Medicaid for Medical Marijuana?

  • Does Medicaid cover medical marijuana? The answer is, yes and no. While some prescription drugs containing cannabinoid compounds are covered by Medicaid, what we typically think of as medical marijuana is not. In this post, we’ll discuss why that is, and go over which prescription drugs containing cannabinoids are covered by Medicaid. 

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Does Medicaid cover medical marijuana? Unfortunately, it does not. However, there are some cannabinoid-based drugs that might be covered for some patients on Medicaid without the need for a medical marijuana card. Moreover, attitudes toward medical marijuana are changing quickly and cannabis policy reforms might facilitate insurance coverage of medical marijuana some time in the future.

The problem is that in the eyes of the U.S. federal government, marijuana is still categorized as an illegal Schedule I Controlled Substance — a category reserved for drugs that supposedly have no medical use. 

Moreover, in spite of the vast amounts of research and clinical studies devoted to the healing herb, the U.S. FDA has not recognized marijuana as a prescription drug. (And there’s a good reason for this as we’ll explain.) The FDA has, however, given the green light to individual compounds produced in marijuana called cannabinoids. (And we’ll go over those shortly.)

Why should medical marijuana be covered by Medicaid?

There are two major reasons why medical marijuana should be covered by Medicaid — it saves lives and it saves taxpayers and insurance companies money.

A study by Ashley C. Bradford and W. David Bradford published in Health Affairs examined the correlation between states with medical marijuana programs and a decline in the use of prescription drugs among Medicare Part D enrollees. The report indicated that if all states had legalized marijuana by 2014, Medicaid could have saved $1 billion on prescription costs.

“Total estimated Medicaid savings associated with these laws ranged from $260.8 million in 2007 to $475.8 million in 2014,” the report states. Granted this is only 2 percent of the total Medicaid drug spending for 2014, which was $23.9 billion, but it is still substantial savings. 

The Bradfords estimate that if all states had legalized medical marijuana in 2014, “The national savings for fee-for-service Medicaid would have been approximately $1.01 billion.” This works out to an average per state savings of $19.825 million a year.

This particular study only examined conditions currently being treated with cannabis, and the prescription medications that could potentially be affected. Anxiety, depression, glaucoma, nausea, sleep disorders, psychosis, and spasticity were the conditions examined in the study. 

The results were surprising. The differences ranged from a 42 percent reduction for prescriptions used to treat nausea to a 15 percent reduction for spasticity. The study also indicated an 11 percent reduction in pain medications, 13 percent in depression prescriptions, and a 12 percent decline in psychosis prescriptions.

The researchers cited multiple clinical trials and growing evidence as to the medical efficacy of marijuana and stated:

“The common state requirement that physicians certify that patients are eligible for medical marijuana use provides significant prima facie evidence that there is currently accepted medical use.” 

The Bradfords are clear in their message and believe that the legitimization of marijuana will have a positive economic benefit. 

“In times of significant budget pressure, the possible savings of $1.01 billion nationally in spending on prescriptions in fee-for-service Medicaid is significant.”

The biggest impetus for Medicaid and Medicare to cover medical marijuana should be the significant drop in opioid use in states with legal medical marijuana dispensaries. It is well known that addiction to opioids has not only been creating a significant burden in many regions it has taken far too many lives. Comparatively, exactly zero patients have died as a result of medical marijuana use.

In the more progressive states, marijuana has been shown to help manage the cravings associated with opioid withdrawal. In those states with medical and recreational programs, prescriptions for hydrocodone dropped by 17.4 percent and prescriptions for morphine dropped by 20.7 percent. 

At the very least, the study questions the validity of marijuana’s continued categorization as a Schedule I drug by the Drug Enforcement Agency. But the DEA, unfortunately, maintains its stringent, anti-marijuana views and will continue to categorize the herb as medically useless and until Congress tells the agency otherwise.

The issue was addressed in the United States Court of Appeals for the District of Columbia. The court heard the case Americans for Safe Access, et al. v. Drug Enforcement Administration in October of 2012. The petitioners asked the court to reschedule marijuana. The suit garnered support from 70 medical professionals. The court dismissed the case in January 2013 citing the fact that congress is the federal body responsible for making the change.

Will medical marijuana ever be covered by Medicaid?

Although the huge economic savings in addition to lessening the nationwide opioid epidemic should be enough to open the door to Medicaid coverage it’s just not that simple.

Medical marijuana is still in its infancy in the U.S., and although it has shown to be a viable treatment for numerous health conditions, and although eight out of 10 doctors approve of the use of medical marijuana, no health insurance companies are willing to cover it.

This unwillingness is largely due to its Schedule I categorization. However, another obstacle is the lack of FDA approval of marijuana as a medicine. 

