Federal Court Rules Health Insurers in New Mexico Do Not Have to Cover Medical Marijuana Costs

A recent federal court ruling found that health insurers in New Mexico are not required to cover medical marijuana costs, despite arguments based on state laws. The lawsuit, brought by a dispensary and several insured individuals, cited New Mexico’s Behavioral Health Services Act and insurance regulations as grounds for mandating coverage. However, the court sided with Blue Cross and Blue Shield of New Mexico, Presbyterian Health Plan, and Western Sky Community Care, emphasizing that the state’s Benchmark Plan excludes non-FDA-approved treatments such as cannabis.

The court also cited the federal Medicaid Act, which limits reimbursements to FDA-approved drugs, reinforcing the decision that insurers cannot legally reimburse for medical marijuana. Plaintiffs pointed to state laws that prohibit cost-sharing for behavioral health services, but the court ruled that since cannabis is not a covered benefit, these provisions were irrelevant.

Although plaintiffs argued that federal marijuana laws might soon change, the court noted that current federal restrictions remain in place. In a related development, New Mexico lawmakers introduced a bill in March 2025 that would mandate insurance coverage for medical cannabis, signaling potential future changes depending on legislative outcomes.