Quick answer
No. Health insurance, Medicare and Medicaid don’t pay for medical marijuana from a dispensary, because it isn’t an FDA-approved drug. That’s still true after an April 2026 federal order moved state-licensed medical marijuana to Schedule III. Your plan may cover FDA-approved drugs made from or related to cannabis, like Epidiolex, Marinol, Syndros and Cesamet, when they’re prescribed for approved uses.
Key takeaways
- Insurers, Medicare and Medicaid don’t cover dispensary medical marijuana.
- Since April 28, 2026, state-licensed medical marijuana has been in Schedule III under federal law. Other marijuana, including recreational, is still Schedule I while a broader rescheduling decision is pending.
- Rescheduling didn’t make medical marijuana an FDA-approved drug, which is what health plans generally cover.
- FDA-approved cannabinoid drugs can be covered by your drug plan, often with prior authorization.
- 41 states, three territories and DC allow medical use of cannabis, according to NCSL.
On this page
Why insurance doesn’t cover medical marijuana
Health plans pay for drugs that are FDA-approved for specific uses and on their formulary. Dispensary marijuana hasn’t gone through FDA approval, and its strength and dosing aren’t standardized, so it doesn’t fit how drug coverage works. Medicare drug plans can only cover FDA-approved drugs, and Medicaid follows similar rules.
What changed in 2026
| Type | Federal status as of September 2026 |
|---|---|
| State-licensed medical marijuana | Schedule III since April 28, 2026 |
| All other marijuana, including recreational | Schedule I; a DEA hearing on moving it ended in July, and a decision is pending |
The change lets state medical marijuana businesses register with the DEA and changed some tax rules for them. It didn’t change FDA approval, so insurance coverage hasn’t changed.
FDA-approved drugs your plan may cover
| Drug | FDA-approved for |
|---|---|
| Epidiolex (cannabidiol) | Seizures from certain conditions, including Lennox-Gastaut syndrome and Dravet syndrome |
| Marinol and Syndros (dronabinol) | Nausea from chemotherapy, and weight loss in people with AIDS |
| Cesamet (nabilone) | Nausea from chemotherapy |
If you’re in cancer treatment, ask your doctor whether one of these drugs could help; see can cancer patients get health insurance. Store-bought CBD products aren’t covered either; see does health insurance cover CBD oil. For how drug coverage works, see does health insurance cover prescription drugs.
Paying for medical marijuana
Expect to pay out of pocket. Some dispensaries offer discounts for veterans, seniors or people with low incomes, so ask.
Taxes and HSAs are unsettled. Before April 2026, IRS rules said you couldn’t count controlled substances that are illegal under federal law as medical expenses. After the rescheduling, some tax advisers say state-licensed medical marijuana may now count, while Treasury and the IRS said they’d issue guidance on the tax effects. Check with a tax professional and your HSA administrator before using HSA money.
Medicare and Medicaid don’t cover medical marijuana. For other help with health costs on a low income, see health insurance for low-income families.
Choosing a plan
If you use an FDA-approved cannabinoid drug, check each plan’s formulary and prior authorization rules when you compare. Formularies differ between insurers, which is one reason rates differ between companies. See comparing health insurance plans and how to switch health insurance companies.
Compare plans in your area: see quotes by ZIP code.
Frequently asked questions
Will insurance cover medical marijuana now that it’s Schedule III?
No. Rescheduling didn’t make it FDA-approved, and health plans generally cover only FDA-approved drugs.
Does Medicare cover medical marijuana?
No. Medicare drug plans may cover FDA-approved cannabinoid drugs, like dronabinol, for approved uses.
Can I use my HSA for medical marijuana?
It’s unsettled. Ask a tax professional and your HSA administrator before you do.
Does insurance cover CBD oil?
Only the prescription drug Epidiolex, for approved uses. Over-the-counter CBD isn’t covered.
Sources
This article is general information, not medical, legal or tax advice. Last reviewed September 2026.