Everything You Need to Know About Medical Marijuana and Health Insurance
Posted by Marijuana Doctors on 10/31/2018 in Medical Marijuana
Updated on January 28, 2019. Medical content reviewed by Dr. Joseph Rosado, MD, M.B.A, Chief Medical Officer
Medical marijuana is steadily gaining ground as a valuable treatment option for hundreds of different health conditions. Medical marijuana has treatment applications for medical issues affecting nearly every part of the body. It has been shown to control symptoms for patients with inflammatory bowel diseases, ease pain levels in cancer patients, help patients cope with post-traumatic stress disorder and much more.
Patients who have access to legal medical marijuana have a wide variety of options. Cannabis that contains the chemical THC is the most commonly discussed form of medical marijuana, but there are also different types of strains — some of them non-psychoactive.
The various strains of medical marijuana include:
- Cannabis butter
- Cannabis oil
- Cannabis topical ointment
- Cannabis spray
- Cannabis tincture
- Marijuana flowers also called buds
- Marijuana edibles
The strain and form of medical marijuana your doctor recommends will depend on your medical needs and personal preference.
While many governing bodies and healthcare regulatory organizations remain skeptical, doctors and patients are speaking out in favor of medical marijuana. A study found approximately eight out of 10 doctors approve of the use of medical marijuana, and another survey found 92 percent of patients who use medical marijuana said it alleviates their symptoms, according to The Washington Post.
Although medical marijuana has a preponderance of support from physicians and patients and a growing body of evidence to indicate the benefits of its use, patients still must think about how to pay for it. The big question: Is medical marijuana covered by insurance?
Do Insurance Companies Cover Medical Marijuana Use?
The short answer to this question is no. First, both recreational and medical marijuana are considered illegal controlled substances under federal law. The Controlled Substances Act considers marijuana a Schedule I drug. This class of drug, which also includes heroin, LSD and Ecstasy, is defined as having no medical value and a high danger of addiction. With this federal law in place, it’s unlikely insurance companies will cover medical marijuana.
FDA approval is another hurdle medical marijuana must face before gaining insurance coverage. Generally, insurance companies will not cover a drug that has not received FDA approval. Currently, the FDA has not approved medical marijuana for any indication. Several things need to happen before the FDA considers approving marijuana for medical applications.
First, an investigator will need to submit an investigational new drug (IND) application to the FDA. The IND will include a thorough overview of the investigators’ qualifications, a proposed plan for human clinical trials for the drug and declaration of the human subjects’ rights and safety. Thus far, the FDA has not approved a marketing application for medical marijuana.
Although the FDA has yet to take any concrete steps toward approval, the regulatory body has spoken about supporting medical marijuana research. The FDA does work with the Drug Enforcement Administration (DEA) and National Institute on Drug Abuse (NIDA) to support clinical research of medical marijuana. Before approval, the FDA will want clinical studies to provide concrete, long-term data on the safety and effectiveness of marijuana as a medical treatment.
Obamacare is the nickname for the Patient Protection and Affordable Care Act (PPACA) put in place under President Barack Obama’s administration. Insurance policies under the PPACA are administered through federal and state exchanges. These insurance companies will also need to wait until the federal law regarding marijuana is changed, and the FDA approves its use. Though the support for medical marijuana is high, medical marijuana insurance could still be many years away.
In some states, change is already starting to happen. For example, the state of New York has released an important clarification of insurance law. Insurers in the state will need to cover physician’s visits relating to medical marijuana, with a few caveats. Obtaining a recommendation for medical marijuana cannot be the sole purpose of the visit. Instead, patients need to be diagnosed with a condition approved for a medical marijuana recommendation.
Once they can get a medical marijuana card, they can discuss getting a recommendation during one of their doctor’s visits and insurers cannot deny the claim. This a positive step forward in the push to gain insurance coverage for medical marijuana.
A few questions people continue to ask are:
- Is medical marijuana covered by Medicare?
- Is medical marijuana covered by Medicaid?
Right now, the answer to all those questions is no.
Medicaid, Medicare and Marijuana
Medicare and Medicaid are part of the Centers for Medicare and Medicaid Services, which is a federal entity governed by federal law. Being under federal law means Medicare and Medicaid cannot cover medical marijuana at this time. But it may be advantageous to these programs to cover medicinal marijuana in the future.
