State considers asking poor to pay for health care coverage

The state is thinking about giving tens of thousands of New Mexicans living at or below the poverty line a choice: pay $75 monthly premiums currently paid by the state or risk losing their health care coverage.

State officials conceded this week if the cost-saving measure were adopted it could push some of the more than 45,000 low-income adults making $903 or less a month off New Mexico’s health care rolls.

“They would lose coverage,” Human Services Department (HSD) spokeswoman Betina Gonzales McCracken said of individuals who might find paying monthly premiums financially out of reach.

The proposal, one of dozens under consideration, would apply to a program once viewed as a way to lower the state’s high uninsured rate, which is second only to Texas –the State Coverage Insurance (SCI) initiative, which New Mexico started several years ago.

The idea already is running into opposition from state lawmakers who say demanding $75 a month from individuals who might not be able to afford it would limit access to health care.

“I know we have a tough budget,” said Rep. Danice Picraux, D-Albuquerque, and chairwoman of the Legislative Health and Human Services Committee. The panel is charged with studying health care issues between legislative sessions.

“I can’t tell them where they should be cutting or re-directing money, but it’s not my first choice,” Picraux said.

Ideas to cut costs

The idea of making low-income residents pay their own premiums is part of the New Mexico Human Services Department’s ongoing attempt to address ongoing budget pressures.

It also is a reminder of how harrowing the state’s path over the next three years is as it struggles to provide health care for its poorest residents before 2014, when the federal government swoops in to assume most of the costs under the new federal health care law.

While the individuals targeted by the proposal live at or just below the federal poverty level, they currently make too much to qualify for Medicaid, the government’s low-income health insurance program. Under the new health care law, they would automatically qualify for Medicaid in 2014, when the new law expands eligibility to individuals who earn 133 percent of the federal poverty level.

State Medicaid director Carolyn Ingram told the Independent on Tuesday that the idea of doing away with premium assistance for this population is only a suggestion, and that no final decisions have been made.

But she acknowledged that the state is considering that idea and others, including charging low-income residents nominal co-pays for emergency room services, because the state’s Medicaid program is under severe budget pressures. Medicaid is a primary funding source for the SCI program.

New Mexico’s budget crunch

A confluence of factors is creating the financial pressure.

First, state officials project that the number of New Mexicans, adults and children, using Medicaid and Children’s Health Insurance Program (CHIP) will grow by 8 percent between this past December and June of next year, from 479,000 to 518,000 individuals. CHIP provides health care for low-income children from families that make too much to qualify for Medicaid.

Currently New Mexico pays roughly 20 percent of Medicaid costs, thanks to federal stimulus dollars. The federal government picks up the other 80 percent. But paying one fifth of the costs is a struggle because of lagging revenues, state officials say.

Add to that the fact that federal stimulus dollars now helping New Mexico pay for Medicaid run out in December, unless Congress extends the deadline. If Congress doesn’t extend the federal Medicaid stimulus dollars, New Mexico will have a $160 million budget hole for the year that starts July 1. That’s because the state budget the Legislature passed in March assumed congressional approval of an extension and budgeted $160 million in the anticipated dollars to help cover costs.

It’s unclear whether Congress will pass that extension.

So, in essence, New Mexico faces a double whammy: find money to replace the lost federal dollars while trying to figure out how to address the growing enrollment in Medicaid and CHIP.

Financial strain on SCI

All those budget pressures are placing a strain on the State Coverage Insurance program, which is funded both by federal and state dollars, Ingram said.

The program was always envisioned as a way to extend health care coverage to New Mexicans who either didn’t have it because their employers didn’t provide it or because they made too much money to qualify for government programs.

Because it’s not an entitlement program, the federal government caps how much New Mexico can spend in federal dollars on the program. At the same time the state is running short of money.

“Unfortunately with the state budget, we are running out of both pots of money,” Ingram said.

Currently the state picks up the $75 monthly premiums for more than 45,000 adults across the state, making them eligible for New Mexico’s State Coverage Insurance program.

But the budget pressures are making the state’s assistance increasingly difficult, she said.