A bill designed to lower insurance premiums for state residents on the New Mexico health care exchange is expected to be filed for the 2021 Legislature.
The bill is a priority for Gov. Michelle Lujan Grisham and is still being drafted, so not all the details have been worked out. But Nicolas Cordova, an attorney with the New Mexico Center on Law and Poverty, said one of the benefits of the Health Care Affordability Fund is that it would encourage more individuals to enroll and that, in turn, could lead to insurance premiums dropping for residents who are on the exchange.
The bill, if it becomes law, would apply a surtax on insurance companies of 2.75 percent. That would generate $110 million in net revenue for the state, Cordova said.
Colorado, Maryland, New Jersey and Delaware have already passed a similar surtax on insurance companies.
If it passes in New Mexico, the surtax would go into effect on January 1, 2022. From that date until the end of the fiscal year on June 30, 2022, the revenue would go into the state’s general fund. Cordova said that would put $78 million into the state’s general fund, which would help with the current budget crisis.
After June 30, 2022, the revenue would then go into a health care fund for state residents.
As of September 2020, there were 214,000 residents who lacked health insurance, Cordova said. Of those, there are 56,000 individuals in the state who are eligible for federal premium assistance but remain uninsured because they cannot afford it, he said.
Nora Meyers Sackett, press secretary for the Governor’s office, said the fund would expand coverage for up to 23,000 uninsured state residents.
A similar bill, HB 278, passed in the House with a 41 to 25 vote during the 2020 Legislature but failed to pass the Senate. HB 278, had it become law, would have taxed insurance companies 2.25 percent.
The federal government taxed the insurance companies at a similar rate prior to 2021, but the U.S. Congress voted to sunset that tax by December 31, 2020. Adriann Barboa, field director for the nonprofit Strong Families New Mexico and a Bernalillo County Commissioner, stressed that the state’s surtax would only be placed on insurance companies, not on residents.
The bill’s sponsor, New Mexico Rep. Deborah Armstrong, D-Albuquerque, told NM Political Report that the first step is to make health insurance more affordable in the state’s health insurance exchange so more people will get health insurance through that program.
The second step, she said, will be to look at “who else is uninsured and how to meet those needs.”
The New Mexico Center on Law and Poverty and Strong Families New Mexico are pushing for the fund to be used, in part, to help those who cannot access health care coverage, even if they qualify for federal assistance, because of their immigration status.
Cordova said that migrants who have a visa are locked out of Medicaid for five years, even if they live below the federal poverty level threshold. In addition, Deferred Action for Childhood Arrivals, known broadly as DACA recipients, cannot access private plans on the state health insurance exchange with their own incomes because of U.S. laws.
The Health Care Affordability Fund could help migrants who the federal government has left out of insurance coverage, Barboa said. Cordova said including migrants so they can access health care is a Black Lives Matter issue.
“We see members of the immigrant community deemed essential workers but we haven’t given them the essentials to survive this pandemic. They are the people who feed us, house us, they are our teachers and health care workers. They are absolutely essential for our survival for this pandemic but we’re not making sure they can live,” Cordova said.
There are 43,000 individuals who are left out of health care coverage because of their immigration status, Cordova said.
“We’re interested in (the fund) being equitably distributed to people who have been locked out of care; immigrants of various citizenship status are not able to get access to care,” Barboa said. “When a whole population cannot access health care, it’s a health threat.”
The bill would also help hospitals, Barboa said, especially rural hospitals because the more people insured, the easier it is for hospitals and providers to receive payment for the care they provide.
Another group the fund could aid would be people affected by what’s called “the family glitch,” Cordova said.
He said the ACA requires employee-based plans to be affordable. The affordability metric caps how much an employee can pay toward an insurance plan.
“But that only applies to an employee plan but not to an employee family plan,” Cordova said.
An employee family plan could consume 30 percent of the employee’s income. But if the plan is deemed affordable, the employee cannot access federal assistance, Cordova said.
There are 21,000 individuals in the state who cannot afford health care because of the family glitch, Cordova said.
Armstrong said the current crisis the country is in makes evident the need for this bill.
“During this pandemic, the need is all the more obvious for affordable coverage,” Armstrong said.