A study published in Health Affairs in 2017 found Medicare could have saved $1.01 billion had medical marijuana been legalized nationally and covered by the government’s insurance program. The savings would have resulted from medical marijuana replacing more costly prescriptions for a variety of ailments.
Additionally, in states that currently have legalized medical marijuana, Medicare prescriptions for opioids are significantly lower. Prescriptions for morphine dropped by 20.7 percent and hydrocodone prescriptions fell by 17.4 percent in states with medicinal marijuana dispensaries.
Currently, if your doctor recommends using medical marijuana and you have either Medicare or Medicaid, you will pay for the treatment out of pocket. As a Schedule I drug, federal health insurance plans will not cover the costs of marijuana or cannabis-based medicines. The costs incurred to cover medicinal marijuana will not count toward your Plan B deductible nor will your Medicare prescription add-on cover it.
If you have health coverage through the Veterans Administration (VA), you may use medical marijuana without fear of losing your benefits. If you currently use marijuana, discuss it with your VA physician to give your doctor the best picture of your overall health. Should you need a marijuana recommendation, note that VA physicians cannot recommend this substance.
Also, you cannot ask a VA doctor to recommend you for a marijuana study. VA health benefits do not cover the costs of medical marijuana from any facility. Also, if you do use medical marijuana, you cannot bring it onto VA property per federal laws, which overrule any state statutes when you’re on VA land.
In the meantime, most patients will have to pay out of pocket for their medical marijuana and any doctor’s office visits related to medical marijuana.
What About Health Savings Accounts or Flexible Spending Accounts?
Health savings accounts (HSAs) are add-ons to high-deductible health insurance plans that allow you to pay for things your insurance won’t. These accounts are tax-deductible, and the funds are available to you for everything from co-pays to over-the-counter medications. At the end of the year, whatever money you have in your HSA gets rolled over to the next year.
Another type of health spending account is a flexible spending account (FSA). You start with a percentage of your income in this account at the beginning of the year. Like HSAs, FSAs are used to cover medical expenses your insurance won’t. But these plans are tied to your employer-provided health insurance and you cannot move the money if you change jobs. Additionally, if you have an Obamacare insurance plan you purchased from the exchange, you do not have the option of getting an FSA. Unlike HSAs, the money in an FSA must be spent or lost by the end of the year.
Unfortunately, while HSAs and FSAs will pay for doctor visit co-pays, they cannot be used to purchase substances the federal government considers illegal, including medical marijuana. Even if medicinal cannabis is legal in your state, you cannot use the money from your HSA or FSA to cover it, though you may be able to use it to pay for physician visits. Check with your HSA or FSA to see if you are allowed to pay for a consultation with a doctor exclusively to get a marijuana recommendation.
If you accidentally misuse your funds, you will have to pay the taxes on what you misused plus an additional 20 percent in penalties when you file your income taxes. While having an HSA or an FSA can help with medical spending, neither of these will help you with paying for medicinal marijuana.
Where Is Medical Marijuana Legal?
Although medical marijuana is illegal under federal law, several states have passed laws allowing the use of medical marijuana, and several other states are considering doing the same. The Justice Department announced that the federal government would not interfere with state laws allowing the use of medical or recreational marijuana. Many states, and Washington, D.C., have laws that allow medical marijuana use and programs.
The laws in each state vary on several factors including:
- Possession limits: Some states limit how much marijuana you can have based on weight, while others base it on how long a supply will last. For example, Washington, D.C., limits patients to possession of two ounces of dried marijuana, while Pennsylvania law dictates patients can only possess up to a 30-day supply, according to ProCon.org. Some state laws are detailed enough to regulate what form of marijuana you can have. Some states allow patients to have a certain number of plants, while others — like Minnesota — allow patients to have a certain amount of non-smokable marijuana.
- Patient registry or identification cards: Most states have laws in place that require medical marijuana patients to have an identification card and/or be part of a patient registry. Some states, like Arkansas and Florida, have pending legislation that deals with medical marijuana registries and identification cards.
