Insurance handout is coming, say backers of health fund bill that stalled

New Mexico legislators are giving a handout to insurance companies, say backers of a bill designed to create a fund for the uninsured.  The bill passed the House floor 41 to 25 earlier this week but failed to make it to the Senate Finance Committee agenda by Wednesday evening. It has to go through that […]

Insurance handout is coming, say backers of health fund bill that stalled

New Mexico legislators are giving a handout to insurance companies, say backers of a bill designed to create a fund for the uninsured. 

The bill passed the House floor 41 to 25 earlier this week but failed to make it to the Senate Finance Committee agenda by Wednesday evening. It has to go through that committee before reaching the Senate floor. The legislative session ends at noon on Thursday.

Adriann Barboa, spokesperson for a coalition of nonprofits serving the vulnerable called New Mexico Together for Health Care, called  HB 278 a “one-time opportunity” for New Mexicans to get nearly everyone in the state insured.

The federal government made a change to give a tax rebate to insurance companies this year. HB 278 would replace that 3 percent federal tax with a 2.25 percent state tax on insurance companies.

The result, say the bill’s backers, would mean $125 million in new money to go to the state. Of that, $99.1 million would be used for a state health fund to enable those who suffer the “cliff effect” – those who are just above the income cutoff for Medicaid but are unable to afford private insurance. There are about 190,000 people in New Mexico who are not insured, say bill backers. Of that, about 140,000 are not eligible for Medicaid and could use such a safety net.

Colin Baillio, director of policy and communications for a nonprofit called Health Action NM, said the fund would also be used for the underinsured, like Len Sena. Sena testified in committee last week that her grandfather died because he could not afford cancer treatment.

“He said just let him die, he did not go through chemotherapy,” Sena told NM Political Report.

Sena, who is 30 and has stage four Hodgkin’s Lymphoma, has private insurance but had to forgo a clinical trial that could have saved her life a few years ago. 

Her insurance would have had to pay between $600,000 to $1 million for the trial. The company denied her coverage.

She said because she could not get coverage for the trial, her cancer spread. She is currently in remission because of regular chemotherapy treatments.

But, she will have to continue monthly chemotherapy for life. She said more than 80 percent of people who face similar lifetime cancer treatments will relapse.

“My biggest chance for cure was denied,” Sena said.

Baillio said the health insurance fund could help people in New Mexico like Sena by covering things like copays and high deductibles. It would enable the underinsured get better coverage and that, supporters say, leads to better care.

House Republicans argued during debate on the floor earlier this week that insurance companies should get the federal rebate. While conceding that the private insurance companies might not pass the savings on to ratepayers in the form of lower premiums, some House Republicans argued the state should give insurance companies a chance to do so.

But Humana Chief Executive Officer Bruce Broussard told a Goldman Sachs conference last month that the federal tax rebate to insurance companies would be a “substantial benefit” to the company’s stakeholders, according to Axios, an online news site.

During the House Taxation and Revenue Committee hearing earlier this month the Republicans on the committee left the room in an attempt to prevent a quorum.

Barboa said if New Mexico created the fund, it would help doctors and hospitals because if nearly everyone is insured, medical professionals and institutions would be less likely to have patients who cannot pay for care.

With the Senate Finance Committee not hearing the bill Wednesday, the opportunity has essentially closed. Barboa said it would be even harder to add a tax on insurance companies once they have fully received the federal rebate. 

A call to Senator John Arthur Smith, D-Deming, who is Senate Finance Committee chair, was not returned.

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