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.
Like the rest of the country, by 2014 New Mexico must offer one-stop shopping for health insurance.
Called a health insurance exchange, it’s at the center of the new federal health care law.
On Thursday state lawmakers, government officials and others got a glimpse at two potential models for an exchange.
The legislative working group heard from Utah officials about its new pilot project as well as Massachusetts’ first-in-the-nation health care exchange, which, in some ways, served as a model for the recently passed federal health care law.
The presentations offered officials a sense of the range of available options open to New Mexico, with Utah and Massachusetts representing two near-extremes in the growing conversation about how to configure a state-based health insurance exchange.
The presentations also served as a preview, showcasing possible issues and questions New Mexico officials are likely to encounter over the next three years as they decide what the state’s exchange will look like.
Utah vs. Massachusetts
Utah and Massachusetts might have gotten a jump on other states in setting up health insurance exchanges, but, in many ways, the two models are a study in contrasts.
Massachusetts created the first health insurance exchange in 2006, and with it mandates that required every state resident to be insured and for companies to offer workers coverage — or face a stiff penalty.
The goal was to bring nearly universal health coverage to the New England state through the exchange, envisioned as a place for uninsured or under-insured state residents to find affordable health insurance policies, and the individual and employer mandates. Some Massachusetts residents who couldn’t afford health insurance qualified for financial subsidies.
The state of Massachusetts, meanwhile, plays a significant role in how the exchange is operated, said Dick Mason of Health Action of New Mexico, an organization seeking affordable health insurance for every New Mexican.
A board chaired by Massachusetts’ state budget director and made up of handpicked appointees by that state’s governor or attorney general oversees the entity, which employs dozens to help oversee the project.
The new federal health care law just passed by Congress incorporated many aspects of Massachusetts’ plan.
But the spiraling cost of insurance, combined with the bad economy, has strained Massachusetts’ state’s budget, thrusting Massachusetts into the news over the past year.
Mason told the legislative working group that Massachusetts is now engaged in a fight to contain the growth of health care costs.
“They have taken some bold steps over the last six months,” Mason said.
That has included the state rejecting several rate increase requests from the insurance industry in recent months.
The group ought to invite the outgoing director of Massachusetts’ health insurance exchange, Jon Kingsdale, to speak about that state’s experiences, Mason told the group.
Utah follows Massachusetts’ lead – sort of
This year Utah started a pilot health insurance exchange for employers with 2 to 50 employees. It’s a pilot that’s been in the works since 2008, when legislation passed creating the Office of Consumer Health Services, an agency with two employees and $600,000 annual budget.
Under Utah’s law, the small employers participating in the exchange pilot can pay a portion of the employee’s premiums or deposit money into their workers’ health savings accounts allowing them to buy any plan they want.
Utah’s exchange works in two parts, said Dr. Stephen Neeleman, CEO of Health Equity, a company that helps run Utah’s health insurance exchange.
One company markets and enrolls the workers from the participating companies; a second company — Health Equity — collects the premiums from the employers to pay the insurance carriers and brokers, Neeleman said.
A feature in the Utah plan that has earned some notice allows workers to pool contributions from several sources — an employer, government assistance or perhaps money from a spouse’s contribution from their employer– to have enough to buy a basic plan, Neeleman said.
Earlier this year workers at the 150 participating employers chose from the 67 insurance plans offered in the exchange.
Compared to Massachusetts’s annual cost of $25 million, Utah’s set-up costs were nominal, Neeleman said, referring to the $600,000 annual budget.
“There was a one-time fee the state put out of $600,000 to both develop the software and then ongoing $600,000 to market the exchange and to have some people to provide some oversight over the exchange,” Neeleman said.
As for state oversight, Neeleman said, “It’s a little bit like the New York Stock Exchange, that’s regulated by the Securities and Exchange Commission, which is public making sure that there’s right transparency.”
Utah has plans to start up a similar exchange for large companies employing 20,000 workers in 2011.
Both Massachusetts and Utah’s plans have their supporters and critics.
Supporters of Massachusetts’ plan say the state provides an example of public-private partnership that’s working toward universal coverage, with the state offering real oversight at the same time private insurers supply coverage. Critics charge that Massachusetts’ plan is too costly and doesn’t allow for enough private sector innovation.
Supporters of Utah’s plan, on the other hand, hail it for allowing the health insurance industry to have more latitude with an emphasis on private-sector . Critics say there isn’t enough government oversight and it doesn’t have as ambitious goals as the Massachusetts model.
The new federal law and health care exchanges
Both models provoked questions from members of the working group.
“Are there individuals who have insurance but really don’t have coverage by any objective measure,” Sam Howarth, a director at the New Mexico Department of Health, asked Neeleman. In essence are employers giving enough money to help employees?
Neeleman said that Utah was still working out kinks in the system, but that he wasn’t aware of that happening.
The new federal law allows states a bit of flexibility in crafting the health insurance changes, saying that they can develop statewide or multiple, sub-state exchanges or band together with other states to create multi-state, regional exchanges.
If a state doesn’t set up its own exchange or join a multi-state effort, the federal government will operate the exchange for the state.
Ann Sperling, who heads up a subcommittee of the working group, said the state had the option of identifying an existing entity to operate the state’s health care exchange or it could create that entity from scratch.
Sperling offered up two organizations as possible contenders to operate the state’s exchange– the New Mexico Health Insurance Alliance and the New Mexico Medical Insurance Pool.
“Maybe you want the pool being the individual exchange and the alliance being the group exchange,” said Sperling, Vice Chair for Professional Development at the National Association of Health Underwriters.
But Sperling acknowledged that her group, charged with looking at health insurance exchange models, needed more time to do in-depth study.
Utah and Massachusetts aren’t the only states to have moved toward creating an exchange. In 2009 Oregon recently created the Oregon Health Authority, which likely will function as the state’s exchange.
