N.M. Will Set Up Insurance Exchange
ByWinthrop Quigley / Journal Staff Writer on Thu, Nov 15, 2012
New Mexico will move ahead with its own health insurance exchange and will notify federal officials of the decision on Friday, according to a Human Services Department spokesman.
HSD expects up to 250,000 New Mexicans to be eligible to use the exchange between 2014 and 2020 and estimates that 55,000 uninsured will enroll in 2014.
Consumers who receive insurance from their employers, who receive federal or veterans health benefits, members of retirement health plans, and Medicare and Medicaid beneficiaries are not eligible to use the exchange.
The federal Affordable Care Act, also known as Obamacare, requires that all consumers have access to a web-based health insurance marketplace. States have a choice of organizing their own exchange or having the federal government set one up.
Friday is the deadline for states to notify federal officials if they intend to set up their own exchanges.
“We’ve been moving forward on a state-based exchange to keep more flexibility in the hands of the state,” New Mexico HSD communications director Matt Kennicott told the Journal. “We want something more market-driven that will allow us to have the exchange we want, instead of a full Obamacare exchange.”
Kennicott said a federal exchange would let the federal government choose what health insurance is available to New Mexico consumers. “We want to allow the market to be opened up to more plans,” he said.
A health insurance exchange allows small businesses and consumers to shop for insurance policies via the Internet. The policies must meet minimum coverage requirements.
The ACA allows states to organize compacts that would allow consumers in one state to purchase insurance on the exchange that is available in another state. New Mexico has not decided whether to join a compact.
The idea of exchanges is to create competition among plans, give consumers enough information to make intelligent choices and put the plans and consumers “on a level playing field,” said Carolyn Ingram, a former New Mexico Medicaid director who is a senior vice president with the Center for Health Care Strategies.
California, Minnesota, Nevada and Colorado are among the states that will set up exchanges. Alabama, Louisiana, Kansas, Texas and Missouri are among the states that won’t.
Some states, like Iowa, are going with a federal exchange because they don’t think they have enough time to get their own in place by the ACA’s Jan. 1, 2014 deadline.
What it will do
Ingram said that at a minimum, an exchange:
Gives qualified plans an electronic space to offer their products.
Administers government subsidies available to low-income consumers who buy a policy.
Helps consumers compare and understand the products being offered.
Helps insurers and brokers market to consumers.
Determines if shoppers using the exchange are qualified for subsidies or for public programs like Medicaid.
“In this version they have a computer system that allows people to look at products,” Ingram said. “They have an online application you can easily fill out to apply for products.” It’s rather like Orbitz, she said, which is a travel website that connects buyers and sellers.
States can also “do a little bit more,” she said.
If as a matter of policy a state is trying to reduce obesity, for example, it might require plans to offer fitness and dietary programs. A state might require coverage for Oriental medicine or traditional healers. Plans might be required to include Indian health systems in their networks of providers. A state that is trying to improve health care quality might require compensation programs that reward medical providers for meeting quality standards.
The nation’s first insurance exchanges were state-initiated efforts in Massachusetts and Utah. The Utah exchange more closely resembles Orbitz. Massachusetts has a more “activist” exchange, along with Arkansas and Maryland, Ingram said.
The Utah model
Kennicott said the New Mexico exchange will be closer to the Utah approach. Indeed, former Utah Gov. Mike Leavitt’s consulting company is helping HSD build its exchange. However, Kennicott said, Utah so far only offers products for small businesses. New Mexico will begin with small business offerings but will expand to allow individuals to buy their own insurance.
“Massachusetts has created a gigantic, new umbrella agency,” Kennicott said. “It’s a huge new program. Utah is fairly slim on the administration. We want to run efficiently like Utah’s but (New Mexico) will offer more products.”
New Mexico’s exchange will be a function of the existing Health Insurance Alliance, which was created by the Legislature to offer insurance to individuals and small businesses that can’t find insurance on the open market. The alliance is funded by the insurance industry and its board includes representatives of insurance companies.
That structure bothers Health Action New Mexico, a policy advocacy organization.
Its executive director, Barbara K. Webber, said the alliance-based exchange “is in conflict with the way exchanges are supposed to be set up. It comes from an agency that issues insurance. It’s a membership organization of every insurance agency in the state. We’re not talking about a consumer-oriented exchange with a fire wall from insurance companies that was anticipated by the ACA, with a lot of consumer input.”
Alliance worries
Webber doubts the alliance’s role, which is defined in statute, can be changed without legislative action. She said the structure could be challenged in court, “and that’s going to delay health reform in New Mexico.”
She also worried that absent expansion of Medicaid coverage to low-income adults, which ACA allows and the federal government will largely fund, many consumers won’t get any benefit from the exchange.
“If we don’t do a full Medicaid expansion we’ve impaired our ability to really implement health care reform as it was intended in the exchanges,” she said.
Gov. Susana Martinez has yet to decide if New Mexico will expand Medicaid, Kennicott said.
By far the biggest challenge facing the states is building the information technology that runs the exchanges, Ingram said.
New Mexico is shopping for an IT vendor this month. Its description of what the technology must be able to do runs 74 pages.
“It has to be consumer friendly and easy to use,” Ingram said. “You want to have something that is not complicated (for consumers). They’ll be turned off it is too complicated.”
Simple and complicated
At the same time, and with the utmost security, the system has to collect and verify personal income information to see if the consumer is eligible for a subsidy or Medicaid.
Ingram said many people bounce back and forth between Medicaid and commercial insurance, depending on employment status. Those changes in coverage have to be handled without error or hassle.
Consumers have to have enough information to make a good choice, and their choice has to be conveyed quickly and without error to the right company.
Kennicott said the state is hoping to buy a turnkey system that will allow it to begin enrolling people next October.
— This article appeared on page A1 of the Albuquerque Journal
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