The question of whether health insurance covers medical marijuana (MMJ) is complicated by conflicting state and federal laws, resulting in a general lack of coverage across private, Medicare, and Medicaid plans. Although cannabis is increasingly legalized for medical use in states across the U.S., the health insurance infrastructure is governed by federal regulations that do not recognize it as a legitimate medicine. This creates a challenging financial landscape for patients who rely on MMJ to manage their health conditions.
The Federal Barrier to Coverage
The primary obstacle to insurance coverage for medical marijuana stems from its classification under the federal Controlled Substances Act (CSA). Cannabis remains classified as a Schedule I substance, meaning the federal government considers it to have a high potential for abuse and no accepted medical use. Because of this federal status, all major health insurance providers, including those administering federal programs like Medicare and Medicaid, are legally prohibited from reimbursing for the product itself.
Insurance companies typically only cover medications that have received approval from the Food and Drug Administration (FDA). Since whole-plant cannabis has not been approved by the FDA for general medical use, it cannot be processed through standard pharmacy benefit management systems or included in an insurer’s formulary. An exception exists for synthetic or cannabis-derived medications, such as Epidiolex, which are FDA-approved and may be covered under a prescription drug plan like Medicare Part D.
State-Specific Coverage Mandates and Exceptions
Despite the federal prohibition, a few states have created narrow exceptions within their workers’ compensation systems, which are state-regulated insurance programs for work-related injuries. Judicial rulings or administrative decisions in a handful of states have mandated reimbursement for medical marijuana. For example, New Hampshire, New Jersey, New Mexico, and New York have seen court cases requiring carriers to cover the cost of MMJ used to treat chronic pain or other qualifying work-related injuries.
These exceptions are highly specific and do not apply to general health insurance plans regulated under federal law. Attempts by states to mandate that commercial health plans or state-level Medicaid programs cover medical cannabis have been widely challenged in federal court. Federal judges have consistently ruled that these state-level mandates are preempted by the federal CSA, meaning insurers cannot be compelled to cover a federally illegal substance.
Related Healthcare Costs That Are Covered
While the cannabis product purchased from a dispensary is not covered, standard health insurance plans often cover the costs associated with diagnosing the underlying condition that qualifies a patient for medical marijuana use. Diagnostic testing required to confirm a qualifying condition, such as multiple sclerosis or cancer, is typically covered as part of standard medical care. Physician visits for the ongoing management and follow-up care of the underlying chronic condition are also generally covered, provided the doctor accepts the patient’s insurance.
However, the specific steps required to enter a state’s medical marijuana program are usually the patient’s financial responsibility. This includes the fee for the physician’s certification visit—a separate consultation to recommend cannabis—and the state’s registration or identification card fee. These administrative and certification costs are considered out-of-pocket expenses.
The Path to Future Coverage
Widespread insurance coverage for medical marijuana is dependent on fundamental changes at the federal level. The most significant action would be the descheduling or rescheduling of cannabis under the CSA. Moving cannabis from Schedule I to a less restrictive category, such as Schedule III, would remove the federal prohibition that currently prevents insurers from legally covering the substance.
Such a change would enable the FDA to approve specific cannabis formulations as medicine, allowing them to be manufactured, prescribed, and dispensed through traditional pharmacies. Once an FDA-approved product is available through a standard pharmacy channel, it can be added to an insurer’s drug formulary and qualify for reimbursement. Until the federal government reclassifies cannabis, the conflict between state-legal medical programs and federal law will block broad insurance coverage.