Health exchange to dun insurers

Assessment for operating costs will likely be passed on to consumers

The New Mexico Health Insurance Exchange has decided to charge insurance companies an assessment to cover the exchange’s operating costs.

Insurers Blue Cross Blue Shield of New Mexico and Presbyterian Health Plan said Friday they likely will end up increasing consumer premiums to cover the cost.

The health exchange board recently approved a plan to cover its $1.5 million budget for 2015 by levying the assessment on all insurance carriers that sell major medical and Medicaid managed policies in New Mexico.

“This is the result of a year of effort and extensive public comment from stakeholders,” said health exchange Executive Director Amy Dowd.

She said the plan was modeled on funding mechanisms for safety net programs, such as the New Mexico Health Insurance Alliance and the New Mexico Medical Insurance Pool that were established to provide insurance for people who could not otherwise get it. Dowd said the amount of the assessment will be based on each carrier’s share of the insurance market so that those with the largest shares will pay most. She said she did not immediately have the dollar amounts.

Federal grants funded startup costs for BeWellNM, the exchange for individual health insurance, and Small Business Health Options, the exchange for small businesses. The small business portion must be self-financing this year, and the individual exchange by Jan. 1, 2016.

The health exchange will send out assessment invoices to insurers to cover SHOP operations during the first quarter of this year. The exchange will finalize its 2016 budget in November and invoices for 2016 will go out early next year.

Janice Torrez, Blue Cross vice president of external affairs and chief of staff, said the company is aware of the plan and understands the health exchange’s need to fund operations.

“Like carriers have done in the past with other assessments like the New Mexico Medical Insurance Pool or the New Mexico Health Insurance Alliance, those assessments have been built into the rates and they are passed on,” Torrez said.

Presbyterian Health Plan President Lisa Lujan said that entity’s premiums are based on the medical and administrative cost of plans, “so that includes assessments and other taxes when we are looking at what our overall premium needs to be.”

New Mexico Health Connections is evaluating the effect the plan would have on premiums.