The federal health plan should qualify for rewards. It is Medicaid and Medicare that do not qualify. They are telling you wrong.
Actually, it is correct. The applicable law, 42 U.S.C. § 1320a-7b (which most pharmacies have posted somewhere) does not differentiate between federal assistance programs and federal employee programs. Pharmacies are legally prohibited from offering incentives to fill prescriptions that are paid for (all or in part) with federal funds. Walgreens was fined millions of dollars over this recently. In the past a lot of federal employees were able to use the coupons because there was nothing in the system that identified them as such. Since the Walgreens case, the system now identifies federal group numbers and labels those customers as coupon ineligible.
It's definitely NOT fair. I work in a pharmacy and it's not at all fun to tell someone that they can't use a great coupon with Tricare (military insurance). It's not the pharmacy staff's issue, or even the chain's. To them, the more customers that enroll, the better...that's why they have these programs. It is a federal government issue- they have made it clear how they are going to interpret the law and that they WILL prosecute violators.