New Mexico Marijuana Company And Patients Sue For Insurance Coverage For Medical Cannabis

New Mexico’s largest marijuana company and a coalition of patients have filed a class-action lawsuit against seven health insurance companies in the state, demanding that they cover cannabis costs for qualifying patients.

The lawsuit comes months after Ultra Health sent letters to the insurers and state agencies, requesting medical marijuana coverage for people suffering from mental and behavioral health conditions based on an interpretation of state statute.

Because those recipients didn’t respond—and inflation is exacerbating the financial troubles of qualified patients who are forced to pay out-of-pocket for cannabis—the company said taking legal action is necessary. Now the first-of-its-kind case is before the state’s Second Judicial District Court.

“The idea of health insurance plans paying for medical cannabis may seem like an impossible dream, but all the foundational elements have already fallen into place,” Ultra Health CEO Duke Rodriguez said in a press release on Monday.

Blue Cross and Blue Shield of New Mexico, True Health New Mexico and Cigna Health and Life Insurance Company are among the defendants in the suit.

“In New Mexico, the cost of a service or a medication that is used to treat a behavioral or mental health disorder must be a covered service without cost-sharing,” the lawsuit states. “Said another way, a health insurance policy that offers coverage for behavioral or mental health services must pay 100 percent of the cost of such service.”

That position is largely premised on a state law—the Behavioral Health Services Equity Act—that went into effect this year.

The suit further asserts that the insurance companies’ decision not to cover medical marijuana costs for eligible patients under the law was done “intentionally and in a reckless and willful disregard of the rights of Plaintiffs for which they are entitled to punitive damages.”

In the letter sent out of insurers and state officials in February, the cannabis company spearheading this class-action case emphasized that while the notion of medical marijuana coverage might be novel, its “actually a rational, reasonable notion when considered in light of other New Mexico law.”

Ultra Health and the patients involved in the challenge are seeking recognition that medical cannabis is a recognized behavioral and mental health treatment in New Mexico that insurers must cover, and they also want compensation for expenses made since January 1, when the behavioral health law took effect.

In 2020, a New Mexico state judge ruled that medical marijuana patients cannot be punished for using cannabis while incarcerated.

The U.S. Supreme Court was asked late last year to settle the emerging dispute on whether employers can be forced to reimburse workers for the cost of medical cannabis used to treat job-related injuries. To date, state courts have come to differing conclusions on the issue, a situation advocates say warrants intervention from the high court.

The Justice Department last month urged the high court not to take the case, though part of its reasoning was that Congress appears to be moving toward a solution on its own, as lawmakers work to end federal prohibition.

Read the New Mexico lawsuit on medical cannabis coverage rights for patients below: 

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