Our Take on the Preliminary Fiscal Analysis of the Health Security Plan
In late May, we noted that a preliminary report on the Health Security Plan fiscal analysis had been completed by KNG Health Consulting and that we were working hard on requested feedback.
Our comments have now been submitted to the NM Legislative Finance Committee, which is overseeing the fiscal analysis. A press release was also issued this morning.
What did we find?
Basically, KNG concludes that although the Health Security Plan would cost less than the current system—and would result in fewer than 1% of NM residents remaining uninsured—there would not be enough money to pay for it. In fact, they project a $7 billion “funding shortfall” under Health Security.
OK — Have a cup of coffee, and keep reading . . .
However, by KNG’s own projections, over the first 5 years, the Health Security Plan saves over $16 billion compared to the current system .
As Campaign chair Max Bartlett puts it: “How is it possible that the Health Security Plan costs less but is not affordable? This calls into questions KNG’s assumptions, methodology, and conclusions.’’
First: To begin with, there is a $3 billion unexplained discrepancy in the report regarding health care spending under the Health Security Plan. One table shows the cost of the Health Security Plan in 2024 (the first year of implementation) at $9.259 billion , while the other puts it at $12.317 billion, a discrepancy that amounts to up to one third of the projected cost of the program. The underlying data behind these numbers is not clear, and there are all too many other inconsistencies in the figures KNG provides.
The conclusions presented in the report’s Executive Summary rely exclusively on the lower $9.259 billion number, which is quite a difference from the $12.113 billion that KNG projects we will spend in New Mexico on health care in 2024 if we do not implement the Health Security Plan .
Chart created by the Health Security for New Mexicans Campaign, based on KNG data.
Let's keep in mind that two previous studies, Lewin (1994) and Mathematica (2007), also found that Health Security would cost less than the current system. And not only did they determine that it would be less expensive, they found it would be affordable.
Second: Determining affordability depends on more than just the cost of the Health Security Plan. Revenue is the other half of the equation. Here, we found revenue projections that lack data as well as explanations—along with an overall lack of transparency regarding how the projections were calculated.
Tyler Taylor, MD, who sits on our board, spent considerable time reviewing the federal funding that is available to help pay for the Health Security Plan. Based on public information, he identified federal revenues that total $6.8 billion more than what is reflected in KNG’s report.
We all want a final report that is accurate, unbiased, and high-quality. KNG has our feedback, and we hope that they will be able to make some major corrections, provide us with clear justifications for their assumptions, and produce substantiated conclusions.