Does Medical Marijuana Affect Your Insurance?

Conflicting state and federal rules create confusion

Older man at home smoking
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For many years, cannabis was an illegal drug under federal and state laws. But as of today, 36 states and four territories allow for medical marijuana use. The industry and regulations continue to change rapidly, which creates confusion around how medical marijuana might affect insurance policies and other aspects of your life.

Below, we review how insurers currently view medical marijuana—if it’s covered and its impact on eligibility and rates. We’ll focus on essential consumer insurance products, including health, life, and auto insurance.

Key Takeaways

  • At the federal level, marijuana is still considered a Schedule 1 drug. 
  • 36 states and four territories allow for medical marijuana use.
  • Marijuana use does not affect rates for health insurance but it is not generally covered.
  • Life insurance rates will likely be higher for medical marijuana users.
  • Medical marijuana could affect your auto insurance rates if you’re involved in a stop or collision and are found to be impaired.

Medical Marijuana Uses

Medical marijuana is any treatment that is derived from the cannabis sativa plant which contains meaningful amounts of tetrahydrocannabinol (THC). THC may be popularly known for its psychoactive properties, but it’s also an important treatment for some health conditions.

The FDA has approved several drugs that are based on THC, although the cannabis plant itself is not currently approved for any treatment. For example, dronabinol (lab-made THC) is an FDA-approved compound that may reduce nausea and vomiting resulting from chemotherapy. Other synthetic chemicals based on THC can help with appetite and weight loss among those with HIV/AIDS.

Medical marijuana might be helpful for other conditions, but the FDA has not approved additional uses as of this writing. The National Center for Complementary and Integrative Health (NCCIH) maintains that more research is necessary before officially sanctioning additional treatments and points out that patients using it need to be cautious (due to an increased risk of motor vehicle accidents, for example). Still, the NCCIH notes that marijuana may offer benefits for those with multiple sclerosis, chronic pain, and other conditions.

Laws About Medical Marijuana

Medical marijuana is illegal under federal law. However, some states permit marijuana use for medical and, in some cases, recreational purposes as well. As a result, there’s understandable confusion among consumers.

Plus, though state laws have been changing, many states face internal conflict regarding medical marijuana. Because of that, it’s hard to know what to expect. For example, Mississippi voters approved a medical marijuana initiative in 2020, but the state supreme court overturned that effort.

The U.S. Drug Enforcement Administration (DEA) views cannabis as a Schedule 1 drug “with no currently accepted medical use and a high potential for abuse.”

Because marijuana is illegal at the federal level, financial institutions that are federally regulated may be less accepting than states when it comes to cannabis. 

Does Health Insurance Cover Medical Marijuana?

Health insurance generally does not cover medical marijuana because marijuana is illegal at the federal level. However, if that changes and the FDA approves marijuana for health treatments, things may look different.

According to Duncan France, an insurance agent in Broomall, Pennsylvania, insurers may be more open to covering the costs of buying medical marijuana in the future. Insurers that endorse—and pay for—illegal treatments would be taking a risk that isn’t worth it. “Typically if it’s gray, they stay away,” says France, referring to insurers’ reluctance to take chances in areas where the legislation is unclear.

Does Medical Marijuana Use Affect Your Health Insurance?

Health insurance rates are highly regulated, and insurers can only use five factors to determine your rate: location, age, tobacco use, plan category, and individual vs. family enrollment. Having a medical marijuana card is not one of those factors. Moreover, any conditions you treat with cannabis should not be part of the equation.

Health care policies cannot discriminate against you for any health issues or preexisting conditions.

Does Using Medical Marijuana Affect Life Insurance Rates?

You can buy life insurance while using marijuana, but you may have to pay higher premiums. Medical marijuana can affect your life insurance rates in several ways. 

Health Conditions

Life insurance companies are probably more interested in the condition you’re using medical marijuana to treat than the marijuana use itself. For example, if you have a serious terminal condition, such as cancer, it may be difficult or even impossible to find coverage. Insurers will look into your medical history when you apply for a life insurance policy to understand the severity of any conditions (whether or not you use marijuana). Generally speaking, the more or the more severe health issues you have, the more expensive life insurance coverage will be.

Smoker Classification

If you smoke marijuana, insurers are more likely to approve you for a policy with smokers’ rates—in the same category as tobacco users. Those rates are much higher than nonsmoker rates, but not all insurance companies classify medical marijuana applicants as smokers. That’s especially true if you ingest marijuana instead of smoking it.

Frequency

Insurers might also determine your rate based on how frequently you consume marijuana. With infrequent use, you could qualify for standard rates (or better). However, smoking marijuana regularly will likely bump you into a smoker classification with high rates.

Discuss your health issues with an insurance agent. With an understanding of your conditions and treatment plans, your agent may be able to recommend an insurance company that offers competitive rates. Some insurers will be more accommodating than others.

Does Marijuana Use Affect Your Car Insurance?

Medical marijuana can potentially affect your auto insurance if you are convicted of driving while impaired. For example, if a medical marijuana user who would not be considered impaired during a traffic stop is involved in an accident, they may or may not be charged with impaired driving if THC is found in their blood. This would depend on the state and the individuals involved in filing the charges. 

THC may remain in your system for several weeks after consumption, so evaluating the exact timing of impairment with marijuana can be difficult. As a result, this is a challenging area for both law enforcement agencies and marijuana users.

A DUI or similar conviction (DWI, for example) will affect your auto insurance. You will pay higher premiums, and insurance companies may cancel your coverage and refuse to cover you for several years after a conviction. 

The Bottom Line

When it comes to insurance, medical marijuana is still uncharted territory. There are relatively few FDA-approved treatments, and marijuana is illegal at the federal level. While insurance companies are reluctant to pay for treatment with medical marijuana, using it shouldn’t affect your eligibility for coverage—although you might pay higher premiums for life insurance. To get the best deal, discuss your health conditions and treatment plan with an insurance agent who can help you find the best insurance company, given your circumstances.