Health reform measures compared

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By Lee Einer

Two health-care reform bills are under consideration by the state Legislature. The following are summaries of both bills:

Health Security Act for New Mexicans (HB 214):

• Establishes a cooperative New Mexico health insurance plan that would cover all New Mexicans with the exception of federal retirees, active duty military and retired military. The tribes as sovereign nations may choose to join the plan. Employer self-funded plans, also known as ERISA plans, would also have the option to join the plan.

• Achieves cost control through negotiation of rates with providers and through creation much larger shared risk pool.

• Establishes a Health Care Commission charged with implementation of the act. Of the 15 board members on the commission, two would be appointed by the governor. Others would be named by the state House and Senate. Members would serve four-year terms.

• Plan benefits would be at least as comprehensive as those enjoyed by state employees.

• Plan requires that the premiums charged for automobile insurance and workers compensation be lowered proportionately to account for the savings to insurers by the medical payment component being absorbed by the Health Security Plan.

• Once the plan is in place, it would ban private insurers from selling coverage that is available through the plan. Supplemental policies for expenses not covered under the plan would not be affected.

• Would be charged with collecting funds from federal sources and premium payments from employers and private individuals

• The Mathematica study, commissioned by Gov. Bill Richardson and his task force, found that the Health Security Act for New Mexicans was the only proposal on the table that would provide universal health coverage at a cost savings to New Mexicans. The study estimated $700 million to $900 million in savings after five years compared with the cost of the state continuing as it is today.

Sen. Carlos Cisneros, D-Questa, who sponsored the Health Security Act, said “It is an issue of whether you want to fix an existing system. The HSA will create a paradigm shift that will look at an entirely different concept of health coverage, using the co-op principle where the system is owned by those it serves. The principle behind the co-op is economy of scale.”

Cisneros said that the bill has both strong support from the people of New Mexico and strong opposition from the insurance industry.

“There is a coordinated, well-financed, well orchestrated effort to diffuse or delay the HSA,” Cisneros said. “Conversely, there are many New Mexicans, a litany of organizations that have endorsed the Health Security Act, individuals that have come in to testify. These are New Mexicans who have not been getting what they believe they should get. It’s little people up against big industry, the insurance companies, trying to get adequate health care.”

Richardson-supported Health Solutions Act (HB62):

• All New Mexicans would be required by law to have health insurance and to provide proof of same to the state or provide a letter stating religious objection to obtaining health insurance. Those households whose incomes are too high to qualify for state programs and who are not insured by their employers would need to purchase health insurance privately if their income is more than 400 percent of the federal poverty level. Households with incomes less than 300 percent of the federal poverty level shall not be required to purchase or enroll in health care coverage unless offered through the person’s employer, available through a public program or otherwise affordable based on guidelines developed by the authority.

• Creates a health care authority. The executive director of the authority and two-thirds of the members would be appointed by Richardson. The authority would be empowered to enact the provisions of the act and to enact regulation to this end. All state government entities currently providing health insurance to New Mexicans would be consolidated under this authority.

• Does not create a new insurance plan, but rather expands the existing insurance infrastructure.

• Does not do away with pre-existing condition exclusions.

• Requires that insurers spend at least 87 percent of premiums collected on direct health care.

• Employers would have to either provide health insurance for their employees or pay into the Healthy New Mexico Workforce Fund.

Note: Three provisions have now been stripped from the Health Solutions Act in committee: Purchase of insurance would not be mandatory, the Heath Care Authority would not have the power to enact regulation, and businesses would not have to pay in to the Healthy New Mexico Workforce Fund. Richardson has called for the Appropriations Committee to restore these measures, but the committee did not do so.

Rep. John Heaton, D-Carlsbad, who sponsored the Health Solutions Act, said the act is still robust even with the removal of the provisions. The authority, Heaton said, will simply have to submit proposed rules to the Legislature for approval rather than enacting the rules themselves. “None of us believe this will hamstring the board in terms of moving forward with its directives,” Heaton said.

Heaton said the reduction of employer contributions to the Healthy Workforce Fund would hurt more, as those contributions would have generated between $70 and $100 million annually to cover the uninsured.

A third bill, the Health Authority Act, would create an independent health authority to examine the various proposals and make recommendations to the Legislature. The independence of the authority distinguishes the proposal from the Health Solutions Act, which would have a Health Authority composed primarily of the governor’s appointees. The House passed this bill this week.