Here's to Your Health
The governor sets his sights on health care reform
By Simon McCormack
Gov. Bill Richardson has outlined a plan that could make it easier for the 410,000 New Mexicans without health care to get coverage.
With at least three other health care bills likely to be introduced in a 30-day Legislative Session usually reserved for the budget and little else, Richardson's proposal faces an uphill battle to become law. It will receive criticism from both sides of the aisle when the session begins on Jan. 15, and so the governor has limited his agenda in order to give his plan a better chance to succeed.
Legislators agree there is a health care problem in New Mexico. Twenty-one percent of the state's residents are uninsured. To combat the high numbers (the national average is 16 percent), the governor organized the Health Solutions New Mexico task force in August 2006. The task force was chaired by Lt. Gov. Diane Denish and included input from legislators, doctors, the uninsured, insurance companies and other stakeholders. The governor took the group's report, filed in June, into consideration and formed the Health Solutions New Mexico proposal, which has four basic cornerstones.
The first is health care insurance reform, which will place certain restrictions on insurance companies.
The second requires everyone to help solve the health care dilemma. Employers would either have to provide health insurance for their employees or put money into a government health care fund. Under the plan, every New Mexican would have to show proof of health insurance by 2010.
The third part of the proposal establishes the Health Coverage Authority. This government entity would house different health care organizations, such as those that provide care to retirees, Albuquerque Public Schools workers and state employees, all under one roof. The idea is to reduce bureaucracy by getting all of these separate organizations on the same page and working together.
The last major element is a requirement to file medical forms electronically. This could drive down the cost of hard copy paperwork and also reduce the time it takes for items like patients' medical records to be transferred from one doctor to another.
"Health Solutions New Mexico will mean every New Mexican has the opportunity to get affordable, accessible health coverage through a public or a private program," says Betina McCracken, communications director for the state's Human Services Department. "We don't want to dismantle the system that's in place, and this is not a socialized government plan. It just means every New Mexican will have the opportunity to get health insurance."
Here’s how it would work.
Richardson's proposal doesn't demolish the health insurance industry, but it does put some clamps on it. Insurance companies will still collect premiums from their customers, but under the plan, they would have to spend 85 percent of the premiums they collect on future care for their customers.
Insurance companies would also not be allowed to turn away people because of pre-existing conditions.
"I think the plan is the furthest the governor has come in terms of proposing a universal health care plan," Democratic Sen. Dede Feldman says. "It would prevent some of the worst abuses by the insurance companies."
Republican Sen. Joe Carraro worries these types of requirements could scare away insurance companies altogether. "Do we want to place so many restrictions that insurance companies pack up and leave New Mexico?" Carraro says. "If that happens, the burden of providing health care gets put on the government and the government will have to pay for it with our taxes. It resembles socialized medicine and it may evolve into that, so I'm not in favor of it right now."
Others, like Democratic Sens. Cisco McSorley and Carlos Cisneros, say Richardson's plan goes far enough. They are supporting a different bill being introduced this session, the Health Securities Act, which would replace most private insurance companies with a state-funded health care system. "It doesn't make sense to keep investing in private insurance," says Mary Feldblum, a lobbyist for the Health Securities Act. "We don't think the private insurance system can be fixed, and if we try to fix it, we'll just end up pouring more tax dollars into the sea."
Denish says the governor's plan strikes a balance with insurance companies. "We have a lot of insurance and business people involved in the plan, and their input has been heard," Denish says. "The Health Securities Act has been tried for more than 20 years, and we need to go in another direction while including elements from that act. Insurance companies are a part of our state's economy and the governor is not willing to dismantle them, and neither am I."
Under Health Solutions New Mexico, companies would either have to contribute to a health insurance plan for their workers or put money into the Healthy New Mexico Workforce Fund, which would help provide money for people without health coverage. If employers do not provide health insurance, they’d have to give $500 per year to the fund for each of their full-time staffers. Employers would fork over $250 every year for every part-time employee.
Individuals wouldn’t be let off the hook either. Beginning in 2010, every New Mexican would have to show proof of health insurance. McCracken says punishments for not having insurance have not been established, and the focus for now is getting information out to the uninsured. "Our goal is to try to educate people about what's available," says McCracken. "Many people may not know they're eligible for free or low-cost health care."
But Feldblum doesn't like the idea of making people buy insurance. "How can you force people to buy insurance they can't afford?" he says.
The Health Coverage Authority (HCA) would oversee smaller health care-providing organizations and would play a major role in determining the needs of the state. Its budget would have to be approved by the Legislature and signed by the governor, but the HCA would have leeway in its decision-making.
Instead of eliminating bureaucracy, Carraro says the HCA would create more. "The governor always thinks we need another layer of bureaucracy," Carraro says. "But you're just adding more money to a system that's already overloaded with bureaucracy."
McCracken disagrees. "If you take all the little organizations that provide health care to specific groups and then get them all together working toward the same goal, that will eliminate a lot of bureaucracy."
Paperwork can be pricey, so Health Solutions New Mexico wants to take it out of the health care equation. Beginning in the middle of July 2009, the plan would require all insurance claims to be filed electronically. By 2010, medical records would have to be paperless as well.
Health Solutions New Mexico won't cost the state much more than it would pay anyway, according to Mathematica Policy Research Inc., a Washington, D.C.-based company hired by the state to crunch numbers on the governor's plan. By 2010, when the plan would be fully in place, the state would need to shell out $29.7 million more than it would spend if no reform was enacted. Those numbers were put into question when the state's Legislative Finance Committee couldn’t replicate Mathematica's results.
McCracken says a substantial portion of the plan's costs would be paid for with the insurance premium taxes the state collects. "Because everyone will be required to have health insurance, we'll be generating a lot more money from premium taxes," she says.
By 2014, Mathematica's study predicts the state would spend $3.3 million less than it would without the plan.
McCracken isn't worried about the other health care proposals being introduced and remains confident the governor's plan will pass in the 30-day session. "Other plans are introduced every year," McCracken says. "We took a lot of them into consideration when we formed our plan. Getting it passed is doable. We've gotten so much input already that doing it in a 30-day session is an accomplishable goal."
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