Summary of New Mexico’s Universal Health Coverage Reform Efforts

1. Summary of New Mexico’s Universal Health Coverage Reform Efforts SCI/Academy Health Summer Workshop for State Officials August 2, 2007

2. Points for Today’s Discussion • Implemented Insure New Mexico! and Health Coverage Initiatives • Governor’s 5-Point Plan to Close the Uninsured Gap in New Mexico • Health Coverage for New Mexicans Committee • Universal Health Coverage Models Analyzed and Outcome Highlights • Next Steps

3. Insure New Mexico! and Health Coverage Initiatives

4. Uninsured New Mexicans • Over 400,000 (21.1%) people in New Mexico do not have health insurance • 41% of NM employers do not provide health insurance • 85,000 (16.3%) children 0-18 are uninsured • 26% of New Mexicans are uninsured 6 months or more (under 65, non-institutionalized) • Most part-year uninsured are children 6-18 and adults under age 30 • Half of New Mexicans who are uninsured 6 months or more during the year are now Medicaid/SCHIP eligible • Churning increases administrative cost and may compromise access and quality

5. Insure New Mexico! Background • 2003 & 2004 – Health Care Coverage and Access Task Force • Identified issues with coverage and access • Recommended legislation • 2005 & 2006 – Insure New Mexico! Council, chaired by Lieutenant Governor, recommended legislation: • To reduce the number of people in NM without health insurance • To increase the number of small employers, including non-profits, offering health insurance to their employees

6. Insure New Mexico! Initiatives • Expanded the State Coverage Insurance (SCI) Program for small employers and self-employed individuals currently without insurance, now serving 8,000 New Mexicans • Lowered the premiums for the Health Insurance Alliance (HIA), now enrolling 6,000 New Mexicans • Created the Small Employer Insurance Program (SEIP), targeted toward non-profits and small employers not currently offering insurance, with 50 groups in enrollment process (in 2007 excluded non-profits from having to be uninsured prior to enrolling)

7. Insure New Mexico! Initiatives (continued) • Expanded health coverage for unmarried dependents by allowing them to stay on parents’ individual & group health plans until 25 years old • Required insurers to offer health insurance plans for part-time employees when employers choose to offer this coverage • Expanded Medicaid eligibility for pregnant women to 185% FPL • Created Premium Assistance for Kids (PAK) and Premium Assistance for Maternity (PAM) programs for uninsured children and pregnant women who are not Medicaid eligible • Funded enhanced Medicaid outreach to children, with a special initiative for Native American and Hispanic children

8. Insure New Mexico! Initiatives (continued) • Provided enhanced Medicaid outreach to the Navajo Nation; now enhancing to urban Indians and Apache tribes • Changed Medicaid recertification and income disregards to encourage easier enrollment into the program for children who can document eligibility • Expanded New MexiKids income disregards for children ages 0 to 19 with family incomes of up to 235% FPL • Expanded Medicaid eligibility to foster children to age 21 • First steps toward expanding Medicaid for adults up to 100% FPL

9. Governor Bill Richardson’s 5-Point Plan to Close New Mexico’s Uninsured Gap

10. Governor Richardson’s 5-Point Plan • Vendors of the State Will Offer Employees Insurance – Phase-in requirement that employers doing business with the state will offer health coverage to their employees • Assure State Employees Are Insured – Identify state employees who decline state health insurance coverage; encourage their coverage through the state, a spouse or elsewhere • Maximize Medicaid for Low-Income Adults – Increase Medicaid coverage for adults up to 100% FPL • Expand the State Coverage Insurance (SCI) Program – Cover more working adults up to 300% FPL with cost-sharing based on income • Analyze Models for Universal Health Coverage for New Mexico – Creation of Health Coverage for New Mexicans Committee (HCNMC) to identify and analyze 3-5 universal health coverage models and recommend next steps

11. Health Coverage for New Mexicans Committee (HCNMC)

12. Health Coverage for New Mexicans Committee COMPOSITION • Appointed in August 2006 jointly by Governor and Legislative Leadership, chaired by Lieutenant Governor • 23 voting members; 4 advisory members • Includes regional and ethnic representation from the NM Senate and House, business, labor, insurance industry, health care providers and advocates

