Health Security FAQs
+ Why do we need the NM Health Security Act?
While hundreds of thousands of New Mexicans currently have health coverage because of the Affordable Care Act (aka Obamacare), there are still problems to address: increases in premiums, deductibles, and copays; rising costs for prescription drugs; and smaller networks that limit patients’ choice of health care provider are just a few of them.
These problems are due to our complex private insurance system, which the Affordable Care Act relies on and which any “replacement” would maintain. Although “repeal and replace” legislation failed to pass Congress, the Affordable Care Act's patient protections continue to be attacked, and the future of the Affordable Care Act as a whole is once again in the courts.
But our state has a clear path forward--setting up its own health plan that would include most New Mexicans, regardless of age, health, and employment status. The Health Security Plan is based on the old-fashioned concept of insurance, where the young, the old, the healthy, and the not-so-healthy are all in one large insurance pool. The risk is shared, while administrative costs are reduced. Our current segmented system of hundreds of insurance plans is complex and costly for all of us. Doesn’t it make sense for a state with a small population to set up its own plan?
The Health Security Plan would offer comprehensive benefits and freedom of choice of health care provider and facility, even across state lines. It would be our plan, run like a coop and overseen by a independent citizens’ commission.
+ Who will be covered by the Health Security Plan?
Almost all New Mexicans will be covered, regardless of age, health status, and employment status. Federal retirees, active-duty and retired military, and TRICARE recipients will continue with their current coverage, and tribes (as dependent sovereign nations) can opt into the plan. Health plans that are covered under a federal law called ERISA can voluntarily join the plan.
No more shopping around for plans. Most New Mexicans will be automatically covered!
+ What services will be covered by the Health Security Plan?
Covered services will be at least as comprehensive as those offered to state employees, including extensive preventive care, medical and hospital care, mental and behavior health care services, acupuncture, and chiropractic treatments.
Dental coverage could be purchased as a supplemental policy, as is the case with state employees. It is expected that dental coverage will be phased in. (Anyone with Medicaid coverage that includes dental care will continue to have dental services covered.)
+ Will I be able to stay with my doctor?
No more networks! New Mexicans covered by the Health Security Plan will have complete freedom to choose any in-state, licensed health care provider, hospital, pharmacist, or clinic. The Health Security Plan is also authorized to contract with providers and health facilities across state lines.
+ How much will my Health Security Plan coverage cost?
How much you will pay will depend on the fiscal analysis that is required prior to setting up the plan.
Only Health Security Plan members will pay. Premiums, with caps, will be determined by income, not by age, gender, region, or health or employment status. Premiums may be increased only with the approval of the superintendent of insurance (a public process). Employers may cover all or part of an employee’s premium. Employers (except those under ERISA) are also required to contribute to the cost of the Health Security Plan.
If federal subsidies and tax credits are still available, they will help reduce members’ premiums and employer contributions.
+ Will there be deductibles and copayments?
There will be no deductibles. There will be no copayments for preventive care. The Health Security commission, after public hearings, will determine under what conditions, if any, copays would be required, and how much those copays would be.
+ How will the Health Security Plan keep down medical costs?
Costs will be controlled primarily through budgetary planning that takes into account technology, an aging population, and other factors. A Quality Improvement Program must be established, with provider input, to ensure best medical practices and patient safety.
Hospitals, clinics, private-practice physicians, pharmacists, and other providers will negotiate budgets and fees with the Health Security commission. The NM Health Security Plan will pay the bills. It may contract with a private company to process claims, but only if the claims are processed in New Mexico.
The Health Security Plan will buy pharmaceutical drugs and medical equipment in bulk to reduce costs.
Administration will be streamlined because almost everyone will be covered by the same health care plan, with one claims form. Savings will result from the elimination of duplicative administrative costs built into the present system of multiple insurance plans. Money that was formerly used for insurance company marketing, commissions, out-of-state investments, and profits will be made available for health care services. In the sixth year of operation, the administrative costs for the Health Security Plan will be limited to 5% of its annual budget.
+ What about surprise out-of-pocket costs?
No more surprise billings! The Health Security Act specifically prohibits any health provider or health facility that has an agreement with the plan from charging patients more than the covered rates. (And remember, this includes out-of-state providers and facilities that the Health Security Plan--like any insurance plan--will have negotiated fees with.)
