CMS Proposes Medicare Coverage for CBD Products Under New Regulatory Framework

The Centers for Medicare & Medicaid Services (CMS) has introduced a policy change allowing insurance coverage for cannabidiol (CBD) products under certain Medicare Advantage programs, provided these products comply with federal and state laws. This update revises the earlier 2026 rule which broadly prohibited Medicare coverage for cannabis products, narrowing the restriction to cannabis products illegal under applicable laws, including the Federal Food, Drug, and Cosmetic Act. The shift acknowledges the emerging evidence supporting cannabinoid therapies as part of treatment regimens for older adults, potentially improving quality of life for seniors managing pain, inflammation, and sleep disorders. Advocacy groups like Realm of Caring and the National Organization for the Reform of Marijuana Laws (NORML) have recognized the significance of this policy adjustment for public health conversations and regulatory frameworks around hemp-derived cannabinoids. However, the broader regulatory environment presents challenges, particularly with recent federal legislation redefining hemp and limiting legal THC levels to zero in hemp products. This change is expected to disrupt the CBD market by restricting compliant product production and endangering the $28 billion industry. CMS's proposed rule clarifies that hemp and hemp-derived products meeting both the current and amended legal definitions will not be classified as controlled substances and can be eligible under Medicare, subject to compliance with federal regulations including any future amendments to the Federal Food, Drug, and Cosmetic Act. The policy aims to create a foundation for safe, regulated, and research-supported cannabinoid products accessible to medically vulnerable populations. Industry stakeholders underscore the importance of establishing clear federal regulatory pathways to secure continued patient access to cannabinoid therapies. The evolving legal landscape poses imminent risks to availability, with critical deadlines approaching in late 2026 that could substantially affect the market and insurance coverage for these products. CMS's position represents a nuanced regulatory approach aligning Medicare coverage with legality and public health considerations within an increasingly complex cannabis and hemp regulatory environment.