February 8, 2018

Legislature to study Medicaid Buy-In as way to help NM insurance

The New Mexico State Capitol, or Roundhouse Wikicommons.

Supporters of a new health care proposal say it could help reduce the state’s uninsured rate by making health insurance more affordable.

It’s called Medicaid buy-in and the New Mexico House of Representatives and Senate each recently passed memorials calling on the interim Legislative Health and Human Services Committee to look into its implementation. Medicaid buy-ins are essentially programs that allow those who make too much to qualify for Medicaid to pay premiums for a Medicaid-like program.

What a New Mexico version of the program would look like isn’t yet known. That’s the point of the study, Rep. Deborah Armstrong, D-Albuquerque, told NM Political Report. She, along with Rep. Nathan Small, D-Las Cruces, sponsored the House Memorial.

“I’m interested in looking at our health care system systematically and how we can maximize our abilities to get as many people insured as affordably as possible,” Armstrong said.

While the uninsured rate has dropped in New Mexico since the passage of the Affordable Care Act, the proposal aims to drop it even lower.

“I think the proposal is to create a product for folks who maybe traditionally wouldn’t qualify for Medicaid, i.e., their income level is a little higher than you normally see from Medicaid recipients,” explained Rodney McNease, the executive director of Behavioral Health Finance at the University of New Mexico Health Sciences Center.

The memorial mentions the lack of health care options for those who make up to 200 percent of the federal poverty level, or just over $50,000 per year for a family of four, to buy into Medicaid. Or something similar to Medicaid, Armstrong explained.

“We would establish what the premiums would be,” she said. “We would have to look at the benefits and it probably wouldn’t be the full Medicaid benefit package, but something less than that.”

What states would benefit?

New Mexico isn’t the only state to explore the idea, and other states may get more out of it.

Medicaid buy-in is more likely to help states with different health care profiles than New Mexico. John Holahan, a fellow with the Urban Institute, a Washington, D.C.-based think tank, said states with fewer options could benefit the most. Whereas New Mexico has four providers on the exchange in each county, states like Arizona only have one insurer on the exchange in each county.

“If Arizona could get managed care plans to come in to their program, it would probably help them enormously,” Holahan said. “But they’re different.”

Armstrong said she’s looking beyond the idea of helping areas with few options and towards a broader change for the state.

“I think that we are ideal because our Medicaid managed care system is really well-established and I think that that provides us an opportunity to have a system that’s established and less costly, that people can buy into.”

New Mexico could see a decrease in people with insurance because of recent federal actions like the elimination of the individual mandate as part of the Republican tax bill.

“It’s hard to predict exactly how the marketplace will evolve going forward,” McNease said. “I know with the removal of the individual mandate, that is likely, I think, to create even more challenges for the New Mexico Health Exchange and with similar kinds of marketplaces.”

That’s where supporters say Medicaid buy-in would help fill the gap.

Armstrong acknowledged the federal changes were part of—but not the sole reason—why she introduced the memorial. She said it’s also an eye toward future health care changes.

“I had been talking in the last session when we were looking at health care systems,” she said. “And it’s really in anticipation if the federal government were to block grant Medicaid or cut back on Medicaid or Medicare, I think that we need to as a state look at how they can design their own system that is accessible and affordable and maximizes our public dollars.”

Sen. Brian Schatz, D-Hawaii, and Rep. Ben Ray Lujan introduced legislation to allow states to opt-in to allowing Medicaid buy-in programs. The Democrats in New Mexico’s congressional delegation support the proposal.

Speaker of the House Paul Ryan, R-Wisconsin, in particular has proposed block grants for Medicaid, which is currently funded by the federal government on an as-needed basis. Block grants limit  how much each state would receive, which critics say would result in fewer people covered with worse health care.

Further changes, beyond the potential restructuring of Medicaid, continue for health care.

“It’s not just the individual mandate, but it’s also premiums have gone up for some of those plans and just because of the required copays, deductibles, depending on the plans you get, you can end up with really high out of pocket costs,” Mcnease said.

On Wednesday, Senate leaders in Washington, D.C. announced a budget deal that would, among other things, eliminate the Independent Payment Advisory Board. This board is tasked with containing Medicaid costs without affecting services and has been opposed by Republicans over the years.

An idea in many states

At a House Health and Human Services Committee hearing, Sireesha Manne of the New Mexico Center on Law and Poverty supported Armstrong’s proposal.

“This idea of the Medicaid buy-in plan has been really circulating and gaining a lot of momentum in other states as a possible solution for health care access issues,” she said.

In Nevada, Republican Governor Brian Sandoval vetoed a Medicaid buy-in bill. Massachusetts and Minnesota are other states that looked into the possibility.

But the federal government must act before any states can go forward. The federal legislation would allow states to choose whether or not to put together a Medicaid buy-in program—and allow those who qualify for federal subsidies under the Affordable Care Act to use those towards buying into Medicaid.

States would need waivers to implement the buy-in, which could happen without the legislation, though that would ease the process.

The price points would be where the risk comes for the state, according to Holahan.

“If they didn’t set the premium right, then the state is on the hook for higher costs,” he said.

The Office of the Superintendent of Insurance told NM Political Report it would utilize their health policy team to contribute to the study. OSI would look into options explored by other states as possibilities for New Mexico.

The state Human Services Department did not respond to requests for comment.

Correction: This piece said that the proposal would offer a health care buy-in opportunity for those making up to 200 percent of the federal poverty level. The memorial mentions the lack of health care for those at that level but does not have any mention of cap on the the proposal.

The story did not initially mention the U.S. House legislation sponsored by Rep. Ben Ray Lujan or that the state could receive waivers absent the legislation.

This story also misspelled Siressha Manne’s name.