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Can You Use an FSA or HSA to Pay for Medical Marijuana Cards and Cannabis?

  • Unfortunately, medical cannabis and the associated costs of medical marijuana treatment aren’t eligible for FSA or HSA reimbursement—yet.
  • While medical marijuana remains federally illegal, the tide is changing. Plus, patients can still save on overall healthcare costs with medical cannabis.

How much does it cost to get your medical card? Is there any way to reduce the cost of marijuana care—perhaps by using your FSA or HSA?

While medical marijuana and its associated costs (like medical card applications and cannabis doctor visits) aren’t qualifying uses for your flexible spending account (FSA) or health savings account (HSA), patients can still find ways to save on medical cannabis treatment and reduce their overall healthcare costs.

In this guide, we’re breaking down everything you need to know about budgeting for medical marijuana treatment.

FSAs, HSAs, and Medical Marijuana

Before we explore why medical cannabis isn’t a qualifying FSA or HSA expense, let’s define some terms:

  • A flexible spending account (FSA) is a pre-tax savings account that can be used to pay for qualifying healthcare expenses. Since it’s pre-tax, anything contributed to an FSA doesn’t count toward your income on your federal income tax return.
  • A health savings account (HSA) is also a pre-tax savings account you can use to pay for healthcare costs. While FSAs and HSAs are very similar, they have slight differences. HSA funds, for example, can be carried forward year after year, while FSA funds must be used in the same year that they’re contributed.
  • Medical cannabis is legal, dispensary-grade marijuana that must be recommended by a healthcare provider. In states with medical marijuana programs, anyone over the age of 21 with a provider’s recommendation and an approved application may purchase cannabis at a regulated dispensary or pharmacy.

Unfortunately, FSAs and HSAs are under federal purview since they allow you to decrease your federally taxable income.

Since marijuana is still a Schedule I drug in the eyes of the federal government, you can’t use funds from FSAs and HSAs to purchase medical cannabis, pay for associated doctor’s appointments, or pay application fees for your state’s medical marijuana program.

The Tides Are Changing

While medical marijuana costs aren’t yet covered by insurance and you can’t use FSA or HSA funds to pay for them, this may not be the case forever.

As more and more states legalize cannabis—for either recreational or medical use—the federal government may come to recognize cannabis as a legitimate healthcare tool with a staggering success rate.

Take the 2018 Farm Bill, for instance. While all marijuana products were once federally illegal, 2018 lawmakers saw fit to legalize hemp, a low-THC, CBD-forward subtype of the cannabis plant.

The Farm Bill widely expanded access to healing CBD products nationwide and proved that positive change is possible.

At the moment, patients can’t use their insurance or pre-tax health savings on medical cannabis costs, but keep an eye on state and federal legislation in the future.

Saving for Medical Cannabis Expenses

In the absence of pre-tax savings opportunities for medical cannabis patients, what can you do to systematically save for medical marijuana costs?

Here are some savings tips that could help you create a quasi-HSA/FSA:

  • Set up a new account: Set up a debit account exclusively for medical cannabis spending—doctor’s appointment costs, dispensary bills, and application costs. Each pay period automatically transfers a portion of your paycheck to this account to fund future transactions. While these funds won’t be pre-taxed, this method can still help you save.
  • Round-up on cash spending: If you prefer cash over plastic, you can implement a round-up practice to set aside extra cash for medical cannabis costs.

For each transaction you make with cash, round up to the nearest dollar (or five, or ten, or twenty). Set this cash aside as a medical cannabis treatment fund.

Again, neither of these options is pre-tax, but they can help patients set aside funds for the types of all-natural healing that aren’t yet recognized by the Western healthcare system.

Taking Advantage of Dispensary Savings

In addition to saving for medical cannabis yourself, you can also unlock savings at the dispensary when you stock up.

Like other retailers, dispensaries and pharmacies often offer:

  • Loyalty programs (i.e., points or other rewards)
  • Seasonal sales and clearance events
  • Bulk savings

Bulk savings are a particularly dependable way to save on medical cannabis. Even if a dispensary isn’t running a sale, they’ll likely still offer decreased prices on higher quantities of product.

Once you find a product you like that’s producing consistent results, consider purchasing an eighth or a half ounce of flower or a multi-pack of vape cartridges to decrease your unit price.

