Medicare Advantage plans (MA plans) have enjoyed a degree of latitude since 2018 to expand their covered services through what are called Special Supplemental Benefits for the Chronically Ill (SSBCI). This flexibility, enacted as part of the Bipartisan Budget Act of 2018, permitted these plans to cover supplemental services that might not traditionally fall under medical benefits but could contribute positively to the health or functional status of individuals living with chronic conditions.
The essence of this expanded coverage is to support treatments and services that aid in maintaining stability or improving health outcomes, even if those treatments are not conventionally medical. For example, such supplemental benefits might involve non-medical support or innovative therapies tailored to the complex needs of chronically ill beneficiaries.
Despite this broader scope, a new rule issued by the CMS and set to take effect in 2026 imposes notable limits. Specifically, the CMS has explicitly prohibited Medicare Advantage plans from covering cannabis-based products, even as supplemental benefits. This represents a significant restriction in light of the evolving landscape of health treatment preferences and the rising interest in cannabis among older adults.
The inquiry prompting this clarification arose because multiple Medicare Advantage organizations had approached CMS seeking guidance on whether they could offer cannabis or cannabis-derived products as part of their supplemental benefits. This reflects the growing demand from beneficiaries for access to medical marijuana treatments.
According to the published rule, CMS's response was unequivocal: because cannabis and its derivatives remain illegal under federal law, they cannot be included as a covered benefit under Medicare Advantage plans. The text of the rule states, "Medical marijuana or derivatives, such as cannabis oil, cannot be covered by MA organizations, as they are illegal substances under Federal law." This restriction applies regardless of any state-level changes in cannabis legislation.
The prevalence of cannabis use among older adults has been on the rise, adding context to why Medicare Advantage plans sought clarity. A 2023 study from a major university indicated that approximately 7% of older adults reported current cannabis use, up from 4.8% in 2021. This upward trend suggests a growing reliance on cannabis products by retirees to potentially address various health ailments.
However, with the CMS rule firmly barring coverage of cannabis products, retirees who choose to utilize such treatments will need to bear these costs out-of-pocket. This reality places additional considerations on seniors managing chronic illnesses around budgeting and health care financing strategies, particularly if they rely on supplemental benefits through Medicare Advantage plans for other services.
Ultimately, the new CMS regulation aims to preserve adherence to federal statutes while providing clarity to Medicare Advantage organizations navigating the complexities of supplemental benefits. Although supplemental benefits have expanded the types of services covered since 2018, federal law continues to impose limits, as illustrated by the exclusion of cannabis products from coverage.
Seniors interested in cannabis-based treatments will need to plan accordingly, potentially turning to personal resources or income strategies to manage these expenses. The CMS rule underscores the continuing intersection between federal health policy, evolving treatment demands, and legal frameworks.