CMS Proposes Medicare Coverage for Hemp-Derived CBD Products
The Centers for Medicare & Medicaid Services (CMS) has proposed a new rule that allows Medicare Advantage providers to cover hemp-derived cannabidiol (CBD) products that comply with federal and state laws. This proposal represents a significant policy shift that could extend coverage options for millions of seniors seeking alternative, non-opioid treatments. Previously, CMS rules disallowed coverage of cannabis products, but the revised regulation would narrow prohibitions to cannabis products that remain illegal under applicable law, thus permitting federally legal hemp-derived CBD coverage. This regulatory update follows advocacy efforts highlighted by U.S. Health and Human Services Secretary Robert F. Kennedy Jr.'s engagement with CBD coverage proponents. Projections estimate the shift could unlock around $64 billion in annual healthcare savings by offering safer alternatives to opioids and other pharmaceuticals with greater risk profiles. The new CMS position reflects an evolving federal stance on cannabis-derived therapies, seeking to modernize rules that previously limited research, access, and innovation in cannabinoid products. The proposal specifically excludes coverage of cannabis products that violate the Federal Food, Drug, and Cosmetic Act or other laws, maintaining restrictions against marijuana-based products. CMS clarifies that hemp and hemp-derived products meeting the 2018 definition (and an amended definition effective November 12, 2026) are not federally controlled substances. The agency also explicitly authorizes coverage for certain hemp-derived items such as hulled hemp seed, hemp seed protein powder, and hemp seed oil, reaffirming their safe status based on FDA reviews. However, impending federal hemp law changes starting in 2026 will significantly lower allowable THC concentrations in hemp products, potentially constraining the range of accessible CBD products under Medicare coverage. Industry experts warn this constraint may increase production costs or limit the viability of many hemp-derived products. Nonetheless, CMS's comprehensive regulatory revision marks a pivotal development for Medicare policy, cannabinoid coverage, and related healthcare market dynamics. Overall, this proposal signals growing recognition of non-intoxicating cannabinoids’ therapeutic potential and aligns Medicare Advantage coverage policies with evolving federal frameworks. If finalized, the rule will provide seniors with additional safe wellness options beyond traditional pharmaceuticals, while also bringing regulatory clarity and stability to the hemp and cannabinoid product industries.