Republicans took over the House in the elections earlier this month and made large gains in the U.S. Senate.

In New Mexico, Republicans won one of the three Congressional seats this year. Neither of the two U.S. Senate seats in New Mexico were up for election this year.

That’s a better rate than neighboring states like Texas and Arizona, a government fact sheet shows.

The numbers of residents enrolled in the newly created federal high-risk pool in New Mexico comes at a time when some are questioning how well the programs are working across the nation as a stopgap measure to help hard-to-insure individuals.

The federal high-risk pools were the first major programs rolled out from the new health care law earlier this year. The pools are supposed to act as a bridge to 2014, when the new health care law will create state-run exchanges that supporters say will address the challenges hard-to-insure individuals face in getting insurance. Usually individuals are denied coverage in the commercial insurance markets because of preexisting medical conditions.

The 130 or so enrolled in New Mexico’s new federal high-risk pool is far under the ceiling of what the new program can accommodate. State officials have estimated that that’s enough money to cover 1,000 to 1,500 hard-to-insure New Mexicans over three years based on the $37 million the federal government has set aside. Varying estimates classify anywhere from 5,000 to 50,000 of New Mexico’s uninsured as hard to insure because they have preexisting conditions or are critically ill.

But compared to other nearby states, New Mexico’s outreach to such individuals appears more aggressive, a government fact sheet shows.

With two million residents New Mexico has enrolled about a third of the 393 individuals who are participating in Texas’ new federal high-risk pool as of Nov. 1, according to the fact sheet. But  Texas, the second-most populous state in the nation after California, has a population more than 10 times the size of New Mexico.  Likewise, Arizona, with an estimated 2009 population of 6.5 million, had enrolled only112 individuals in its new federal high-risk pool by Nov. 1, the fact sheet shows.

Colorado, with an estimated population of 5 million, had enrolled 368 individuals in its new federal high-risk pool.

New Mexicans who can qualify for the federal high-risk pool are individuals who’ve gone without coverage for six months and have been unable to buy insurance, often because of preexisting conditions.

The federal high-risk pool supplements a similar program the state has offered for decades, the New Mexico Medical Insurance Pool.

Others include a ban on health insurers imposing lifetime limits on coverage, meaning that the insurers can no longer discontinue coverage once spending on an individual’s or a family’s health insurance hits a certain predetermined level.

The new law also tackles annual dollar coverage limits currently in place, with a provision taking effect today that raises the limit a health insurer can spend on “essential” health benefits each year.

Here’s a short, informative explainer from Kaiser Health News on the provisions taking effect today.

The monthly survey questions 3,000 consumers about their ability to pay for healthcare. According to Reuters, “On every survey question, responses were more pessimistic in July than they were in December.”

The increased dissatisfaction with the current health care system comes after Congress passed a health care reform law earlier this year. David Kendall, a senior fellow for health and fiscal policy at ThirdWay, a centrist think tank, is quoted in the Reuters piece as theorizing that the “dissatisfaction with the current health system likely reflects a letdown after the reform debate subsided.”

“The healthcare debate raised people’s expectations and there is now disappointment as a result that the problem isn’t solved,” Kendall said.

Most of the provisions of the new federal health care law don’t take effect until 2014, although some provisions already are changing aspects of health care in the country.

Under the new federal health care law health insurers will be required to spend 80 percent – and in some cases 85 percent – of what they collect in premiums on medical costs, leaving only so much for administrative expenses.

The move by the National Association of Insurance Commissioners (NAIC) effectively approved a proposal that prohibits health insurers from counting fraud prevention efforts and other investments as medical costs, a development that fueled the ire of health insurers who warned of dire consequences for health care consumers, according to published reports.

Montoya defended Tuesday’s vote, saying, “There were some really smart people who put a lot of time and effort into this.”

The medical-loss ratio, as it is called, is an important benchmark in the new federal law to keep health insurers from spending too much on administrative costs, supporters say.

