A federal judge has ruled that health insurance providers in New Mexico aren’t legally required to pay for medical cannabis, even though some state laws suggest they should. This decision underscores the ongoing clash between state-level cannabis initiatives and overarching federal drug policies.
The lawsuit originated from a group of plaintiffs that included individuals enrolled in Medicaid or private insurance plans, along with a licensed cannabis dispensary. They claimed that marijuana used to treat mental and behavioral health conditions should be reimbursed under several New Mexico statutes, including the Behavioral Health Services Act and regulations on insurance practices. Their argument hinged on the idea that these laws collectively obligated insurers to cover medical cannabis.
But the court rejected those arguments, siding with major insurers—Western Sky Community Care Inc., Blue Cross & Blue Shield of New Mexico, and Presbyterian Health Plan Inc. The judge pointed to the state’s Benchmark Plan, which acts as a standard for insurance coverage. That plan doesn’t mention marijuana as a covered treatment and specifically excludes substances that lack FDA approval. Since marijuana has not been approved by the FDA, the court concluded that insurers have no legal duty to pay for it.
Federal law played a significant role in the ruling. The Medicaid Act allows coverage only for medications that have the FDA’s endorsement. Since marijuana is still considered a controlled substance at the federal level and hasn’t received formal medical approval, insurers would be violating federal law if they reimbursed patients for its use.
The plaintiffs referenced a state law that prohibits cost-sharing for certain behavioral health treatments, suggesting that patients shouldn’t bear the expense of medical marijuana. However, the court clarified that this law only applies to services that insurers are already required to cover—which, in this case, does not include cannabis.
There was mention during the case that federal cannabis laws could change in the future, potentially opening the door for insurance coverage. However, the judge noted that until such changes happen, federal restrictions remain in place. Offering coverage now could put insurers at legal risk.
Looking ahead, this might not be the final word. New Mexico legislators introduced a measure aimed at requiring insurance companies to cover medical cannabis in March. If that proposal becomes law, it could significantly shift how cannabis is handled within New Mexico’s health insurance system.
The broader industry, including firms like Canopy Growth Corp. (NASDAQ: CGC) (TSX: WEED) operating outside the U.S. hope that needed reforms can be made so that medical cannabis products can be covered by American insurance companies in order to ensure patients aren’t forced to incur high out-of-pocket costs while choosing these products to manage their symptoms.
About CNW420
CNW420 spotlights the latest developments in the rapidly evolving cannabis industry through the release of an article each business day at 4:20 p.m. Eastern – a tribute to the time synonymous with cannabis culture. The concise, informative content serves as a gateway for investors interested in the legalized cannabis sector and provides updates on how regulatory developments may impact financial markets. If marijuana and the burgeoning industry surrounding it are on your radar, CNW420 is for you! Check back daily to stay up-to-date on the latest milestones in the fast -changing world of cannabis.
To receive SMS alerts from CNW, text CANNABIS to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.CannabisNewsWire.com
Please see full terms of use and disclaimers on the CannabisNewsWire website applicable to all content provided by CNW, wherever published or re-published: https://www.CannabisNewsWire.com/Disclaimer
CannabisNewsWire
Denver, CO
www.CannabisNewsWire.com
303.498.7722 Office
Editor@CannabisNewsWire.com
CannabisNewsWire is powered by IBN