The Los Angeles Times looked at several states, not including New Mexico, and found the insurance industry exerts a surprising amount of over the regulating process through the amount of money—$42 million since 2003— the industry contributes to state officials.

There’s been much debate since April over New Mexico’s ability to reduce or reject health insurers’ requests for premium hikes and whether to change state law to give regulators such power — or make that power explicit, say a few who have argued that New Mexico already has that power but it’s vague.

It was in April that the New Mexico Division of Insurance approved a 21.3 percent increase to what about 40,000 New Mexicans pay Blue Cross Blue Shield New Mexico in monthly premiums for individual health care policies. (Granted, the 21 percent rate hike was lower than what Blue Cross originally proposed. But New Mexico officials achieved that lower premium rate increase through negotiations, not through any inherent power to reject a health insurer’s request for a rate increase and require a lower one, as Massachusetts has done in the past six months).

The insurance department’s approval of the 21 percent rate increase led to a tempest of protests, the resignation of the then-Insurance Superintendent and the insurance division reconsidering the request, a move that was unsuccessfully challenged in court by the insurer.

A criticism leveled repeatedly by critics of the decision – including members of the Public Regulation Commission, the agency the insurance division is under – was the lack of oversight exerted over the semi-autonomous insurance division under the current setup.

In April Massachusetts, which created the nation’s first health insurance exchange, rejected 235 of 274 proposed premium increases requested by health insurers who offered plans on the state’s health insurance exchange.

Massachusetts’ action opens a window into the questions and issues New Mexico might encounter if it strengthens its authority to reject health insurance rate requests prior to 2014, when the federal health care law empowers states to reject unreasonable premium rate increases.

The affected insurers in Massachusetts immediately filed a court challenge and a debate has grown in Massachusetts over the past two months over whether the sitting governor, Deval Patrick, was playing politics in an election year. Last month a Massachusetts state judge refused to overturn the state’s rejections, saying that insurers had not exhausted the state’s administrative appeal process.

Massachusetts’ rejections marked the first time the state has used its authority to turn down health premium increases, according to the Boston Globe.

In Massachusetts’ case, regulators turned down the majority of premium increases because they came in above the 7.7 percent hike the state was comfortable with, according to the Globe. The paper reported that insurers had proposed base rate increases averaging 8 percent to 32 percent for hundreds of separate products, offering different mixes of benefit designs, copays, and deductibles.

Massachusetts plans with rejected rates were not available on the exchange

But in one important way, Massachusetts’ situation differs from New Mexico.

While the confrontation between Massachusetts and the health insurers has played out in the courtroom, it also has played out on Massachusetts’ first-in-the-nation health insurance exchange, said Tom Dehner of Health Management Associates and Massachusetts’ former Medicaid director.

Dehner sat on the board that governed Massachusetts’ health insurance exchange, known as the Commonwealth Connector, until he left that job to go into the private sector.

“The effect of the situation as it evolved was that the plans on the exchange without approved rates were not choices for a consumer,” Dehner told The Independent via e-mail. “The insurers themselves retained a ‘seal of approval’ that allowed them to participate on the exchange, but for a consumer seeking insurance to begin, say, in June, only insurers with approved rates for the Connector to quote were, from that perspective, ‘there.’”

Dehner went on to write that “One insurer has settled with the state (Massachusetts) at a lower increase than proposed.  The others right now are offering plans on the exchange at their “old” rates (and expecting to lose money as a result, and still hoping to get court relief).”

Government officials, health insurers and advocates across the nation are watching to see how the dispute between Massachusetts and the companies ends.

The federal health care law borrows greatly from the Massachusetts health insurance exchange model. In addition, it gives states the power in 2014 to reject unreasonable premium increases requested by insurers.

What ‘unreasonable’ means and who gets to decide would likely involve the usual input from lobbyists, advocates, medical professionals and the insurers themselves.

Already some New Mexico officials are advocating that the state should not wait until 2014 to define ‘unreasonable’ and should re-write law to strengthen the state’s authority to reject premium increase requests determined to be unreasonable.

At this point Massachusetts might have leverage that most other states don’t because it has a health insurance exchange.

Dehner told New Mexico officials during a presentation he gave this past Friday in Santa Fe that a state has leverage when it creates an health insurance exchange, a concept at the center of the new federal health care law that requires health insurance exchanges by 2014.

“As far as I can tell, most people thing that health insurers very much to want to do what it takes to be a plan that is part of the market that is created by this exchange,” Dehner told the crowd during Friday’s presentation. “The fact that carriers are going to want to have access to this new insurance market is a real advantage for everyone.”

Here in New Mexico, the state Public Regulation Commission recently directed the state insurance division to suspend the rate increase, provoking threats of a lawsuit by Blue Cross Blue Shield. And stories about what Massachusetts has done are making the rounds among state lawmakers and officials following health care.