13. Health Coverage for New Mexicans Committee CHARGE • Identify 3-5 models for analysis • Each model to provide health coverage for all New Mexicans • regardless of ability to pay or income level • remove lapses in coverage because of unemployment or changes in health providers • identify ways of keeping prices in check • include coverage for individuals with high health care needs or pre-existing conditions • optimize the use of federal matching funds • Receive and consider public input • Competitively procured an expert to conduct study, Mathematica Policy Research, Inc. • Principles, minutes, presentations, reports at: http://insurenewmexico.state.nm.us/HCNMC

14. Overview of 3 Health Coverage Models Analyzed for HCNMC

15. New Mexico Health Security Plan Single, statewide comprehensive health insurance plan for all residents who enroll • Services mirroring those of NM state employees • Premiums scaled to income • Employers pay a percentage of payroll • Self-insured employers elect to participate • Administered by an appointed commission that would negotiate provider fees and facility budgets • Cost savings through reduction in administration of multiple health insurance companies and through provider rate negotiations & oversight

16. New Mexico Health Choices Plan Market-based universal coverage through government-subsidized vouchers provided to individuals • Single, statewide risk pool replaces individual and group health insurance markets • Range of private and government options to obtain health insurance • New Mexicans not covered by public programs such as Medicaid would be given vouchers to buy insurance through commercial carriers pre-selected by a newly created Alliance • Version 1 coverage on an individual basis and employers contribute via payroll tax • Version 2 employers continue to offer coverage and exempted from pay roll tax for workers enrolled in their health plan • Insurance coverage would be mandatory for all residents

17. New Mexico Health Coverage Plan Combined public and market-based universal coverage plan that preserves roles for both the current public and private health care system • Focuses on coverage for currently uninsured New Mexicans • Includes expansion of Medicaid for low-income families and workers • Financial incentives for employers to provide health insurance for workers (tax credits & fair share contributions) • Requires all people living in NM to buy commercial insurance, enroll in employer-sponsored insurance or enroll in state- or federally-subsidized insurance if eligible • Enhanced funding for primary care clinics and FQHCs • Cost, Access & Quality Council

18. Highlights of Mathematica Cost Study • $6.11 billion will be spent in New Mexico on health care for this population in 2007 (excluding Medicare) • Cost $5.93 billion (HSP), $6.3 billion (HCP) or $6.7 billion (NMHCP) to cover all non-elderly non-institutionalized New Mexicans • Cost of each model might be lowered (or increased) by changing assumptions about rates paid to providers, type and amount of services or benefits offered, wellness and public health initiatives, and actions to reduce non-medical costs • Models have positive impacts on the state’s economy due to increased federal dollars and spending, especially rurally

19. Highlights of Mathematica Cost Study(continued) • Many New Mexicans are currently or will soon be eligible for employer-sponsored or public programs of health coverage, if adequate state general funds are appropriated to draw available federal match and if efforts are made to require those eligible to enroll • ERISA and federal tax laws may impact (but not necessarily impede) implementation of some aspects of each of the models and need to be considered to avoid unintended consequences • Within five years, it will cost more to do nothing and have the number of uninsured New Mexicans grow than to implement some form of coverage for all residents of New Mexico

20. NEW MEXICO’S NEXT STEPS

21. Next Steps • Creation of a Single Statewide Appointed Health Care Authority • Manage products to increase coverage and set minimum benefits • Serve as a connector for coverage products • Set standards for performance by insurance carriers & providers • Identify and implement activities to increase quality and access and control growth in costs • Consolidate state & quasi-state health coverage/policy agencies • Create a “Culture of Coverage” • Require individuals to have coverage by 2010 • Require employers to offer insurance or contribute • Create a package within Medicaid that persons not covered by public programs can buy into based on income under 400% FPL • Allow individuals without employer-sponsored insurance and not eligible for public programs to buy into state employees risk pool

22. Next Steps (continued) • Insurance Reform • Require insurance companies spend 85% of premium on medical services • Require insurance companies to offer coverage to anyone with limits on percent that can be charged above average cost • Phased reduction of rating up based on experience of individuals/groups • Require providers to accept any form of insurance coverage with limits • Common data reporting for all insurance companies products • Require brokers/agents to offer public products • Risk equalization • Health Care Cost, Access & Quality • Require phased-in electronic health transactions • Increase provider recruitment/retention activities • Moratorium on insurance benefit mandates until 2010 http://insurenewmexico.state.nm.us/HCNMC