New stab at statewide public health insurance could be do-able, consultant says
By Sherry Robinson
Writing about healthcare coverage is always a dizzying experience, I find, but lately there’s some encouraging news. Recently a legislative committee heard an update on the proposed Health Security Act. Proponents say it would save billions and control rising costs while providing access and almost universal coverage.
Introduced in the 2019 legislative session, the Health Security Act offered a detailed, public healthcare plan, run by cooperatives, that would cover all New Mexicans. Plan members could choose their providers, even across state lines. Private, for-profit insurance would take a supplementary role. The ambitious bill, introduced by some Dem heavy hitters, called for fiscal analysis to determine potential costs, savings and coverage. If lawmakers and the administration found it feasible, it would be implemented.
The bills ran into resistance. Although it was presented as a study, it would “lay the ground work for a government-run healthcare system that would lead to the collapse of the private insurance market in New Mexico,” wrote the Association of Commerce and Industry. The group’s concern was that the bill wouldn’t receive enough study, “leaving New Mexico taxpayers with the surprise costs of covering government-run healthcare.”
Lawmakers passed House Memorial 92, which called for a fiscal analysis. KNG Health Consulting, of Maryland, assessed the five-year cost of the proposed plan and looked at whether the state’s revenue and potential savings would cover the cost.
KNG reported Sept. 4 to the interim Health and Human Services Committee. Costs are hard to pin down because of variables, like how generous the plan would be and in what circumstances, along with a host of unknowns, so the consultant used four scenarios. (This came after the consultant scared everyone with a $7 billion cost estimate.)
KNG concluded that the plan, to begin in 2024, would provide universal coverage and reduce the percentage of uninsured people to almost zero. Without reform, New Mexico healthcare costs are expected to rise by $2.1 billion between 2024 and 2028, but over five years, the plan could reduce state spending between $1.6 billion and $2.7 billion, depending on the scenario. It would reduce healthcare costs substantially under all scenarios. Existing revenue could fund the plan under some scenarios; in others, there could be a funding shortfall, although the shortfalls decrease each year. One scenario predicts a funding surplus.
How does it reduce costs? The plan would reduce administrative costs by merging Medicaid, state employees, and health insurance exchange programs. It would buy medicines in bulk. It would simplify billings and stabilize revenues for hospitals. The consultant also predicted the plan would reduce workers’ compensation and car insurance premiums. A focus on prevention would result in a healthier population.
During the committee hearing, legislators asked about the impact on private insurers and on small business.
Mary Feldblum, executive director of the Health Security for New Mexicans campaign, said that private insurers opposed Medicare in 1965 because they feared it would put them out of business but then found new roles in offering supplementary insurance.
She said that employers who currently don’t provide coverage would have an increased expense for paying into the plan, but employers who do already provide coverage would see a reduced cost for coverage.
Rep. Rebecca Dow, R-Truth or Consequences, called the plan a good start while noting the many unknowns and the sheer scale of the plan. If the assumptions are incorrect, she said, the result could be catastrophic.
But Feldblum sees the current path as fraught with hazards -- rising out-of-pocket costs, escalating drug prices, beleaguered hospitals, frustrated providers who spend more time on a computer than with patients, and employers who can’t afford to protect employees. Add to that around 200,000 New Mexicans who still lack coverage.
Maybe the Health Security Act doesn’t have all the answers just yet, but we’ve got to start somewhere.
Reproduced with permission from the author.
