I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
While environmental activists played their part yesterday during demonstrations at the capitol building, going so far as to dress up as solar panels and to sing the tune of “You Are My Sunshine,” their counterparts, the anti-cap-and-trade contingency who has…
Roughly one quarter of University of New Mexico students are unimpressed with the state’s flagship public school, according to a survey that questioned college students about their higher education experiences.
Does Blue Cross Blue Shield New Mexico’s rate increase presage a coming stampede from health insurers seeking increased rates prior to the first reforms of the new federal health care laws taking effect, a state lawmaker wondered last week.
“This is going to be the first of the increases requested before … September, when some of the reforms kick in,” state Sen. Dede Feldman, D-Albuquerque, said hours after the settlement with Blue Cross Blue Shield was announced April 26. The state’s settlement allows the company to raise premium rates by an average of 21 percent on roughly 40,000 New Mexicans. There appeared to be no connection between the new law and the firm’s request for a rate increase.
“I’m hoping it is not true, but I fear that it will happen,” Feldman said.
A quick survey of several officials in recent days found differing opinions on the question.
Some officials said, yes, the new law could lead insurers to seek rate increases while others said any attempt to untangle how much of future requests for rate increases are due to the new law vs. the perennial rise in medical costs could prove vexing.
To justify her concern about a flurry of rate increase requests, Feldman pointed to two provisions in the new federal law that could expand insurers’ liability. Both are scheduled to go into effect this September.
One would ban insurers from denying coverage to anyone under 19 with a preexisting condition. The other would allow adult children to stay on their parents’ policy until age 26.
A third provision in the new law was highlighted by Morris Chavez, who resigned Tuesday as the state’s insurance superintendent.
Like the others, the provision Chavez referred to would take effect in September. But this one would prohibit health insurers from capping the amount of money spent on health care during the lifetime of a policyholder. Currently, health insurers can cap limits, which range from $1 million to $8 million, according to varying estimates.
“I’m fully anticipating we’re going to see rate increases,” Chavez told the Independent on Monday afternoon. Chavez was quick to add that he didn’t see any future rate requests as clear evidence that insurers are trying “to pad their pockets.” Instead, they would be reacting to the increased costs of doing business, he explained.
It also could take months before health insurers realize how much the provision will cost them and before they seek to increase rates, Chavez said.
Health insurers likely would wait to see federal regulations on the provision, ask their actuaries to price the long-term costs of not capping health care expenses and then ask New Mexico’s Insurance Division for a rate increase.
“I think you’re going to see them come to our department and similar departments across the country,” Chavez said.
So far, it appears that there hasn’t been a rush to increase rates in other states.
Oklahoma Insurance Commissioner Kim Holland said last week that “It’s still early for insurers in terms of the bill” and that her state has “not seen a rash of increases.”
Holland is the secretary/treasurer for the National Association of Insurance Commissioners, an organization that represents the country’s state insurance commissioners – the local officials likely to hear health insurers’ requests for rate increases.
The new law’s requirement that children with preexisting conditions are covered would increase insurers’ liability and possibly lead to requests to increase rates, Holland said.
But she cautioned that much about the new law’s impact on rates remains unclear because many provisions don’t go into effect until 2014.
She added that the new law doesn’t do much to contain medical costs, which is one of the culprits helping to drive rate increase requests in the past.
It’s an opinion shared by New Mexico Public Regulation Commissioner Jason Marks, who recently wrote an op-ed in Albuquerque’s Weekly Alibi expressing much the same sentiment.
“I think Sen. Feldman is probably right,” Marks told the Independent of the potential for the new law to put financial pressure on health insurers, leading to rate requests. In particular, he pointed to the requirement for companies to insure children with preexisting conditions.
“It will increase risk to insurers,” Marks said.
“I see the potential for it,” Marks said. “I think the federal stuff could add a little more pressure. But we’re seeing it anyway.”
Marks then referred to what he had written in his recent op-ed – “the federal health reform legislation helps, but it doesn’t do very much about cost control.”
