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Medical foods are intended for patients with therapeutic or chronic medical needs who have a limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary food. While some states are considering or have enacted laws mandating insurance coverage for medical foods, there are currently no federal laws in the US to do so. Insurance companies have denied coverage for medical foods due to medical necessity not being established or medical foods not being included in the plan coverage. However, some insurance providers sponsor programs that address chronic conditions by providing and funding nutritional, specially tailored meals.
| Characteristics | Values |
|---|---|
| Definition of Medical Foods | Foods that are specially formulated and intended for the dietary management of a disease that has distinctive nutritional requirements that cannot be met by a normal diet alone |
| Medical Foods Market | Expected to be worth $24.4 billion by 2025 |
| Insurance Coverage | Varies by state and insurance provider |
| Medical Food Coverage Requirements | Must be demonstrated to provide 50% of total energy needs, and a physician must issue a written order that it is medically necessary |
| Examples of States with Medical Food Coverage | Maine, Massachusetts, Nevada, and North Dakota |
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What You'll Learn
Medical foods are a grey area for insurers
The global medical foods market is expected to be worth $24.4 billion by 2025, with the US representing 50% of the global market. Despite its significant size, less is understood about medical foods than about nutraceuticals, which include dietary supplements, functional foods, vitamins, and minerals. This lack of understanding contributes to the grey area for insurers.
In the US, there are no federal laws mandating coverage for medically necessary foods. Some insurance policies may cover a medical food if it provides at least 50% of a person's total energy needs, but even when covered, they are often categorized as "second-" or "third-tier" drugs with high out-of-pocket costs. Additionally, only 38 state Medicaid programs provide any medical food coverage, and many of these stop coverage at age 18.
The decision on how to cover medical foods is left to each state, leading to a wide variation in regulations. Some states, like Maine, Massachusetts, Nevada, and North Dakota, have enacted laws mandating insurance coverage for medical foods, especially for individuals with heritable diseases like phenylketonuria (PKU) or inborn errors of metabolism. These laws often require health insurance plans to cover medical foods to the same extent as prescription drugs. However, critics of health insurance benefits legislation argue that mandates lead to increased premium costs and, ultimately, a higher number of uninsured individuals.
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Some insurers sponsor programs to address chronic conditions
Medical foods are intended for the dietary management of patients who have limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs. They are often used to address therapeutic or chronic medical needs. While some states include medical foods in their insurance coverage, others do not. This has created a grey area, with insurance companies denying coverage for medical foods for reasons such as medical necessity not being established or medical foods not being included in the plan.
In California, LA Care Health Plan is participating in Project Angel Food, a pilot program with a state directive of serving 60 Medi-Cal patients in its first year. The program's goals include changing healthcare policy so that meals become a reimbursable expense for insurers and providing all patients discharged from the hospital with daily meals, with the aim of reducing readmission rates by 50%.
Private health insurers (PHI) are also increasingly engaging in chronic disease prevention, particularly in the Australian health system, where they account for about 9% of total health expenditure. For example, Oxford Health Plan initiated a nutrition screening program to offer interventions such as visits from a dietitian and follow-ups, which reduced nutrition risk and the number of insurance claims and emergency department visits.
Insurers and employers are also starting to help more with chronic diseases. For instance, Humana is working with Virta Health to offer a program that uses nutritional therapy and remote medical care to try to reverse Type 2 diabetes. Florida Blue started a diabetes program in 2014 for customers enrolled in individual insurance coverage, and Oscar began selling its diabetes-specific plan on individual markets in several states in 2022. Oscar's plan assigns care managers to help patients navigate the healthcare system and waives out-of-pocket costs for specific services.
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Some states mandate insurance coverage for medical foods
Medical foods are intended for patients who, due to therapeutic or chronic medical needs, have a limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs or certain nutrients. These foods provide nutritional support specifically modified for the management of the unique nutrient needs that result from a specific disease or condition, as determined by medical evaluation.
While medical foods are not covered by insurance in most states, some states have enacted laws that mandate insurance coverage for them. These laws typically require health insurance plans to cover medical foods to the same extent as prescription drugs. For example, Maine requires HMOs and individual insurance policies to provide coverage for formula and medical food products for people with inborn errors of metabolism, with coverage for low-protein food products capped at $3,000. Massachusetts has a similar requirement, with coverage capped at $2,500 annually. Other states with statutes mandating coverage include North Dakota, Oregon, Utah, Vermont, and Washington.
