Closed loopholes, Medicaid cuts and potential higher health insurance costs buried in Gov. supported bill

A piece of legislation moving through the New Mexico Legislature offers a window into how difficult it is to pay for and deliver healthcare during a state budget crisis, particularly at a moment when uncertainty in Washington clouds the future of healthcare in the U.S.

Sponsored by Republican Rep. Paul Bandy of Aztec and supported by GOP Gov. Susana Martinez, House Bill 316 seeks to reduce state spending on Medicaid by pushing hundreds of people off a little-known state program — the New Mexico Medical Insurance Pool, also called the “high risk pool” — and onto the state’s health insurance exchange. The high risk pool currently offers health coverage for the sickest of the sick, more than 2,700 people who suffer from heart disease, cancer, Hepatitis C, neurological disorders and HIV/AIDS.

The bill is one of many proposals that would save money as New Mexico attempts to survive a state budget crisis. The legislation, in effect, is a one-two punch to health insurance companies, closing what Martinez considers a tax loophole by phasing out a tax credit for health insurers. It would trim Medicaid costs in a way that would end up increasing some health insurers’ costs, too.

At the same time the governor, Bandy and others want to shrink the high risk pool some observers say the timing of such legislation is misplaced. A Republican-controlled Congress that is intent on overhauling and possibly repealing the Affordable Care Act known as Obamacare is signaling to states that they may need such programs in the future.

In late February Republican congressional leaders rolled out a plan that included an unspecified amount of money for “innovation grants,” which would help states develop or strengthen high-risk pools and other programs.

The provision bore a resemblance to an idea Speaker of the U.S. House of Representatives Paul Ryan rolled out in June 2016 that mentioned dedicating $25 billion to helping Americans priced out of coverage elsewhere find insurance in high risk pools.

Many states eliminated or scaled back such programs earlier this decade when Obamacare prohibited insurers from withholding medical insurance due to an individual’s pre-existing conditions. Health insurance exchanges, also creations of the federal health care law, meanwhile, were designed to integrate formerly hard-to-insure individuals into the population now shopping for insurance in the commercial insurance markets.

It appears that the strategy worked as intended in New Mexico. The population using the high risk pool has shrunk from a high of about 10,000 individuals to about a quarter of that number since New Mexico’s health exchange began operating, according to Democratic Rep. Deborah Armstrong of Albuquerque. She is CEO of the medical insurance pool.

A fact sheet puts at 2,771 the number of enrollees today. Roughly 1,000 have no other health insurance option because the ACA didn’t apply to them or they can not find insurance on the exchange, Armstrong said.

Read the remainder of the story here from New Mexico in Depth.

People, Power and Democracy is a collaborative media project between KUNM, New Mexico in Depth, New Mexico PBS and the New Mexico News Port that explores the influence of money in New Mexico politics. Partial support for the project comes from the Thornburg Foundation.

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