In order to be approved for medical use, the FDA requires a drug to undergo a thorough investigation via human clinical trials and long-term data on safety and efficacy. The problem here is that marijuana is an herbal compound. And as such, the fact of the matter is that no two buds contain the same active compounds and therefore will not produce consistent results. 

In fact, cannabis strains vary wildly in their cannabinoid content. While some strains produce as much as 30 percent THC (marijuana), others produce no THC but are high in non-intoxicating CBD (hemp). And there are scores of other components in marijuana such as terpenes, chlorophyll, flavonoids, etc. Given this fact, medical marijuana can never be approved by the FDA as a prescription drug. 

That’s not the end of the story, however. Each of the various cannabinoids produced in cannabis can be isolated to produce purified THC, CBD, CBG, etc. Moreover, these compounds can be synthesized using industrial processes. 

What about prescription cannabinoids?

Thankfully, there are some options for patients who wish to treat their conditions with cannabinoids, but who can’t afford medical marijuana without insurance coverage. There are cannabis-derived medications on the market that have been approved by the FDA for certain conditions. Physicians do not need to be certified medical marijuana doctors in order to prescribe them. 

Epidiolex, an epilepsy drug manufactured by GW Pharmaceuticals, was approved in 2018. The medication is rather expensive and could cost $32,500 annually. The patient could still end up paying between $60 and $2,400 annually even with coverage, due to the great expense of the medication.

Fortunately, the active compound in Epidiolex is cannabis-derived CBD. And CBD has been approved for over-the-counter sales. While CBD products (aside from Epidiolex) are not covered by insurance, they are generally less expensive than similar products produced from marijuana and patients can buy CBD online without a prescription

Not long after Epidiolex was approved for prescription use, the federal government removed hemp and CBD from the DEA’s list of controlled substances. The FDA followed suit by making Epidiolex and over-the-counter medication. 

Another cannabinoid that is currently flying under the radar is delta-8-THC. Delta-8 is produced from hemp-derived CBD. It offers a milder psychotropic effect than delta-9-THC. As of writing patients can purchase delta-8-THC online. However, it’s also not covered by insurance and might be “outlawed” in the future.

The FDA has approved synthetic cannabinoids for prescription use. Marinol (aka dronabinol) and Cesamet (aka nabilone) contain synthetic THC. (THC is a naturally occurring component produced in marijuana that’s commonly known for its medicinal benefits as well as its intoxicating properties).

Dronabinol has been shown to be effective at treating chronic pain including neuropathic pain. It is also prescribed for the treatment of nausea and vomiting, appetite stimulation, and weight loss prevention, largely for AIDs patients. Recently the FDA approved a liquid form of dronabinol known on the market as Syndros.

And nabilone is mainly prescribed to cancer patients for nausea resulting from chemotherapy when other medications have not proven effective. 

Some insurance policies will cover these synthetic cannabinoid medications, but not all. Patients should check their policies to ensure coverage.

Another synthetic cannabinoid drug, Sativex, is only available in Canada and the U.K. as it has yet to gain FDA approval in the U.S. It is utilized in the treatment of multiple sclerosis and spasticity and is a blend of equal parts THC and CBD.  

The generic versions of these pharmaceuticals are less expensive than the brand names. However, for patients paying out of pocket for either option, the costs can be wildly prohibitive. Medical marijuana, CBD, and delta-8-THC end up being considerably cheaper for uninsured patients. 

Will Medicaid cover medical marijuana in the future?

There is a glimmer of hope on the horizon that medical marijuana might be covered in some states. The legislative landscape of the medical marijuana industry is quickly evolving, and over time could result in cannabis being viewed as a safe, effective, and cost-saving therapy, worthy of coverage. But before this happens it needs to at least be federally legalized.

The big news, however, is that in some states, worker’s compensation has received directives to cover medical marijuana. This could be the first step toward widespread insurance coverage. The next arena could be employer-based insurance plans.

What about doctor’s visits? In New York, all medical insurers who generally cover regular doctor’s visits must still cover those visits, even if they result in a recommendation for medical marijuana. Companies, though, do not have to pay for doctor visits made for the singular purpose of getting a marijuana recommendation. This provision is also being considered by other states with medical marijuana programs. 

The legitimization and media coverage of medical marijuana will no doubt have numerous positive repercussions. Saving taxpayers and insurance companies money, alleviating the opioid epidemic, and relieving symptoms of multiple debilitating conditions are just a few of them. 

At this point, it seems just a matter of time before congress removes marijuana from Schedule I and Medicaid begins to crunch the numbers. Only then can insurance companies and Medicaid consider covering medical marijuana.

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