Understanding the Health Security Plan

Surely none of us needs to be reminded about the problems we face with our current health care system. Even prior to COVID-19, we were confronted with rising health care costs, increasing financial burdens on insured and uninsured people, hospitals on the brink of bankruptcy, and higher and higher pharmaceutical drug costs.

The Health Security for New Mexicans Campaign, a diverse coalition of 170 organizations and thousands of New Mexicans, has developed a homegrown solution. The Health Security Act would enable New Mexico to create its own health plan that guarantees comprehensive coverage and freedom of choice of provider (no more networks) for most residents. Three independent studies have concluded that such a plan would dramatically slow the rise in health care costs. 

It is commonly accepted that the more people who are insured in one plan, the lower the costs. This is why large companies are able to get better premium deals with insurance companies than smaller ones.

But it is not only because of the rule of large numbers that the Health Security Plan presents a path that takes us out of the administratively complex jungle that causes so much frustration for patients and health professionals alike. There are countries – even very small ones – that guarantee health coverage for their residents, spend far less than the United States, and have better health outcomes. 

While these countries all have distinct systems, they each have adopted key policies that have led to the positive results that appear in so many international comparisons of health care systems. 

Here are the main ones:

• Standardized payment systems for health professionals. (Instead of 20 different fees for the same procedure, depending on who is paying the bill.)

• Set budgets (global budgets) for hospitals, which provide hospitals with a secure revenue source. (No more pages and pages of inexplicable charges. No surprise bills. No medical bankruptcies.)

• A program that negotiates drug prices with pharmaceutical companies. (Even Malta – with a population of around 500,000 – has such a program.)

• An IT system that provides providers with patients’ medical history, no matter where they receive care.

• One set of comprehensive covered services. (Easier for patients; easier for health professionals and hospitals.) 

Surely, addressing these areas would be critical to solving our health care system challenges.

So, what is New Mexico doing, and what can you do?

In 2021, the legislature allocated funding to the Office of Superintendent of Insurance (OSI) to oversee the actual design of the Health Security Plan, beginning with research on key topics. 

The Health Security Act, which sets out the parameters for the Health Security Plan, does not go into the specifics.  This is why the design process is so important.

In 2022, the legislature allocated even more funds – close to $800,000 – to OSI to continue the second year of the design process.

In May, Sen. Jerry Ortiz y Pino shared with Superintendent Russell Toal a list of six proposed topics that we and our legislative sponsors had identified and that seemed to be acceptable to the Superintendent:

• Develop a global budgets program for hospitals 

• Develop a standardized payment system for health professionals 

• Develop a program that will lower drug costs 

• Develop an inter-operational IT system 

• Conduct a cost analysis of the Medicaid managed care program, which relies on private carriers to provide coverage

• Gather annual NM health expenditure data so the cost impact of any new policies that are being implemented can be evaluated 

Based on public statements made by Superintendent Toal and Secretary of Human Services David Scrase, the governor and her administration are focusing their efforts this year on how to get more New Mexicans covered under Medicaid and how to provide financial support for those who are not eligible for Medicaid but can’t afford the premiums and other out-of-pocket costs.

While this is very important, developing ways to cover more people will not address the key systemic problems of why costs (and premiums) are rising. And, of course, focusing on current health care access issues should not preclude simultaneously moving ahead with long-term systemic solutions. 

 Last year, OSI did an excellent job with the design process, hiring experts who provided useful information, including options that should be pursued during this second year. 

Unfortunately, there has been almost no discernable action on this year’s six priority topics so far. (A request for proposals for a global budgeting study was finally released on September 30. That’s all that we’ve seen.)  

Health Security Campaign leadership is working closely with our legislative sponsors, Sen. Ortiz y Pino and Rep. Hochman-Vigil, to deal with this situation, but you can help too:

* If you are at a forum or a meeting with the governor, tell her why you think it is crucial for the Health Security Plan design process to continue.

* Contact your state representative candidates and your state senator. Tell them why you think the design process is so important to the health of our state.