- Recognition of patients from other states: Some states recognize medical marijuana patients from other states. Arizona and Rhode Island recognize out-of-state patients without restrictions. States such as Alaska and Delaware only recognize medical marijuana patients who have conditions on their approved list. States like Maine and Michigan recognize out-of-state patients’ right to possess medical marijuana, but those patients are not approved to purchase anything from dispensaries. Most states that have legalized medical marijuana do not recognize out-of-state patients.
- Allowance for dispensaries: Nearly all states that have legalized medical marijuana allow dispensaries, but some state laws have caveats. For example, West Virginia dispensaries cannot sell the whole flower for smoking. Instead, dispensaries in this state can sell products meant to be vaporized.
- Allowance for retail sale: A handful of states have legalized marijuana for medical purposes and recreational use. These states include Alaska, California, Colorado, Washington, Maine, Massachusetts, Nevada, and Oregon.
All patients should make sure they are familiar with their state’s laws and the laws of any state they plan to visit.
While medical marijuana is legal in many states, this does not mean that patients’ health insurance will provide coverage. States with more progressive medical and recreational marijuana laws may be the first to push for a movement toward insurance coverage.
Have There Been Attempts to Approve Medical Marijuana for Insurance Coverage?
Medical marijuana may not be covered by insurance now, but that does not mean the issue hasn’t been discussed. In October 2012, the United States Court of Appeals for the District of Columbia heard the case Americans for Safe Access, et al. v. Drug Enforcement Administration. The petitioners brought the case before the court to change marijuana’s drug classification.
The petitioners argued marijuana should no longer be a Schedule I drug. Changing the drug’s classification would be a significant step toward changing federal marijuana laws and opening the door to medical marijuana and health insurance coverage. The petitioners had support from 70 medical professionals, according to Insurance Quotes.
Ultimately, the court dismissed the case in January 2013. Though marijuana remains a Schedule I drug, the case was an indicator of shifting sentiment. In 2016, the DEA reviewed the drug classification of marijuana again. Marijuana remains a Schedule I drug, but the DEA has taken steps to allow more research into the medical value of marijuana.
At the beginning of 2017, a New Jersey judge made a landmark ruling involving a workers’ compensation case. A lumber worker testified on his legal use of medical marijuana to treat neuropathic pain in one of his hands. The judge ruled workers’ compensation would have to cover the costs of his medical marijuana.
A similar case occurred in Canada. The Nova Scotia Human Rights Commission ruled an insurance company would have to cover the medical marijuana costs for a man who suffers from chronic pain caused by a car accident. While neither of these cases means widespread insurance coverage, they do open the door for a larger discussion and movement toward more coverage.
The opioid epidemic in the United States is another potential argument for general legalization and insurance coverage of medical marijuana. Opioids are a class of painkillers that include drugs hydrocodone, morphine, oxycodone, fentanyl, and heroin. Many opioids are legally prescribed, but abuse, addiction, and deaths related to these drugs are creating a significant burden. The National Institute on Drug Abuse states:
- In 2015, more than 33,000 people died in the United due to opioid overdose
- Between 21 and 29 percent of patients with an opioid prescription misuse the drugs
- Opioid misuse costs $78.5 billion each year in the United States
Medical marijuana is increasingly being discussed as an alternative to opioids, a class of drugs that is marked with high levels of abuse and addiction. A physician at Saint Francis Hospital and Medical Center in Hartford, Conn., is leading a study that will compare the efficacy of opioid and marijuana as a treatment for acute pain.
Marijuana has the potential to have an impact on the opioid epidemic by serving as an alternative treatment for acute and chronic pain. Additionally, marijuana has been shown to help manage the cravings associated with opioid withdrawal. If enough clinical evidence is amassed to show marijuana’s potential to make a difference in the opioid epidemic, widespread legalization and health insurance coverage may come closer to being a reality.
Will Medical Marijuana Raise Patients’ Insurance Rates?
If you elect to use medical marijuana, you could find yourself with higher insurance rates on everything from life insurance to driver’s coverage. Despite the likelihood of seeing higher rates, never lie on your insurance application form about your marijuana use. If you falsify your cannabis use, you could face even more troubles with the law from an insurance fraud charge or get dropped from coverage.
