New Mexico’s Behavioral Health Access: The Impact of Eliminating Out-of-Pocket Costs on Insurance Plans

In 2019, New Mexico enacted a unique law that eliminated out-of-pocket costs for behavioral health services in certain insurance plans. A recent study conducted by Ezra Golberstein, an associate professor at the University of Minnesota, examined the impact of this law. Golberstein was initially taken aback by the No Behavioral Health Cost Sharing Act, as no other state had attempted such a bold approach to reducing costs and increasing access to care.

The study revealed that within the first six months of the law taking effect, out-of-pocket costs decreased. However, there was no significant increase in individuals seeking mental health treatment. Golberstein explained that since most prescriptions are for generic drugs, which are already affordable, reducing the cost to zero for these medications did not have a significant impact on medication dispensing patterns. Despite this, there was a slight rise in new prescriptions for more expensive medications.

However, there are limitations to the law as it only applies to insurance plans obtained through employers. Many of New Mexico’s largest employers are not required to comply due to a carveout for “self-funded” insurance, which is commonly chosen by large companies. However, individuals with insurance through the Affordable Care Act Marketplace or state employees are affected by the law. Golberstein emphasized that New Mexico continues to serve as a testing ground for this type of legislation and his team plans to conduct further research on its impact.

The study was made possible by funding from the W.K. Kellogg Foundation and KUNM listeners.