Since 2018, Medicare Advantage Plans have had flexibility in what they cover, as the Bipartisan Budget Act of 2018 allowed plans to expand coverage to include Special Supplemental Benefits for the Chronically Ill. Supplementary benefits can cover things not directly related to health for people with chronic illnesses, if the services make them healthier or improve their function.
Unfortunately, a new CMS rule that's going into effect in 2026 is prohibiting some common services that could accomplish this goal, despite Medicare Advantage plans trying to cover them -- including one increasingly popular treatment.
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Medicare Advantage plans asked about covering this popular item
The new CMS rule addresses requests on the part of Medicare Advantage organizations to cover a service senior patients are demanding in increasing numbers: cannabis.
According to the text accompanying the new rule, "CMS has received inquiries from MA organizations about whether they are permitted to offer cannabis-based products as a supplemental benefit. In response to these inquiries, CMS has stated that medical marijuana or derivatives, such as cannabis oil, cannot be covered by MA organizations, as they are illegal substances under Federal law."
Interest in cannabis products has been growing, with an NYU study published revealing 7% of older adults were current cannabis users in 2023, compared to 4.8% in 2021. With more retirees turning to medical cannabis to address health issues, it's not surprising Medicare Advantage Plans need clarity on coverage.
CMS says cannabis can't be included in coverage
CMS has a clear answer now. With the 2026 rule change, CMS listed cannabis as a product that cannot be covered, even as a supplemental benefit.
"Medical marijuana or derivatives, such as cannabis oil, cannot be covered by MA organizations, as they are illegal substances under Federal law," the rule says.
If retirees want these products, they'll need to pay for them by making wise investment choices to generate income to cover the cost.