How Marijuana Affects Life Insurance
Depending on whether you have a doctor’s recommendation to use medicinal marijuana, you may see a spike in your life insurance rates. When you apply for most life insurance policies, you must undergo a health exam, including urine and blood tests. The results from these tests will verify your marijuana use in addition to your overall health. Companies treat marijuana use differently. Some insurance providers, such as John Hancock, consider any marijuana smoking to pose the same risk, and warrant the same rates, as tobacco use. Other companies examine your frequency of use and whether your doctor has recommended you use it. Carefully evaluate the policies of the insurance providers you are considering to see their official stances on marijuana use.
Your life insurance company may not necessarily agree with your doctor about whether the severity of your condition requires you to use medical marijuana. If the company does see a need for you to supplement your treatment with medicinal marijuana, the seriousness of the condition itself could increase your rates. So, even if your marijuana use does not raise your life insurance premiums, you could still pay more because you have a health condition that requires you to pay extra. Prudential, Minnesota Life and SBLI are some of the providers that use your condition to determine your rates if your doctor recommends medical marijuana.
Does Marijuana Affect Auto Insurance?
Auto insurance covers the car, not the driver. That’s why if you need medicinal marijuana, your insurance premiums for your vehicle likely won’t increase unless your marijuana use contributes to dangerous driving behaviors.
Though proving you were under the influence of marijuana during an accident is difficult, if tests show you were impaired, you could get a ticket for a DUI, which covers drugs and alcohol. A DUI raises your premiums an average of 77 percent, second only to a hit-and-run accident. If using medicinal marijuana causes you to wreck your vehicle or get ticketed, your insurance company will find out and raise your rates. To avoid this, be responsible and don’t drive if your medicinal marijuana impedes your reaction times or judgment. Follow this same policy with any medicines you might take to keep your auto rates down and avoid accidents.
Will Dispensaries Accept Medical Insurance?
Marijuana dispensaries do not currently accept medical insurance. This refusal to accept insurance stems from the reason health insurance cannot cover cannabis at all. The illegal status of marijuana as a Schedule I substance on the federal level results in many organizations refraining from conducting business with marijuana sellers, including insurance companies and banks. Many dispensaries are cash-only services.
In some areas, though, debit cards are accepted through a third-party company such as CanPay. With these systems, you connect your CanPay account to your bank’s checking account. When using your CanPay account, you deduct money straight from your bank, as though you used an ATM card. Third-party debit systems circumvent some of the problems banks have with dispensaries.
Paying the dispensary directly with credit cards is difficult because major card companies, Visa and Master Card, and banks have declined to allow their services used for purchasing cannabis. The legality of buying marijuana in your state does not make a difference. Because marijuana remains illegal on the federal level, making purchases at dispensaries has been relegated to cash or the third-party debit companies.
Since insurance will not pay for marijuana, you cannot use it at a dispensary. When purchasing medical marijuana from a dispensary, bring cash. Many have ATMs on-site for cash withdrawals, but these machines have surcharges. The only other option for purchasing cannabis is to use the third-party debit system. CanPay recently announced a new means of allowing online purchasing of cannabis in states where it’s legal for pickup in the shop.
Having a lack of assistance from medical insurance in paying for medical marijuana may cause some patients to wonder whether they can afford this treatment option. It’s best for these patients to discuss their concerns with their doctor. For those with a serious enough condition to warrant a doctor’s recommendation for medicinal marijuana, paying for it should be the least of their worries.
What Does This Mean for Patients?
The current landscape leaves patients with two choices: pay for medical marijuana out of pocket or choose to use drugs covered by their insurance plan.
Out-of-pocket costs will vary greatly depending on how much medical marijuana you need to control your symptoms, the grade of cannabis you purchase and where you live. The average cost for legal marijuana sold by a government program is approximately $15 per gram, according to the Medical Marijuana Association. But, if you are purchasing a high-grade strain of marijuana, the price could be as high as $60 per gram.
Costs vary based on what type of marijuana product you want to purchase. Edibles will generally cost $2 to $5 for every dose included, while bottled tinctures could cost between $15 and $50, according to Cost Helper.
When it comes to geographic location, the cost can vary greatly. Here are the five least expensive and most expensive states for marijuana, according to Forbes.
