NM reconsiders subsidies to high-risk insurance pool
SANTA FE — Gov. Susana Martinez’s administration sought Friday to shift the state’s financial obligations for a group of 2,700 people with serious and expensive medical conditions to the private health insurance market.
Legislation drafted in response to a state budget crisis would reduce tax credits and other subsidies that help underwrite New Mexico’s high-risk medical insurance pool, an insurer of last resort for the chronically ill.
At a legislative hearing, the proposal was met with strong objections from insurance carriers and physician groups that warned it could weaken the pool and drive up health premiums for people who are covered individually or through small businesses.
Several lawmakers expressed discomfort with removing subsidies for the insurance pool while Republicans in Washington prepare to overhaul the Affordable Care Act. The committee withheld its endorsement but sent for a second hearing in the House Health and Human Services Committee.
“My concern is the unknown, not so much in the state of New Mexico, but the unknown at the federal level,” said Rep. Jane Powdrell-Culbert, R-Corrales.
High-risk pool members include medically fragile children, older patients on dialysis for kidney failure, those with immunodeficiency ailments, including HIV and AIDS, and a variety of complex illnesses that require out-of-state care.
The pool also provides insurance to immigrants who are in the country illegally and cannot qualify for federally subsidized health insurance.
The proposal would also usher more people out of the pool and onto federally subsidized policies through the state health insurance exchange. The state stands to save more than $42 million a year as lawmakers struggle to fill a budget shortfall and offset rising Medicaid expenses.
Human Services Secretary Brent Earnest said those savings can help the agency avoid troublesome cost containment measures for Medicaid, such as restricting eligibility or reducing payment rates for providers.
An analysis from the Office of the Superintendent of Insurance suggested that unaffordable rate increases would fall upon a small portion of the population because of exclusions for independent, large-employer plans and subsidized insurance in a state with high rates of poverty.
“The state may make money in one way, but the citizens wind up paying for it,” said state Insurance Superintendent John Franchini, who also serves as chairman of the high-risk pool.
Albuquerque resident Jennifer Andreas, 41, enrolled in the pool in the late-1990s after being diagnosed with an immune disorder. She pays a $686 monthly premium and $500 deductible that cover intravenous antibody treatments to ward off infections. The monthly treatments are billed to her insurance carrier at $11,000 or more.
Andreas, a mother of two, is awaiting a liver transplant.
“I’m able to lead a normal life. I don’t look sick. I look like a 40-year-old with a few wrinkles,” she said. “If it’s taken away from me (my insurance), lots of things can change and can change very quickly.”
The sponsor of the proposal, House Bill 316, Rep. Paul Bandy, R-Aztec, said the pool would stay in place for people who can’t find alternatives.
Currently, all health insurers in New Mexico pay into the pool and receive tax credits for at least half of those expenses — while the state forgoes annual revenues of about $37 million. The proposal would phase out those tax credits and eliminate assessments on Medicaid premiums that underwrite the pool, providing savings to the state’s Medicaid budget and general fund. Critics say that would reduce federal matching money.
Established in 1987, New Mexico’s highrisk pool has guaranteed coverage to people once considered uninsurable.
Membership has fallen under the Affordable Care Act, which made it illegal for insurers to refuse customers because of serious health problems. Most of the 35 high-risk pools in other states have been shut down.