A bill under consideration in the New Mexico legislature would require health insurance policies to cover the cost of medical marijuana, aligning cannabis reimbursement with other prescription medications.

House Bill 527 proposes that insurers reimburse either policyholders or authorized dispensaries for medical marijuana purchases, provided they are made through an approved retailer.

The legislation defines an “adequate supply” of medical cannabis as an amount sufficient to ensure uninterrupted availability for three months. The bill has passed the House Health and Human Services Committee and now moves to the House Judiciary Committee for further review.

Duke Rodriguez (pictured above), president and CEO of New Mexico marijuana dispensary operator Ultra Health, said the bill has a strong chance of passing the House but may face time constraints in the legislative process.

New Mexico’s alternating annual legislative sessions run for either 30 or 60 days, and the current 60-day session ends on March 22.

In a report from AM Best, Rodriguez said the primary challenge will be advancing the bill through the Senate in time for it to reach the governor’s desk. He noted that this is the first time legislation addressing health insurance coverage for medical marijuana has been introduced in New Mexico, and its movement through committee represents an initial step.

Outside of New Mexico, the legal status of medical marijuana in the United States presents significant challenges for insurance coverage.

Despite its legalization for medical use in numerous states, cannabis remains classified as a Schedule I controlled substance under federal law, indicating no accepted medical use and a high potential for abuse. This federal classification hinders the ability of both public and private insurance companies to provide coverage for medical marijuana, even in states where its use is legal.

That said, there are some states that seem to buck the trend. In a pioneering move, New York lawmakers approved a bill obligating both private insurers and public health insurance programs within the state to cover medical cannabis as they would any other prescription medication.

While New Mexico’s HB 527 is the first bill to propose direct health insurance coverage for medical marijuana, the state has previously addressed the issue through legal rulings.

The New Mexico Supreme Court has ruled that workers’ compensation insurers must cover medical cannabis orders from physicians, which the state refers to as a recommendation rather than a prescription.

The National Council on Compensation Insurance reports that as more states legalize marijuana, most new legislation includes provisions to exclude coverage under workers’ compensation.

However, New Mexico courts have determined that medical marijuana, like other medical services, must be exempt from gross receipts taxes, which function as a sales tax.

Rodriguez said the legal framework for reimbursement already exists and that the current bill seeks to codify it into law.

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