The regulations for insurance coverage of medical foods vary widely across the United States. Each state can decide how to cover medical foods, including placing limits on the types of food that fall into this category, the conditions they address, the route of administration, and eligibility. These regulations most often apply to employer-sponsored insurance coverage and less to self-funded Employee Retirement Income Security Act (ERISA) plans, which are generally exempt from state-mandated benefits.
While critics of health insurance benefits legislation argue that mandates increase the cost of premiums and ultimately lead to more uninsured individuals, proponents of such legislation believe it is necessary to ensure adequate benefits for consumers. Several national bills have been proposed to provide coverage for medically necessary food and vitamins for digestive and inherited metabolic disorders under federal health programs and private health insurance, but none have been successful so far.
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Medical foods are intended for dietary management of patients
Medical foods are a specific category of food that is intended for dietary management. They are formulated to be consumed or administered enterally under the supervision of a physician. Medical foods are designed for patients with a limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary food or certain nutrients due to therapeutic or chronic medical needs. These foods are not simply recommended as part of an overall diet but are a major component of the specific management of a disease or condition. They are specially formulated and processed, distinct from naturally occurring foodstuffs used in their natural state.
In the United States, the Food and Drug Administration (FDA) regulates medical foods and has released guidelines to distinguish them from foods for special dietary use. Medical foods are intended to meet the distinctive nutritional requirements of a disease or condition and must be used under medical supervision. The FDA guideline states that medical foods are "formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation."
In Europe, medical foods are termed foods for special medical purposes (FSMPs) and are regulated as foods. FSMPs are defined as "food specially processed or formulated and intended for the dietary management of patients, including infants, to be used under medical supervision." FSMPs are considered critical for the health of an increasing number of patients, and their appropriate use is essential to avoid serious consequences for patient health.
While the global medical foods market is expected to be worth $24.4 billion by 2025, insurance coverage for these products varies. In the United States, each state can decide how to cover medical foods, with regulations applying primarily to employer-sponsored insurance coverage. Some insurers do not include medical foods as a benefit, and coverage may be denied if medical necessity is not established or if it is not included in the plan. However, some programs, such as the Metropolitan Area Neighborhood Nutrition Alliance (MANNA), partner with insurance providers to offer medically tailored meals to patients with specific clinical conditions. These initiatives aim to advocate for making these meals a covered benefit.
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Medical foods are distinct from nutraceuticals
Medical foods, on the other hand, are intended for the dietary management of patients with therapeutic or chronic medical needs who have a limited capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs. They are specifically modified to meet the unique nutritional needs resulting from a specific disease or condition and should only be used under medical supervision.
The distinction between the two is a grey area, which creates problems for insurance coverage. Most insurers do not include medical foods as a benefit, and coverage is often denied due to medical necessity not being established or medical foods not being included in the plan. However, some insurers sponsor programs that address chronic conditions by providing and funding nutritional, specially tailored meals.
The global medical foods market is expected to be worth $24.4 billion by 2025, and there have been national bills proposed to provide coverage for medically necessary food under federal health programs and private health insurance. Despite this, the understanding of medical foods lags behind that of nutraceuticals.
In conclusion, while both medical foods and nutraceuticals play a role in healthcare, they are distinct in their purposes, regulation, and insurance coverage. Nutraceuticals are more established and widely available, while medical foods are more specialized and face more challenges in terms of coverage and understanding.
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Frequently asked questions
Medical foods are intended for the dietary management of a patient who, because of therapeutic or chronic medical needs, has a limited or impaired capacity to ingest, digest, absorb, or metabolize ordinary foodstuffs or certain nutrients. Medical foods provide nutritional support specifically modified for the management of the unique nutrient needs that result from a specific disease or condition.
It depends on your insurance provider and the state you live in. Some insurance companies do not include medical foods as a benefit. However, some states have enacted laws mandating insurance coverage for medical foods, and these laws vary from state to state.
Medical foods include standard meal replacement beverages (e.g., Ensure, Boost) and products for the management of diabetes (e.g., Glucerna, Boost Glycemic Control).
A physician must issue a written order stating that the medical food is necessary for your treatment. Even when covered, essential medical foods are sometimes categorized as “second-” or “third-tier” drugs and have high out-of-pocket costs.