There has been high-profile fallout from the state Insurance Division’s approval in April of a 21-percent hike in what Blue Cross Blue Shield charges 40,000 New Mexicans in premiums.

“There’s worry between now and 2014 that there will be huge increases in premiums,” Sen. Cisco McSorley, D-Albuquerque, said Thursday during a meeting of a legislative working group.

It’s a question other New Mexico state lawmakers have asked. They cite the Blue Cross Blue Shield rate request as the first of possibly many rate increase requests that will come from New Mexico health insurers in anticipation of some of the restrictions imposed on health insurers by the new federal health care law.

Not everyone thinks that the new law is driving up costs. Some local and national officials say the new federal law expands coverage to the uninsured but doesn’t do a good job of containing the rise in health care costs.

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.

Johnson’s analysis doesn’t correlate perfectly with Massachusetts; Scott Brown pulled off an upset by beating Massachusetts Attorney General Martha Coakley in a special election for the U.S. Senate seat vacated by the death of Sen. Ted Kennedy.

Johnson has been going throughout the nation after setting up a nonprofit called “Our America: The Gary Johnson Initiative.” He will speak to the Republican Liberty Caucus of New Hampshire tomorrow. New Hampshire, political observers have noted, is the site of the first Presidential primaries, held the week after the Iowa caucuses. Some have speculated that Johnson may run for President.

The seat was lost because of voter anger in Massachusetts, an apathetic Democratic base, a seemingly lackluster Democratic candidate prone to gaffes and seemingly averse to holding public campaign events–and another quirky special election. Brown vastly outnumbered the amount of campaign events that Coakley held and his campaign mistakes did not create the media firestorms that Coakley’s did.

All agree — including President Barack Obama who called to congratulate Senator-elect Brown last night — that Brown ran a better race than Coakley.

Republicans in New Mexico welcomed the news and hoped that the trend would extend to the 2010 statewide elections, when all representatives are up for re-election, and all statewide seats, including the governor’s office, are up for grabs.

“The rise of the Tea Parties and the elections in New Jersey and Virginia clearly show people are tired of the government taking control of their lives,” Republican gubernatorial candidate Doug Turner said in a press release.

Another Republican gubernatorial candidate, Allen Weh, said that Brown’s win is an example of voters from all parties being “frustrated with the status quo.”

Republican candidate Susana Martinez said: “Frustrated voters [in Massachusetts] cast their ballot for change and rejected the entitlement mentality.”

Both Republican candidates in the 3rd Congressional District welcomed the news, with Adam Kokesh saying that it proves that there is no such thing as a safe Democratic seat.

While Massachusetts recipients of federal stimulus money collectively report 12,374 jobs saved or created, a Boston Globe review shows that number is wildly exaggerated. Organizations that received stimulus money miscounted jobs, filed erroneous figures, or claimed jobs for work that has not yet started. The paper’s finding is based on the federal government’s just-released accounts of stimulus spending at the end of October. It lists the nearly $4 billion in stimulus awards made to an array of Massachusetts government agencies, universities, hospitals, private businesses, and nonprofit organizations, and notes how many jobs each created or saved.

Connecticut Gov. M. Jodi Rell announced Tuesday she wouldn’t run for re-election, throwing next year’s gubernatorial race into chaos, the Hartford Courant reports. Now Democrats and Republicans are suddenly scrambling for front-runner status as they prepare for primaries next August.

A federal judge this week handed down a defeat for several senior creditors that had hoped to buy Philadelphia’s newspapers by bidding the amount that they are owed, the Wall Street Journal reported. The judge reversed a ruling that would have allowed Philadelphia Newspapers LLC’s lenders to bid the more than $300 million they are owed at a coming auction for the newspaper company, the paper reported.

The paper goes on to explain:

Unless they are willing to pay cash, the lenders are now blocked from participating in a coming auction for the company, which publishes the Philadelphia Inquirer and Daily News. The setback for the lenders marks a victory for a group of local investors who are aiming to buy the company. The local investors are supported by the publishing company’s chief executive, Brian Tierney.

John Allen Muhammad, the sniper who kept the Washington region paralyzed by fear for three weeks as he and a young accomplice gunned down people at random, was executed Tuesday night by lethal injection, the Washington Post reports. This story brings back memories of those horrible days. I didn’t live in Virginia or Maryland, the areas most terrorized in 2002 by the randomness of death, which came unexpectedly to individuals as they pumped gas or walked out of a store. I watched from afar, transfixed, in Connecticut, a state that at the time was coming out of the stupor and disorientation of losing more than 100 residents in the 9/11 terrorist attacks only to imagine the possibility of biological terrorism two months later when anthrax snuffed out the life of a woman who lived 10 miles from me. Yes, the sniper shootings happened hundreds of miles away and nearly a year after 9/11, but all the events blur together for me now.