The federal government has tasked the NAIC with helping to come up with a definition of medical cost. That led to a months-long examination by a subgroup of the NAIC that included the New Mexico Division of Insurance, Montoya said.  The agency participated in weekly conference calls with regulators from other states to sort through input given by the health care industry, consumer advocates and others, said Kimberley Scott, who participated in the calls for the New Mexico insurance division.

What exactly can be counted as a medical cost had been unclear until Tuesday’s vote by the NAIC, which cleared away some of the uncertainty.

Insurers had hoped the NAIC would count fraud prevention efforts and other investments as medical costs. But with Tuesday’s vote, the NAIC sent a message that they might not be, prompting an industry association to predict dire consequences for consumers, according to published reports.

Under the new federal healthcare reform law, health plans must spend at least 80 percent of premiums in the individual and small-group markets on health care and 85 percent for large group plans, according to The Hill.

If they fall short, the plans must offer rebates to their customers, the Hill reported.

The state insurance division is no stranger to the concept of medical loss ratios.  The New Mexico Legislature passed its own version of medical-cost loss thresholds that was signed into state law earlier this year.

“Quite honestly the staff has been working on it as long as this (NAIC) sub group,” Montoya said.

So when the retired engineer learned Monday that New Mexico had won a $1 million federal grant to strengthen oversight of those rates, he cheered.

“When people don’t tell me why they’re raising rates, that gets my attention,” Ley told The Independent.

New Mexico was one of 45 states awarded $1 million Monday to help beef up how it reviews rate-hike requests by health insurers.

U.S. Health and Human Services (HHS) Secretary Kathleen Sebelius on a conference call with reporters Monday characterized the money as a way to “restore some basic fairness” for consumers who find themselves battling a perennial rise in the cost of health care.

What is an ‘unreasonable’ premium increase?

The money is part of the nation’s new health care law and is meant to help states crack down on what some officials are calling “unreasonable” rate requests by health insurers.

Exactly what is an unreasonable rate increase is still up in the air, Sibelius said.

Federal health officials are conducting a wide-ranging discussion with consumers, business groups and the National Association of Insurance Commissioners and other groups to determine how to define “unreasonable.” Officials are trying to find a balance between a company’s need to stay in business and a consumer’s ability to afford health care.

“A 20 percent rate hike from a company that has not raised rates in five years and is at the bottom end” of the price spectrum in a local market likely wouldn’t meet that threshold, Sibelius said.

It’s a much different matter for a company that asks for a 20 percent increase after raising rates in each of the five years prior and whose prices are among the highest in a local insurance market, Sibelius said.

“All of those issues have to be taken into consideration,” Sibelius said. “We really can’t give you a clear explanation of what it is going to say.”

Jay Angoff, the director of HHS’ Office of Consumer Information and Insurance Oversight, told reporters that the money announced Monday would help states figure out some of these issues.

“These grants will enable some insurance departments to do what they’ve wanted to do but haven’t been able to do because of budgets,” Angoff said.

Rising health care costs fuels consumer anger

The federal government’s interest in the issue comes as New Mexico struggles to deal with a high-profile case almost exactly like one Sebelius described.  In April,  Blue Cross Blue Shield won the right to raise premiums by 21.3 percent on 40,000 New Mexicans, stirring up heated protests. The Insurance Division later decided to reconsider the request, but only after questions were raised about the division’s decision-making process and the state Insurance Superintendent at the time of the decision decided to resign.

Ley is one of those New Mexicans affected by the Blue Cross Blue Shield rate hike. He estimates he’ll pay $130 more every month if the rate hike approved earlier this year is allowed to stand. The rate increase will be second in as many years, Ley said.

“They hit me with the first increase six months after I went with Blue Cross Blue Shield,”  Ley said in a phone interview with The Independent. That rate hike in 2009 was 19 percent, he said.

State ideas on reforming the rate-review process

The state already has some ideas on how it will spend the $1 million it received Monday to reform the so-called rate-review process. They include creating a Consumer and Business Services Bureau inside the state Division of Insurance to review individual and small group health insurance rates.