Least Expensive States for Medical Marijuana (per ounce of high-quality marijuana)
Most Expensive States for Medical Marijuana (per ounce of high-quality marijuana)
Generally, prices are markedly lower in states that have legalized marijuana for medicinal and/or recreational use.
If patients do not want to pay out of pocket or cannot afford the price of medical marijuana in their state, the other option is exploring drugs that health insurance does cover. There are currently some legal, FDA-approved synthetic cannabinoids. These alternatives to medical marijuana include Marinol (dronabinol) and Cesamet (nabilone). As synthetic options, both drugs contain manmade THC, which occurs naturally in marijuana.
Marinol, available as the generic dronabinol, is one completely legal alternative to medical marijuana. The FDA has approved this drug for treatment of nausea and vomiting related to chemotherapy and as an appetite stimulant in AIDS patients who suffer from weight loss.
Studies have shown this drug does help manage nausea, vomiting and appetite loss. Cesamet, generic nabilone, is FDA-approved for similar indications. It is prescribed to chemotherapy patients when all other anti-nausea medication has failed.
Both Marinol and Cesamet are prescribed in pill form. In addition to nausea and appetite loss, these drugs can be used to manage pain in people with multiple sclerosis. Last year, the FDA approved a liquid form of dronabinol, also known as Syndros.
Patients will need to check with their insurance policies to ensure it will cover these particular drugs. Patients should also discuss potential side effects of these drugs.
If patients’ insurance policies do not cover these drugs or this treatment is not effective at curbing pain, opioids will likely be the next option in pain management. It is important to weigh the potential side effects against the benefits.
Opioids can be highly addictive, particularly when used over long periods. Opioids are at an elevated risk for abuse. Approximately four percent to six percent of patients who abuse prescription opioids eventually turn to heroin, and 80 percent of heroin users started by abusing prescription opioids, according to the National Institute on Drug Abuse. Opioids can be responsibly prescribed and used, but patients should always be aware of potential risks.
When you are deciding whether to pay for medical marijuana out of pocket, consider all your options and talk with your doctor to find the best choice for you.
Does Medical Marijuana Cost More Than Other Drugs?
Though patients pay out-of-pocket for medicinal marijuana, this option may still cost less than prescription drugs, especially when comparing cash payments. Even insurance does not always cover the complete cost of the medicine. The discounted price with insurance for many of these drugs could be higher than purchasing medicinal marijuana from a dispensary.
The epilepsy drug Epidiolex from GW Pharmaceuticals is slated to cost each patient $32,500 annually. Even if insurance covers some of the costs, a patient could still pay between $60 and $2,400 a year. This drug contains CBD but not THC. Though it is the first FDA-approved cannabis-derived medicine, doctors will not be allowed to prescribe it until the FDA reclassifies CBD from its current Schedule I status.
GW also makes Sativex (nabiximols) which has yet to receive FDA approval for its blend of equal parts THC and CBD. This drug is used to treat multiple sclerosis spasticity. Prices for this drug cannot be determined yet until it receives FDA approval for use in the United States. As a proprietary blend, it may have a similarly high cost to Epidiolex.
The synthetic cannabinoid Marinol also has a high price tag. For 60 2.5-milligram capsules, this drug costs $692. For 10-milligram capsules, the cost rockets to $2,622.04 for 60 doses. Purchasing the generic version of this drug saves some money, but medicinal marijuana may still cost less. Dronabinol costs between $93.11 and $255.57 for a 60-count bottle of 2.5-milligram capsules. The range accounts for differences in prices between generic manufacturers and pharmacies. All prices indicate the cash amount when paying without insurance.
Additionally, in some instances, the standard prescriptions will not suffice to control symptoms. For pain, doctors often resort to prescribing opioids as a next step. Opioids are highly addictive, leading to life-long drug dependency for some. The opioid crisis in America is real, and a recent study has shown medical marijuana may help fight it. In the study, 46 percent of survey respondents reported using marijuana instead of prescription drugs. And of the surveyed, 35.8 percent used medical marijuana instead of opioids. Other drugs replaced by survey participants included benzodiazepines — antianxiety drugs — and antidepressants.