+ I understand that automobile insurance and workers compensation premiums will be reduced under the Health Security Plan. Why?
If you are in a car accident and break your leg and your plan covers the care you need for the broken leg (which the Health Security Plan would do), you would not have to file a health claim with your auto insurance company. There is no need to pay for duplicate health coverage, so the health portion of your auto insurance premium can be reduced.
For employers participating in the Health Security Plan, commercial auto insurance and workers compensation premiums will be reduced, since the plan will be paying the health portion of these bills.
+ What will happen to medical records?
Federal and state medical privacy laws will apply. However, because almost all New Mexicans will be in one confidential medical database, providers (including emergency room staff) will know what tests you have taken, what meds you are on, and other critical medical information. This should lead to better and more coordinated care for patients and should also save the Health Security Plan money, as there should be no duplication of services. The centralized, confidential database will also be useful to pharmacists, who will immediately have your prescription record.
+ Who will run the Health Security Plan?
An independent citizens' commission will be responsible for the operation of the Health Security Plan. Its meetings will be open to the public, its budget will be public, and it won’t be able to make changes or additions to the plan without public input. Think of it as a coop. (See the next FAQ for more information on the Health Security commission.)
+ How is the Health Security Commission formed?
First, a geographically representative nominating committee will be chosen by majority and minority legislative leaders of both houses. No one with insurance interests can sit on the nominating committee or on the Health Security commission. The nominating committee will select candidates for the commission. Ten of the 15 commissioners must reflect consumer and business interests (with at least six of the ten reflecting consumer interests); the other five commissioners will represent provider and health facility interests. The commissioners will be selected from public education districts across the state in order to make sure that the commission is geographically representative. Most importantly, all members of the nominating committee and the commission must be eligible for or enrolled in the Health Security Plan.
+ What will happen first after the Health Security Act is passed?
A fiscal analysis must be done to determine whether the Health Security Plan will be affordable for the state. If it is not found to be affordable, the plan will not be implemented. There have been two studies conducted in New Mexico, in 1994 and 2007. Both were done prior to the Affordable Care Act with all its extra federal dollars. Both demonstrate that a poor state like ours could save hundreds of millions of dollars within five years if a plan like Health Security were put in place.
+ How can I sign up for the Health Security Plan?
The Health Security Plan is not yet active. Legislation must be passed by the legislature and signed by the governor for this plan to go into effect. The 74-page Health Security Act is a fully formed piece of legislation that has been introduced in the legislature several times.
+ How can I help pass the Health Security Act?
- Be as informed as you can. Sign up for our email list. Then sign up for a workshop on Health Security!
- Talk to everyone you know about Health Security. Tell them why you think it will work for all of us in the state. The biggest challenge to passing the Health Security Act is a lack of awareness about this important New Mexico alternative.
- Let your legislators and the governor (including gubernatorial candidates) know of your support for the Health Security Act, and ask them to support it too.
+ Given all that is going on at the national level, is it even possible for New Mexico to create its own plan?
There is a Waiver for State Innovation provision in the Affordable Care Act that allows a state like ours to develop a plan like Health Security and still receive federal dollars.
While the Republicans in Congress seem to want states to take over health care coverage, we don’t know whether the Affordable Care Act’s federal funding will continue. (Many Republican governors who agreed to the Medicaid expansion are very concerned about shifting the cost burden onto the states.)
There are a lot of “what if’s,” so it is important for the required fiscal analysis to occur first to make sure that the plan is still financially feasible (as two studies indicated) without those added federal dollars.
The fiscal analysis, which under the Health Security Act must be completed before the Health Security Plan is set up, will calculate the cost of the plan and how it will be paid for. The analysis will enable all of us to see if adjustments need to be made to the Health Security Act to make it more workable in this environment.
+ What about Medicaid Buy-In?
The Medicaid buy-in proposal would allow New Mexicans who are not currently eligible for Medicaid to buy into this public insurance program.
After passage of the Health Security Act, it will take approximately three years for the Health Security Plan to be up and running. (The first step is to complete a full fiscal analysis of the Health Security Plan. Then, analysis in hand, the 2021 legislature will need to decide whether to move forward with setting up the Health Security Plan.) In the meantime, it's important for as many New Mexicans as possible to have health coverage. That's where Medicaid buy-in could help.
For more information, see our fall 2018 Medicaid buy-in post.