caustic cocktail of drugs. Why? His health insurance company will pay for a pile of pills, but not marijuana. Tom must pay. Federal law prohibits the medical use of marijuana; therefore, no insurance company can legally afford to pay for cannabis.

So, let’s do a net calculus. If Tom stops using medical marijuana, he will not have to pay the $500 a month that a disabled cancer patient cannot afford. Instead, he will experience pain, decreased function and increased drug side effects. Judging by the way things were headed, when he was on pills, his life may even be shortened. The insurance company will have to pay $1,600 or more a month, as well as the cost of any medical complications or side effects. In other words, Tom will get worse care at far greater cost: the American way.

It is time to legalize medical marijuana throughout the United States. It has fewer side effects than any alternative. It is a better drug for many problems. It is good healthcare finance. The insurance industry should demand it. Legislators support it. Moreover, patients, in desperate need, would be transformed by it.

Insurers don't cover it, even when it's legal and patients clearly benefit