Medicare Prepares to Launch $500 Hemp Reimbursement Program — Here’s What You Need to Know

(Photo: AP Photo/Eric Gay)

The Centers for Medicare & Medicaid Services is rolling out an initiative that could cover $500 per year worth of hemp-derived THC and CBD products for eligible users.

The plan, known as the Substance Access Beneficiary Engagement Incentive, will only be available to patients enrolled in select federal health insurance pilot programs. ACO Reach and Enhancing Oncology Model participants will be able to access the benefits as early as April 1, while Long-term Enhance ACO Design participants will gain access on January 1, 2027.

Unsurprisingly, there’s a whole lot of fine print to read through before participants access their Medicare-covered cannabinoids.

Most importantly, eligible products must contain no more than 0.3% THC by dry weight — the definition for federally permissible hemp products established by the 2018 Farm Bill. That definition was effectively reversed by the spending bill signed by Trump last November, which is slated to ban the majority of hemp-derived THC goods before the end of the year. Put simply: The Medicare program covers products that may or may not be illegal within a few months.

CMS says that it will change its definition of hemp in accordance with any adjustments to federal or state law. Like much else in the THC industry, we’ll just have to wait and see. Several insiders have predicted that the federal government will reverse its ban if lobbyists and legislators can agree on a comprehensive regulatory framework. If that happens, the Medicare pilot program will proceed largely unimpeded.

The plan expressly excludes inhalable products as well as any product that contains unnaturally derived cannabinoids. Beneficiaries are responsible for procuring their own goods from a qualified physician, who must purchase CBD and THC products from pre-selected participating organizations.

On Wednesday, the Kentucky-based Cornbread Hemp announced that it was one of several CBD manufacturers selected for a contract.

“Cornbread Hemp was built on a simple conviction: that clean, organic, rigorously tested hemp products can meaningfully improve people’s lives,” Cornbread Hemp co-founder and CEO Eric Zipperle said in a statement.

“The CMMI pilot is the most important moment in the history of the hemp industry, and we believe Cornbread is uniquely positioned to serve it. We have the certifications, the infrastructure, the brand reputation and the category expertise to deliver for Medicare beneficiaries who deserve access to the best hemp products America produces.”