When using medical marijuana as a replacement for these natural and synthetic cannabinoids, patients can save money. But to obtain a medicinal marijuana recommendation, the patient needs to make an appointment with a doctor. In some instances, that visit may be covered by insurance, even if the recommended treatment is not.
What Are the Costs of Doctors Visits to Acquire Marijuana Recommendations?
The legality of insurance covering doctors’ visits for marijuana recommendations remains murky. But the ability to pay for a visit using your insurance could be covered, depending on where you live.
New York state, for instance, clarified in 2017 its insurance laws governing medical coverage for doctor visits where marijuana is discussed. According to the New York Health Bureau Chief Lisette Johnson, insurers who typically cover regular doctor visits must still cover those visits, even if they result in a recommendation for medical marijuana. Companies, though, are not required to pay for doctor visits made for the purpose of getting a marijuana recommendation. Always be clear and honest with the physician’s office about your reasons for making an appointment, even if it results in having to pay for the visit. This truthfulness will prevent insurance fraud allegations or problems with the insurance company.
In most states, to be allowed to purchase medical marijuana, you must have your doctor give you a recommendation or certificate to be placed on a state database of those approved to purchase cannabis. Being on this database makes it possible to legally obtain marijuana for medical reasons in the state. The status on this list requires regular renewal, which means returning to the doctor for follow-up visits. With inclusion on the database comes an identification card, awarding marijuana purchasing privileges. You need doctor visits to qualify and continue to take medical marijuana, but if your insurance won’t cover the visits, what should you do?
To save money on out-of-pocket costs, ask your doctor’s office if you can get a cash discount. Some will offer these. Or discuss a payment plan with the office. If you live in a state like New York where insurance covers general physician visits even if you get a marijuana recommendation, see if you can combine appointment needs. If you have a chronic condition that requires marijuana for treatment or management, you likely will need to see your doctor on a regular basis for physical exams and continuing wellness visits. Talk to your insurance company to see if such appointments are covered. Knowledge is power when it comes to paying for your medical costs.
What Would a Future With Marijuana Health Insurance Look Like?
There are small steps toward insurance coverage for medical marijuana, but widespread coverage has yet to be realized. This coverage could change years down the road or sooner than expected. More states are legalizing not only medical marijuana but also recreational marijuana because of the potential for significant revenue.
Colorado generated $200 million in tax revenue in a single year, while Washington generated $256 million, according to the Los Angeles Times.
As the pendulum slowly swings in favor of medical marijuana, a future with health insurance coverage seems more likely. What would this future look like? Already workers’ compensation has been directed to cover medical marijuana in many cases. Workers’ compensation might be the first place we see widespread coverage.
Employer-based insurance plans could be next. These plans are small compared to large national insurance companies. The size of these plans allows them a greater degree of flexibility.
If national plans were to offer coverage, they might simply decide to cover medical marijuana as they would any other drug. Alternatively, insurers could cover cannabis under a prescription plan. A prescription plan operates separately from a patient’s main insurance policy and covers only the costs of prescription drugs.
If patients could use their insurance to help pay for their medical marijuana, there are issues to consider. Insurance companies would have the ability to raise premiums significantly, citing the cost of covering a patient who needs an expensive drug.
More employee protection is another possibility in the future of widespread insurance coverage. Currently, employers in many states have the option to make decisions based on a desire for a drug-free workplace. Companies have the option to rescind job offers if a patient tests positive for marijuana.
In some states that have legalized medical marijuana, employees who are authorized to use medical marijuana cannot be fired for testing positive on a drug screening. But, those protections are far from universal. If medical marijuana receives FDA approval and coverage from large, national insurers, more protections for medical marijuana patients are likely to follow.
Of course, national insurers will be unlikely to accept coverage of medical marijuana before it receives full FDA approval. Once it does, large insurers may be more amenable to ironing out the details of medical marijuana coverage. Until then, most patients will need to pay out of pocket for their medical marijuana.
If you have decided medical marijuana is the right choice to help you manage your symptoms, the next step is finding the right doctor and dispensary to meet your needs. Search to find a physician or dispensary near you. Sign up for our newsletter to keep on top of the latest medical marijuana news. We are here to help you get the medical treatment you need.