The Insurance Division wants to make all insurance rate filings public on its website. According to the state’s application for the $1 million grant, it also will seek legislation during the 2011 legislative session to empower regulators to consider a company’s surplus and investment income, cost containment efforts, and the insurer’s overall profitability, rather than merely the profitability of a particular insurance policy line.

In the past, insurers were not required to provide financial data like rate histories to regulators. Blue Cross Blue Shield’s failure to provide such historical data earlier this year was one issue raised by an independent insurance rate expert hired by the Attorney General’s office, Allan Schwartz, who concluded the rate hike was unjustified.

Traditionally, insurers in New Mexico have filed rate increase notifications with the Division without submitting documentation of their claimed losses or expenses, other than a letter signed by an independent actuary attesting that the documentation exists.

Ley was not shy about offering his opinion on how the state can improve examinations of health insurers’ requests. “Any review of actual data would constitute a significant improvement,” Ley wrote in an e-mail to The Independent.

“It would seem reasonable to me that, before a premium increase is granted, an independent actuary should review industry-supplied data,” he added. “Both the review and the data should then be made public.”

Some of those innovative approaches include using more nurse practitioners, communicating with patients over the phone or via e-mail, and using shared medical appointments.

New Mexico might have too few physicians, physician’s assistants, registered nurses and other medical professionals to respond to the influx of new patients, state officials said earlier this year. And many medical professionals are concentrated in three areas — metro Albuquerque, Las Cruces and Santa Fe, and not even spread around the state.

Some already are calling for the state to turn to nurse practitioners and physician’s assistants to help fill the gap.

Of course New Mexico faces challenges not easily remedied in part due to its rural character.

There are a dwindling number of primary care physicians in small, rural counties, making it unclear how the state will respond in the short term to the challenge.

According to a report issued earlier this year by the New Mexico Health Policy Commission, Hidalgo County had no licensed physicians in 2009. Hidalgo County, near Arizona, forms the boot heel of the state, and is a large rural county — 3,440 square miles – with nearly 5,000 residents.

In fact, around 70 percent of the state’s 4,689 physicians were licensed in three counties – Bernalillo, Santa Fe and Doña Ana, where about half the state’s population lives — with just over half the physicians licensed in Bernalillo County, the same report said.

In addition to that New Mexico has large tracts of sparsely populated areas or rural communities without a thick supply of medical providers and that often means hospitals pick up the slack, Jeff Dye of the New Mexico Hospital Association, told a group of state officials earlier this year.

The new office came out of a months-long brainstorming session by top administration officials who met regularly to come up with recommendations on how New Mexico can prepare for the nation’s new health care law.

Judging from today’s news release, the governor has taken many of the recommendations from his planning team. The office will use existing staff resources and expand the planning team by adding six new members.

According to the news release, they are:

·         The Secretary of the Department of Finance and Administration,

·         The Secretary of the Public Education Department,

·         The Secretary of the Higher Education Department,

·         The Director of the Risk Management Division of the General Services Department,

·         The Director of the Workers’ Compensation Administration, and

·         The Director of the Women’s Health Advisory Council.

The new Office of Health Care Reform must report to Richardson no later than Nov. 1 on various proposals that must go before the New Mexico Legislature in 2011 for state lawmakers’ approval to help implement health care reform in New Mexico.

The new planning team has scheduled its first meeting for Aug. 18 in Santa Fe. from 10:00 a.m. to 12:00 p.m., at 37 Plaza la Prensa. The public is welcome.

In a story published today Politico quotes several Republicans who acknowledge the strategy, including one former GOP presidential candidate.

Here’s an excerpt:

“Hopefully, we will have an election cycle where we will have a strong wave coming in that is opposed to this and can oppose the funding and the implementation of this,” said Sen. Sam Brownback, who is running for governor of Kansas this fall. The law “has to be funded to be implemented.”