Here’s another helpful tip: Talk to your budtender about your cannabis budget. If you’re looking to save, your budtender can help you choose products in your price range that still meet your needs and your quality expectations.

Reducing Your Healthcare Costs

When you transition to medical cannabis, you may find yourself spending more out of pocket than you did on Western medical care. But this transition could help you save on conventional treatments, too.

Replacing Costly Drugs with Medical Cannabis

Many medical cannabis patients aspire to replace some pharmaceuticals with medical marijuana. And, while this isn’t the right solution for every drug (or every illness), many patients have found success when using cannabis instead of drugs like:

  • Antidepressants
  • Benzodiazepines and other anti-anxiety medications
  • Anti-nausea drugs
  • Opioids
  • Muscle relaxers

Even if they’re covered by your health insurance policy, these drugs can still be costly, especially if you take more than one of the drugs on this list. In other words, medical cannabis could be used to replace multiple prescriptions in your medicine cabinet, which could help you save in the long run.

It’s important to talk to your healthcare provider before discontinuing any prescription medication. Your doctor can help you make a game plan for weaning off any pharmaceuticals as safely as possible.

Decreasing Overall Visits

Let’s examine a hypothetical scenario:

  • Jim is struggling with mental health challenges. In addition to visiting a primary care physician for yearly checkups, he also visits a psychiatrist to manage prescription medications: an SSRI for depression and a benzodiazepine for anxiety attacks.
  • After making a plan with a cannabis-informed doctor and his psychiatrist, Jim decides to transition away from prescription mental health pharmaceuticals and use medical marijuana to manage and recover from his mental health struggles.
  • After successfully weaning off of prescription drugs, Jim stops seeing his psychiatrist and sees his marijuana doctor periodically.

In the hypothetical above, Jim doesn’t just cut down on prescription costs—he also decreases his overall healthcare provider visits.

Since many prescription drugs require frequent refill appointments, patients can potentially decrease their overall appointments and their copays by transitioning to medical cannabis.

Supporting Overall Health and Wellness

Medical cannabis doesn’t just offer a treatment for mental health concerns.

Patients are currently using marijuana to:

  • Improve their sleep
  • Decrease chronic pain
  • Treat acute pain
  • Improve their overall mood
  • Maintain a healthy appetite
  • Increase overall quality of life

All of the applications above support overall wellness—and, generally speaking, it’s cheaper to be healthy. With quality sleep, you won’t find yourself visiting a sleep specialist; with a consistent source of pain relief, you won’t have to refill your opioid prescriptions; and the list goes on.

While medical cannabis may not be a sanctioned healthcare expense in the eyes of insurance companies or the federal government, patients could still decrease their overall healthcare spending by switching to a plant-based alternative.

TeleLeaf: Unlocking Plant-Based Relief for Patients

You can’t use an FSA or HSA to pay for medical cannabis or your medical marijuana card—but that doesn’t mean you have to spend an arm and a leg finding the all-natural, plant-based healing you’re looking for.

Enter TeleLeaf, the best online medical marijuana card service for today’s patients. Not only is our service affordable, but it’s also supported by cannabis-informed providers who want to help you create a personalized healing plan on your terms.

Ready to explore your cannabis treatment options? Make an appointment with our providers now.


Sources: 

University of Pennsylvania. Eligible Expenses for a Health Care Flexible Spending Account.
https://www.hr.upenn.edu/PennHR/benefits-pay/health-life-and-fsa/health/flexible-spending-accounts/health-care-flexible-spending-account/eligible-expenses-for-health-care-flexible-spending-account

The Motley Fool. HSA-Eligible Expenses in 2023 and 2024.
https://www.fool.com/retirement/plans/hsa/eligible-expenses/

Healthcare.gov. Using a Flexible Spending Account (FSA).
https://www.healthcare.gov/have-job-based-coverage/flexible-spending-accounts/

Healthcare.gov. Health Savings Account (HSA).
https://www.healthcare.gov/glossary/health-savings-account-hsa/

US Food and Drug Administration. Hemp Production and the 2018 Farm Bill.
https://www.fda.gov/news-events/congressional-testimony/hemp-production-and-2018-farm-bill-07252019

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