Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Hickey/Steinborn
LAST UPDATED
ORIGINAL DATE 2/23/2025
SHORT TITLE No Behavioral Health Cost Sharing
BILL
NUMBER Senate Bill 120
ANALYST Hernandez
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
RHCA $690.0
$1,660.0 to
$4,740.0
$2,790.0 to
$9,120.0
$5,140.0 to
$14,550.0
Recurring General Fund
HCA
See Fiscal
Implications
NMPSIA $6,424.0
$9,400.0 to
$15,250.0
$13,300.0 to
$26,700.0
$29,124.0 to
$48,374.0
Recurring General Fund
Total $7,114.0
$11,060.0 to
$20,260.0
$16,090.0 to
$35,820.0
$34,264.0 to
$63,194.0
Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From
Department of Health (DOH)
Health Care Authority (HCA)
Office of Superintendent of Insurance (OSI)
University of New Mexico (UNM)
Public School Insurance Authority (NMPSIA)
Retiree Health Care Authority (RHCA)
SUMMARY
Synopsis of Senate Bill 120
Senate Bill 120 (SB120) amends parts of the Health Care Purchasing Act and New Mexico
Insurance Code to permanently eliminate behavioral health services cost sharing by striking the
2027 sunset date. Cost sharing is defined in existing statute as a copayment, coinsurance,
deductible or any form of financial obligation on an enrollee in a group health plan, outside of
the premium.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS Senate Bill 120 – Page 2
While the Health Care Authority (HCA) states the agency built the cost of fully covering
behavioral health services into the baseline rates of the group health benefit for the state and
local government employees covered by the State Health Benefit (SHB) plan, meaning
permanently eliminating cost sharing would not increase their costs. In addition, the department
states, “Even if the law were to sunset, SHB would likely maintain the policy because of its
positive impacts on patients, providers, and the health system as a whole.” As a result, the
department indicates—and the fiscal impact table on page 1 shows—SB120 would have no
additional financial impact for the Health Care Authority.
However, both the Public School Insurance Authority (NMPSIA), which provides a health care
coverage plan for most school districts, and the Retiree Health Care Authority (RHCA), which
covers state retirees, list additional operating costs associated with the permanent elimination of
behavioral health cost sharing.
RHCA states, if SB120 includes coverage for out-of-network providers, costs would go up.
Ultimately, within the next three fiscal years, RHCA estimates it would face costs between $5.1
million and $14 million:
The agency review includes projected industry cost trends for behavioral health services
and medications as well as available resources for behavioral health prevalence, treatment
rates, and provider access. In addition, without networks being clearly defined in
[SB120], the group experience and industry references regarding the relative cost for out-
of-network compared to in-network cost differentials were utilized to estimate the impact
of including out-of-network providers at 100 percent plan coverage levels.
NMPSIA raised similar concerns and states its “estimated impact reflects the additional plan
spend due to SB120 and preceding legislation compared to expected plan spend absent any of
this legislation.” The authority estimates increased costs for the next three fiscal years to be
between $29.1 million and $48.3 million.
SIGNIFICANT ISSUES
A study published in JAMA, a respected, peer-reviewed publication of the American Medical
Association, examined New Mexico’s no-cost behavioral health program instituted in 2021 and
found was there was a $6.37 reduction in average out-of-pocket spending for patients who used
mental health or substance use disorder (SUD) medications. The second major finding was that
there was not an increase in the volume of prescriptions dispensed—meaning that more New
Mexicans did not seek mental health or SUD medications as a result of the no-cost behavioral
health program.
The Office of Superintendent of Insurance notes it required carriers to provide details on the
impact on rates when behavioral health cost sharing was eliminated and only one carrier
indicated a minimal rate impact for 2025. All other carriers indicated that behavioral health cost
sharing elimination had no impact on rates: “Members who received behavioral health services
avoided spending $7,156,200 in FY23 and $8,163,602 in FY24.”
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